Gallardo v. Marstiller

Petitioner Gianinna Gallardo, a Florida student, suffered catastrophic injuries at age 13 when struck by a truck, leaving her in a persistent vegetative state. Florida's Medicaid program paid a portion of her medical expenses. Her family sued the truck company and settled for $800,000, with a designated amount allocated for future medical care. Florida’s Medicaid agency asserted a lien to recover its past payments, but also sought reimbursement from the portion of the settlement explicitly designated for Gallardo's future medical expenses. The case escalated to the U.S. Supreme Court, centering on whether the federal Medicaid Act permits a state to recover reimbursement not only from settlement funds representing past medical expenses, but also from the portion allocated to a beneficiary’s future care.

In a 7-2 decision authored by Justice Clarence Thomas, the U.S. Supreme Court ruled that the Medicaid Act permits Florida to seek reimbursement from the portion of Gallardo’s settlement designated for future medical care. The majority held that the statute’s plain text does not distinguish between past and future medical expenses when authorizing state recovery from third-party tortfeasor payments. Justices Sonia Sotomayor and Stephen Breyer dissented.

Whether the federal Medicaid Act allows a state Medicaid agency to seek reimbursement from a personal injury settlement for payments representing a beneficiary’s future medical expenses, in addition to past medical costs already paid by the program.

The decision significantly strengthened state Medicaid agencies' ability to recoup costs from injury settlements, potentially reducing the net compensation available to severely injured beneficiaries for their long-term care. Advocates for the disabled and personal injury lawyers criticized the ruling, arguing it undermines the financial security of vulnerable individuals reliant on Medicaid. Conversely, states praised the clarity provided for recouping expenditures. The ruling set a precedent affecting how future personal injury settlements are structured when a Medicaid lien is involved, shifting the balance toward state recovery interests.