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I think the very best thing about settlements that include an MSA (i.e Medicare Set Aside) versus a settlement that does not include an MSA, is the perspective used by the parties to arrive at an ultimate settlement.

The majority on non-MSA settlements are what I call “Supply & Demand” settlements. Many, if not most, of the injured worker’s caught up in the system are living day-to-day.  They live daily with uncertainty – Uncertain is their injuries will get better or worse, uncertain with whether they will have a job to return to, uncertain when they will be able to RTW (assuming they can), uncertain what is going to happen to their life if they don’t get better and if they don’t return to work.

Often times they are behind in their bills, are using up their savings, their bank account is depleted, they are facing repossession or worse.  As a result, they often accept settlements at much less than their full value because they are in dept, owe their friends or family members and are under great financial pressure on a day-to-day basis.  Insurance companies and self-insured often pay on this desperation because they are able, in many instances, to settle a case at 20-30% of it’s value.

The nice thing with an MSA is that suddenly and, for the first time in the litigation, the parties are forced to look at a person’s life expectancy and the cost of future medical care given that life expectancy.  As a result, the injured worker is, upon settlement, given a sum which factored in their expectancy which is often several years in duration.  This, by it’s very nature, results is a much higher settlement value as settlement is no longer based on desperation, but is based upon reality.

The example I promised will appear in Part 3 of this BLOG.

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