From Independent Life’s perspective as a sponsor and exhibitor, the 2019 National Alliance of Medicare Set-Aside Professionals Annual Conference hosted September 18-20 in Baltimore surpassed its goals, objectives and expectations:
- As the primary annual meeting of Medicare Set-Aside (MSA) and Medicare Secondary Payer (MSP) knowledge resources, NAMSAP’s conference represents an extensive, valuable market for information sharing and learning.
- 230 attendees set an association record and the new conference venue (Live! Casino Hotel) served as an excellent site.
- The educational program highlighted NAMSAP’s increasingly important engagement with Centers for Medicare and Medicaid Services (CMS) and its primary MSP contractors.
- Though it did not provide new information or announcements about CMS liability MSA rules or federal legislation impacting WCMSAs, the program offered comprehensive sessions addressing both.
- Other sessions provided MSA updates and best practices and highlighted the expanding scope of NAMSAP’s focus which increasingly covers all aspects of MSP practice.
The following are conference highlights for structured settlement and settlement planning professionals:
- Tom Stanley, currently a member of the NAMSAP Board of Directors and co-Chair of NAMSAP’s Liability MSA committee, continues to fill the role of National Structured Settlement Trade Association (NSSTA) member involvement among NAMSAP’s Leadership.
- Society of Settlement Planner (SSP) members Josh Pettingill and Jack Meligan were featured panelists. Josh spoke about “Liability MSAs.” Jack spoke about “Leveraging Settlement with MSAs in Mediation”.
- Four of the 14 NAMSAP conference exhibitors, including Independent Life, were NSSTA members.
- Amy Bilton, NAMSAP’s President, will be a featured speaker at the NSSTA Fall Conference October 16, 2019 in Chicago.
- S 3079 (introduced by Senator Portman), which includes a “direct funding” WCMSA option for defendants, was featured during a presentation about “federal legislation” which also addressed S 1129 (introduced by Senator Sanders) aka “Medicare for All.”
- No one Independent Life spoke with could predict the impact of “Medicare for All” on MSAs or structured settlements – in part because of S 1129’s uncertain future.
- Assuming “direct pay” becomes available, one representative of a major liability insurer assured Independent Life his company would continue to fund WCMSAs with structured settlement annuities because of the cost savings and benefits to plaintiffs.
- Alternatively, a self-insured representative said his company’s decision would be case specific and depend upon both the facts and case law.
Why do MSAs represent a current strategic structured settlement priority?
- Structured settlement MSA industry experts estimate that:
- As many as 20-25% of current structured settlement cases result from MSAs.
- Perhaps 95% of these MSA cases are WCMSA cases as opposed to liability MSA cases.
- Compared with lump sums, MSAs funded with structured settlement annuities save defendants 33% on average.
- The “success ratio” for structured settlement brokers working on MSA cases is typically 80% - compared to 25% for non-MSA cases.
- The structured settlement WCMSA cost advantage results from the methodology by which CMS requires WCMSA stakeholders to calculate present value which is incorporated into the CMS WCMSA Reference Guide.
- Arguably, without that cost advantage, there would be no WCMSA market for structured settlements.
- “Liability MSAs” represent the #1 priority of NSSTA’s Innovation Committee – formerly NSSTA’s Growth Committee.
- NSSTA’s expectations/objectives being:
- CMS will eventually issue formal liability MSA guidance;
- that formal guidance will continue the structured settlement cost advantage;
- liability MSAs will substantially grow the structured settlement market – current estimates by knowledgeable sources = $500 million per year of additional premium.
- Although CMS has suggested it will issue, it has not yet issued, formal liability MSA guidance – and there is no certainty any such guidance will include a cost advantage for structured settlements.
The Independent Life structured settlement message
Independent Life was the only structured settlement annuity provider to sponsor and/or exhibit at the NAMSAP conference. Of course, we did so to promote the unique features of our own company. But we also did so because we recognize the strategic importance of MSAs and we saw it as an opportunity to promote the benefits of structured settlements to an audience that could see potentially significant growth in the coming year.
What is our MSA structured settlement message?
Structured settlement annuities play a critical role in WCMSAs and the work product of almost every professional WCMSA stakeholder and NAMSAP member. Multiple sections of every version of the CMS WCMSA Reference Guide have addressed “structured settlements” and CMS has provided a significant cost advantage to WCMSAs funded with structured settlement annuities compared with lump sums.
This cost advantage has worked to the benefit of all parties.
- It has saved defendants money and encouraged them to settle cases thereby helping to make the MSA process work more effectively.
- Likewise, structured settlement recipients are less likely to exhaust their MSAs early, thereby saving Medicare money.
In sum: the public policy cost advantage provided to structured settlement annuities (intentionally or unintentionally) for WCMSAs has achieved its objectives and should be continued for liability MSAs. To encourage settlement negotiation involving liability MSAs, we also expect defendants and plaintiffs will increasingly learn to leverage structured settlement cost savings for mutual benefit.
Independent Life hopes to return to the NAMSAP Annual Conference to expand our MSA learning and education – and we plan to propose an educational session based on structured settlement public policy justification and/or how to leverage structured settlement savings to achieve superior liability settlements with input from leading professionals.