Band-Aids to Bullet Wounds: Deconstructing the Lie of U.S. Health Care.

From the desk of Matt Murdock, Esq.

It is late. The kind of late where the city’s breathing changes from a roar to a ragged, breathless rattle. The air in the office is stale, smelling faintly of old coffee and the dust that settles on legal tomes no one ever opens willingly. My fingers are running over the raised dots of these braille transcriptions, thousands of pages of statutes, case law, and bureaucratic nightmares. To me, they do not just feel like paper. They feel like scar tissue. Rigid, uneven, and marking the places where the system has bled.

You asked for a deep dive into America’s so-called "free healthcare" system. The truth? It does not exist. Not in the way you think. Not in the way it should.

What we have instead is a patchwork. A frayed, cynical quilt stitched together over eighty years by politicians more interested in winning votes than saving lives, and by judges who treat the law like a semantic game rather than a shield for the vulnerable. It is a system designed, and I use that word deliberately, to have gaps. People fall through those gaps every day. I hear them hit the bottom.

This is not a system of rights. It is a system of categories. Are you old enough? Are you poor enough? Did you bleed in a uniform? If you do not fit neatly into one of their little boxes, you are on your own until your body is failing fast enough to qualify as an "emergency."

Let us tear the whole thing down and see how it was built.

I. The Lie of "Free": A Deconstruction

In most parts of the world, "free healthcare" means you walk into a clinic, you get treated, and you walk out without opening your wallet. It is funded by taxes, sure, but the care itself is a right of citizenship.

Not here.

According to Black’s Law Dictionary, a "right" is defined as "a power, privilege, or immunity secured to a person by law" (Black’s Law Dictionary (11th ed. 2019)). In America, healthcare is not a right; it is a commodity. Our system is a hybrid monstrosity where care is tied primarily to employment, a relic of World War II wage freezes that incentivized bosses to offer benefits instead of cash. This created a path dependency that we have never shaken. It entrenched powerful interests, insurance companies, hospital conglomerates, that have fought tooth and nail against any public system that might cut into their profits.

For most Americans, "access" to care just means the privilege of paying eye-watering premiums, deductibles, and co-pays. In 2018, American households paid about 28% of the total national healthcare bill directly out of their own pockets. That is roughly the same share as the entire federal government pays.

So, when we talk about the "public safety net," we are not talking about a floor that catches everyone. We are talking about a series of smaller nets, hung at different heights, with massive holes in between them.

II. The Pillars of Clay: VHA, Medicare, and Medicaid

The modern landscape was built in two main phases: the post-WWII era and Lyndon Johnson’s "Great Society" in 1965. They did not build one house. They built three different shacks on the same lot and hoped they would not collapse.

2.1 The Blood Price: Veterans Health Administration (VHA)

The oldest pillar is the VHA. Its roots go back to the Civil War, but the modern version started in 1946. This is a pure "direct-care" model. The government is the insurer, the doctor, and the hospital owner.

It is comprehensive, but it is exclusive. It is an earned benefit, tied to active-duty service and discharge status. It is the country’s way of saying, "Thank you for your service, we will try to fix what we broke." It continually expands, like the recent PACT Act for toxic burn pit exposure, reinforcing that this care is a debt owed for specific sacrifices, not a universal human need.

2.2 The Great Compromise: Medicare and Medicaid (1965)

This is where the real fracture happened. In the 60s, old folks could not get insurance because they were "bad risks," insurance speak for "likely to actually need care." The market failed them.

President Johnson wanted a universal system. He did not get it. He got a compromise that broke the country into two classes of people: the "deserving" recipients of social insurance, and the "undeserving" recipients of welfare.

Medicare (Title XVIII) was the win. It is social insurance. You pay into it your whole working life through payroll taxes, and when you hit 65, you get coverage. It is a federal entitlement. It carries no stigma because people feel they "paid for it."

Medicaid (Title XIX) was the concession. It was thrown in to appease the American Medical Association, who were screaming about "socialized medicine." It was designed as a federal-state partnership, a welfare program for the specifically defined poor.

And here is where the systemic rot sets in. I can smell the decay on the statutes themselves, the faint, sour odor of a compromise that sold out the most vulnerable for political convenience. By making it a state-run welfare program, Congress allowed, no, invited local prejudices to infect federal policy. This was not an accident. It was a design feature. Originally, Medicaid was tied to cash assistance. In practice, this meant that in many states, particularly in the South, Jim Crow policies that restricted Black Americans from accessing welfare cash also effectively barred them from Medicaid. It was segregation by bureaucracy.

