What states do not put medicare liens on litigation settlements dealing with lawsuits concerning health?

Are you sure you don't mean Medicaid liens? The following is a guide for processing Medicare liens and it makes no mention of which state is involved, which implies to me that Medicare liens are not affected by state laws. Medicaid is however more under the jurisdiction of states and before anyone can help you here, the state you are located in, is a vital piece of information. I have found information which indicates that Medicare liens occur in "most states". It is easier to try and find the requirements for your one state than to investigate the policies of all 50. And you can try searching your specific question for your state. Mine came right up. My feeling is that no state has the authority to interfere with the fed. government's duty to collect reimbursement for costs that Medicare paid but for which in the final analysis, Medicare was not actually responsible for.
Medicaid might be a different story.
The Idiot’s Guide to Medicare Lien Resolution | Lien Resolution Services - Healthcare Lien Resolution Blog (http://lienblog.wordpress.com/2010/07/02/the-idiot%E2%80%99s-guide-to-medicare-lien-resolution/)
PS Excuse the word idiot in the link. I didn't put it there, it is part of the title of the publication.

Medicaid aids the less fortunate and Medicare cares for the elderly.

Which one are you specifically asking about?