How Birth Injury Settlements Cover Future Costs

• October 9, 2025

Discovering that your child has suffered an injury during birth is a profoundly difficult and emotional experience. As a parent, your immediate focus is on their health and well-being. But as you juggle doctors' appointments and therapies, you may see a new set of worries emerge about the future. How will you afford the lifelong care your child might need? This is a heavy burden to carry.

Birth injury settlements are designed to cover future costs and provide a clear path forward, offering a sense of security and hope during an uncertain time. These settlements are not just about a single payment; they are about building a comprehensive financial foundation to support your child’s needs for the rest of their life.

Key Takeaways for Birth Injury Settlements and Future Costs

• Birth injury settlements are legal agreements designed to provide financial compensation for injuries a child sustained due to medical negligence during birth.


• A "life care plan" is a critical document that outlines a child's projected medical, therapeutic, and daily living needs, forming the basis for calculating a settlement amount.


• Settlements aim to cover both economic damages, such as medical bills and lost future wages, and non-economic damages, like pain and suffering.


• The structure of a settlement, such as a lump sum, structured payments, or a special needs trust, is vital for managing the funds and protecting the child's eligibility for government benefits.


• These legal resolutions focus on holding responsible parties accountable and securing the resources necessary for the child's long-term health and quality of life.

What Is a Birth Injury Settlement?

In simple terms, a birth injury settlement is a formal agreement that resolves a legal claim against a healthcare provider or hospital whose negligence may have caused the injury. "Negligence" is a legal term that means a medical professional failed to provide the accepted standard of care that another reasonable professional would have under similar circumstances, and this failure resulted in harm. Instead of going through a full, lengthy trial, the parties involved agree on a financial amount to compensate the injured child and their family.

This process is a negotiation between your legal representatives and the responsible party’s insurance company and lawyers. The primary objective is to secure the funds necessary to give your child the best possible quality of life. The parties involved in reaching this agreement typically include:

• The family of the injured child


• Legal counsel representing the family


• The doctors, hospital, or medical facility involved


• The insurance companies and legal teams for the medical providers

By reaching a settlement, families can often receive the funds they need sooner and with less uncertainty than a trial might involve. This financial security is crucial for planning and providing for a child's complex, long-term care needs without delay.

The Crucial Role of a Life Care Plan in a Settlement

Perhaps the single most important document in determining the value of a settlement is the life care plan. This is not just a simple budget; it is a highly detailed, evidence-based roadmap that outlines your child’s medical and non-medical needs for their entire life. Creating this plan is a collaborative effort involving a team of professionals who can accurately project future costs.

This team often includes doctors, therapists, economists, and certified life care planners who work together to create a comprehensive projection. This plan becomes the foundation upon which all financial negotiations are built. It provides a clear, documented justification for the amount of compensation being sought, ensuring that no detail is overlooked.

For families across Michigan, from Grand Rapids to Sterling Heights, having a meticulously prepared life care plan is essential for demonstrating the true lifetime cost of an injury. It might detail the need for ongoing care coordination with specialists at major centers like the University of Michigan's C.S. Mott Children's Hospital to ensure all future needs are anticipated.

A thorough life care plan will typically include detailed projections for:

• Medical and Rehabilitative Care: This includes everything from routine physician check-ups and surgical procedures to projected costs for physical, occupational, and speech therapy sessions over a lifetime.


• Educational Needs: The plan may outline costs for special education programs, tutors, or assistive technology needed in a school setting to help your child achieve their full potential.


• Housing and Daily Living: This section addresses the costs of home modifications, in-home nursing or attendant care, and specialized transportation.


• Assistive Devices and Equipment: It projects the costs of purchasing, maintaining, and replacing durable medical equipment, mobility devices, and communication aids throughout the child’s life.

This document transforms abstract future needs into concrete, calculated figures, making it an indispensable tool in settlement negotiations. It ensures that the final agreement is based on a realistic assessment of your child’s needs, not guesswork.

Calculating the Full Value of a Birth Injury Claim

Once a life care plan is in place, the next step is to calculate the total value of the claim. This value is determined by adding up different types of "damages," which is the legal term for the losses and harm suffered. These damages are generally separated into two main categories: economic and non-economic. A fair settlement must account for both to truly address the complete impact of the injury on your child and family.

Economic Damages: The Tangible Costs

Economic damages are the financial losses that can be calculated and assigned a specific dollar amount. They represent the direct costs associated with the birth injury, both those you have already paid and those projected for the future. The life care plan provides the foundation for most of these calculations.

Common types of economic damages in a birth injury case include:

• Past and Future Medical Expenses: This covers all medical care from the moment of birth through the child's entire life expectancy, including bills for doctors, hospitals, surgeries, and medication.


• Costs of Therapy and Rehabilitation: This includes the projected lifetime costs for all necessary therapies, such as physical, occupational, speech, and behavioral therapy.


• Lost Future Earning Capacity: If the injury will prevent your child from working or limit their ability to earn an income as an adult, the settlement can include compensation for this lost potential. Economists help calculate this amount based on factors like education, life expectancy, and potential career paths.