Let us be perfectly clear on the mechanism of this particular injustice. When Congress passed Title XIX of the Social Security Act in 1965, creating Medicaid, it did so with a tragic flaw. See Social Security Amendments of 1965, Pub. L. No. 89-97, § 121(a), 79 Stat. 286, 343 (codified as amended at 42 U.S.C. §§ 1396 et seq.). The promise was healthcare for the poor. The reality was a federal-state partnership, a "jointly funded, cooperative venture." Harris v. McRae, 448 U.S. 297, 308 (1980). That word, "cooperative," is where the devil lives. It meant that to get this legislation passed, to appease the Southern Democrats whose votes were non-negotiable, the federal government gave the states the keys. The states, in turn, were handed a federal scalpel to continue their long-practiced surgery on the body politic, excising Black communities from the public good.

The core of the rot was categorical eligibility. This is the bureaucratic term for the tie that binds. To be eligible for Medicaid in 1965, you generally had to be eligible for one of the existing federal cash assistance programs. The largest and most significant of these was Aid to Families with Dependent Children (AFDC). See, e.g., King v. Smith, 392 U.S. 309, 316-17 (1968). The logic was simple, and simply devastating: If a state could prevent you from getting AFDC, it could, with the same pen stroke, deny your sick child a doctor. The federal government would even pay for the ink.

This linkage transformed the welfare office into the gatekeeper of the hospital. And the welfare office, in many jurisdictions, was a fortress of Jim Crow. The states did not need "Whites Only" signs on the Medicaid applications; their methods were far more insidious, cloaked in the neutral-sounding language of "local administration" and "moral fitness."

This is where the segregation by bureaucracy became a street-level reality. I hear the echoes of it every day. It is the sound of a door being quietly, politely, and legally shut in someone's face. The primary weapons for this were the "suitable home" policies and the infamous "man-in-the-house" rules.

Let's look at "suitable home" provisions. These were state-level requirements allowing social workers to deny AFDC benefits if the child's home was deemed "unsuitable." What, precisely, constituted "unsuitable"? That determination was left to the broad, unchecked discretion of the local administrator. See, e.g., King v. Smith, 392 U.S. at 322-23 (discussing the history of these policies). In practice, a "suitable home" was often a home that was not Black. It was a tool to enforce a specific, racialized brand of morality. A Black single mother was, by systemic definition, suspect. Her home was presumed "unsuitable" until proven otherwise, a burden she could almost never meet.

Even more pernicious was the "man-in-the-house" rule, also known as the "substitute father" rule. This rule, as implemented by states like Alabama, made a family ineligible for AFDC if a man was found to be cohabiting with the mother, regardless of whether he was the children's father or had any legal obligation to support them. King v. Smith, 392 U.S. at 313. This was the issue that finally reached the Supreme Court.

The case of Mrs. Smith, a mother of four in Alabama, laid the rot bare for all to see. She was denied aid because she was cohabiting with a Mr. Williams. Alabama's regulation created an irrebuttable presumption that Mr. Williams was a "substitute father" and thus, his income was available to the children, even though he was not legally liable for their support. Id. at 328-29. This was not a policy about "need." This was a policy of surveillance and control. Social workers would conduct "night raids," arriving unannounced to search homes for any sign of a male presence. Id. at 318 n.14 (citing scholarly works describing the practice). Can you hear that? The sound of a midnight knock, the terrified heartbeat of a mother trying to keep her family together, the rustle of a man's coat in a closet that will now cost her children their food and their medicine. That is the sound of bureaucracy as a weapon.

The Supreme Court, in a rare moment of clarity, struck down the Alabama rule. Id. at 333. The Court found that the state's regulation was inconsistent with the federal Social Security Act. Congress, the Court reasoned, intended to provide for dependent children "who are in fact deprived of 'parental' support," not just those who fit a state's narrow, moralistic definition. Id. at 333 (emphasis in original).

But King v. Smith only cut off one head of the hydra. It did not, and could not, fix the original sin of the statute: the delegation of power. For years, these rules had been enforced. For years, Black families were systematically denied the "cash assistance" that was the only gateway to Medicaid. The damage was done. A generation of Black children grew up without consistent medical care, not because the law explicitly forbad it, but because the law had been built with a trapdoor.

