A comprehensive projection of all injury-related future medical and non-medical needs and their cost across the expected lifespan, prepared for litigation, mediation, or settlement (Reavis, 2002).
An estimate of the portion of a settlement to reserve for future injury-related care that Medicare would otherwise pay, prepared under Medicare's review guidance (Centers for Medicare & Medicaid Services, 2026).
| Dimension | Life Care Plan | Medicare Set-Aside (MSA) Allocation |
|---|---|---|
| Purpose | Quantify the full cost of future care as damages | Protect Medicare's interest when a settlement closes future medical |
| Audience | Trier of fact, mediator, adjuster | Settling parties, CMS reviewer, professional administrator |
| Scope | All injury-related needs, medical and non-medical | Medicare-covered, injury-related items only |
| Pricing basis | Cost of care in the evaluee's market, documented per item | Fee schedule or usual-and-customary per Medicare guidance |
| Horizon | Population life expectancy unless a physician adjusts it | Life expectancy or an underwriter's rated age |
| Typical size | Larger | Smaller; a subset of the plan |
Prepare a life care plan whenever future care is a significant component of damages in a personal injury, malpractice, or catastrophic injury matter, whether the case is headed to trial or settlement.
Prepare an MSA allocation when a workers' compensation or liability settlement involves a Medicare beneficiary or someone with a reasonable expectation of enrollment and the settlement releases future medical care.
Both start from the same medical record and the same treating-team recommendations, and the same planner can prepare both. The allocation is best understood as a carve-out from the plan: the subset of items Medicare would cover, priced the way Medicare's guidance expects. Many catastrophic workers' compensation cases need both, and preparing them from a single record review keeps the two documents consistent.
No. The plan includes care Medicare does not cover and prices items at market cost rather than fee schedule. Using the plan total as the set-aside overstates the reserve and does not follow Medicare's guidance.
Medicare's interests must be considered whenever future medical care is released. Whether a formal allocation is prepared, and whether it is submitted for review, depends on the settlement amount, the beneficiary's status, and counsel's judgment.
Usually the life care plan, because it establishes the complete inventory of future needs. The allocation is then derived from that inventory by removing non-covered and unrelated items and re-pricing what remains.