• Expenses for Special Education and Tutoring: This covers the costs of specialized schooling, tutors, and educational resources required to support your child’s learning needs.

These damages are intended to provide a stable financial resource, ensuring that your child can access every necessary treatment and support service without creating financial hardship for your family.

Non-Economic Damages: The Intangible Impact

Non-economic damages are just as real as economic ones, but they are more difficult to assign a dollar value to. They are meant to compensate for the profound, personal, and human toll that the birth injury takes on your child. This is compensation for the suffering and loss of experiences that cannot be replaced.

These intangible losses are a critical component of a settlement and include:

• Pain and Suffering: This acknowledges the physical pain and emotional distress the child has endured and will continue to experience because of their injury.


• Loss of Enjoyment of Life: This compensates for the child's diminished ability to participate in and enjoy daily activities, hobbies, and life experiences that they otherwise would have.


• Emotional Anguish: This addresses the mental and emotional trauma associated with living with a significant disability or medical condition.


• Disfigurement and Impairment: If the injury resulted in physical disfigurement or permanent impairment, this part of the settlement provides compensation for the associated challenges.

It is important to note that Michigan has laws that may place limits, or "caps," on the amount of non-economic damages that can be awarded in medical malpractice cases. According to Michigan medical malpractice law, these amounts are adjusted annually. A knowledgeable legal team can explain how these laws might apply to your specific situation.

How a Settlement is Structured to Protect Your Child's Future

Receiving settlement funds is not always as simple as getting a single check. In fact, a one-time lump sum may not be the best way to manage the money and ensure it lasts for your child’s entire life. The structure of the settlement is carefully planned to provide long-term financial security and protect your child's future.

There are several ways a settlement can be structured, each with its own benefits. The right choice depends on your family’s unique circumstances and your child’s specific needs.

• Lump-Sum Payment: In some cases, the settlement is paid as a single, large payment. This provides immediate access to the funds but requires careful financial management to ensure the money lasts.


• Structured Settlement: This is a more common approach for significant birth injury cases. The settlement is used to purchase an annuity, which then provides a steady stream of guaranteed, tax-free payments over a long period of time, or for the child's entire life. This ensures a stable source of income to cover ongoing expenses.


• Special Needs Trust: This is a crucial tool for protecting a child's eligibility for important government benefits like Medicaid and Supplemental Security Income (SSI). The settlement funds are placed into a special legal trust managed by a trustee. The trustee then uses the funds to pay for services and items that government benefits do not cover, like home modifications, therapy, and education, without jeopardizing the child’s access to essential public assistance. According to the Social Security Administration, these trusts are specifically designed to supplement, not replace, government aid.

Choosing the right structure is a critical decision that helps safeguard your child's financial future, ensuring that the settlement funds are managed wisely and provide support for decades to come.

FAQs: How Birth Injury Settlements Cover Future Costs

We understand you likely have many questions about this complex topic. Here are answers to some common concerns families have about birth injury settlements.

What happens if my child's medical needs change or a new treatment becomes available after the settlement is finalized?

This is a primary reason why a life care plan is so detailed and why structured settlements or trusts are often recommended. A well-designed plan anticipates future medical advancements and includes funds for contingencies. A structured settlement or trust provides a steady stream of funds over many years, which can be adapted to cover new or changing expenses as they arise, offering flexibility for an unknown future.

Could accepting a settlement affect my child's eligibility for government benefits like Medicaid?

Yes, it can, which is why financial planning is so critical. A large, lump-sum payment directly to the child or parents could disqualify them from needs-based government assistance. This is why a Special Needs Trust is an essential tool. By placing the settlement funds in this type of trust, the money can be used for the child's benefit without counting as a personal asset for benefit eligibility purposes.

How can my family afford to hire a lawyer for a birth injury case?

Most personal injury law firms that handle birth injury cases work on a contingency fee basis. This means you do not pay any upfront fees. The law firm covers all the costs of investigating and pursuing the case. The firm only receives a fee, which is a percentage of the total amount recovered, if they are successful in obtaining a settlement or verdict for you. If there is no recovery, you owe no legal fees.

Building a Foundation for a Secure Future

Facing the reality of a lifelong birth injury is a journey no parent should have to take alone. While no amount of money can undo the harm that was done, a comprehensive settlement can lift the financial weight from your shoulders and provide the resources your child needs to thrive. It is a powerful tool for accountability and a crucial step in building a secure foundation for your child’s future. By planning for every cost and structuring the funds wisely, you can ensure your child has access to the best care, support, and opportunities for their entire life.

At Goodman Acker P.C., we understand the emotional and financial challenges you are facing. Our dedicated attorneys are committed to helping families in Southfield, Grand Rapids, Sterling Heights, and across Michigan seek justice and secure the future their children deserve. We approach every case with compassion and a tireless dedication to our clients' well-being.

If your child has suffered a birth injury, please do not hesitate to reach out. Contact us today at (248) 831-1507 or through our online form for a free, no-obligation consultation to discuss your situation and learn how we can help.