(Bloomberg Business) — Nearly a fifth of the National Football League settlement approved this week compensating former players with head injuries could go to their health insurers instead.
As a result of federal laws and court rulings enabling insurers to recover costs of medical treatment for injuries, Medicare, Medicaid, and private insurers will be reimbursed before players receive any money. Their share will reduce the value of a deal already criticized by some ex-players’ lawyers as inadequate.
“It is an enormous problem,” said George Washington University law professor Alan B. Morrison, who filed an amicus brief in the case in federal district court in Philadelphia expressing concern about the payments to health insurers. It could take a year or longer to sort out how much is owed to which insurers, Morrison said.
The settlement of the class action lawsuit alleging that the NFL failed to properly investigate and respond to the risk of concussion-causing hits is expected to pay up to $1 billion to more than 20,000 retired players.
The agreement allows for payments of up to $5 million to injured players, or their surviving family members, depending on the severity of the illness or injury. For instance, a player diagnosed with amyotrophic lateral sclerosis (ALS), or Lou Gehrig’s disease, could collect up to $5 million, while someone with Parkinson’s disease would be eligible for a maximum award of $3.5 million.
Most of those awards will be reduced by payments to health insurers, often referred to as medical liens.
Mark Wahlstrom, the president of a Phoenix company that helps administer class action cases and reviewed medical billings in the NFL case, said insurers could end up taking 15 to 18 percent of the compensation set aside for the players. Among the biggest beneficiaries will be Medicare, the government insurance program for the elderly and disabled.