This is the essence of de facto discrimination, as opposed to de jure. See Black’s Law Dictionary (11th ed. 2019) (defining de jure as "existing by right or according to law" and de facto as "existing in fact; having effect... but not officially or legally"). The Medicaid statute did not say "states may deny benefits to Black people." It said "states may determine eligibility for AFDC," knowing full well how they would determine it. See 42 U.S.C. § 1396a(a)(10) (linking Medicaid eligibility to AFDC). It was a knowing wink, a legislative nod that allowed the states to do the dirty work.

This is not history. The rot is still in the foundations. The very same states that used "suitable home" rules in the 1960s are, by and large, the exact same states that refused to expand Medicaid under the Affordable Care Act. See Nat'l Fed'n of Indep. Bus. v. Sebelius, 567 U.S. 519 (2012). When the Supreme Court made Medicaid expansion optional, it re-activated that same 1965 flaw. Id. at 587-88. It gave those states the power, once again, to deny healthcare to their most vulnerable populations. And who falls into the "coverage gap" created by this refusal? Overwhelmingly, it is the same Black and Brown communities in the same Southern states.

The tools have changed. The social worker's night raid has been replaced by a governor's press conference. The "man-in-the-house" rule has been replaced by legislative refusals based on "fiscal responsibility." But the sound is the same. It is the sound of a door shutting. It is segregation by bureaucracy, refined for a new century. The federal promise of health remains infected by the "local prejudices" Congress itself embedded in the law's DNA.

That "original sin" of 1965, splitting the system into a federal program for the elderly (mostly white at the time) and a state-run welfare program for the poor (disproportionately Black and brown), is the direct ancestor of the massive inequities we see today.

III. EMTALA: The Mandate of Last Resort

It is 1986. Private hospitals are playing a sick game called "patient dumping." A guy comes into the ER, bleeding out or in labor, but he has no insurance. So, the hospital essentially shoves him into a taxi or an ambulance and sends him to the county public hospital. People died in transit. A lot of them.

Congress passed the Emergency Medical Treatment and Labor Act (EMTALA).

This is the only truly "universal" right to healthcare we have, and it is incredibly grim. It says that if a hospital takes Medicare (which they almost all do), they must provide a "medical screening exam" to anyone who walks in the door. If that person has an "emergency medical condition," the hospital must stabilize them before transferring them, regardless of their ability to pay.

Sounds good, right? Wrong.

It is an unfunded mandate. Congress ordered hospitals to provide the care but did not provide the money to pay for it. Hospitals eat those costs and then jack up prices for everyone else to compensate. It is a hidden tax.

More importantly, it creates a perverse incentive. It tells the uninsured: "Do not get preventive care. Do not manage your diabetes. Wait until your foot is gangrenous and you are septic, then we will spend fifty thousand dollars to save your life in the ER, instead of fifty dollars for insulin last month."

It is a system that waits for the crash before it thinks about installing brakes.

IV. Adding Patches to the Quilt (1972-2009)

Instead of fixing the foundation, Congress just kept nailing new boards over the holes whenever the screaming got too loud.

1972: End-Stage Renal Disease (ESRD). Suddenly, Medicare covered anyone, of any age, if their kidneys failed and they needed dialysis. Why? Because the technology existed to save them, and it was too expensive for individuals. It proved we could have universal, single-payer coverage if we wanted it, we just only want it for very specific, politically sympathetic organs.

1997: CHIP (Children’s Health Insurance Program). After the Clintons failed to get universal healthcare passed in '93, they settled for CHIP. It covered the kids whose parents made too much for Medicaid but too little for private insurance. Kids are easy political wins.

2009: CHIPRA. This one is important. It signaled a philosophical shift. For decades, the priority was "gatekeeping," keeping ineligible people out to prevent fraud. CHIPRA prioritized getting eligible people in. It introduced "Express Lane Eligibility," allowing states to use data from other programs (like food stamps) to automatically enroll kids. It traded verification rigor for access. Remember that. It becomes important later.

V. The ACA: A Noble Attempt, Judicially Maimed

The Patient Protection and Affordable Care Act (ACA) of 2010 was supposed to fix it all. It was meant to be a three-legged stool: mandatory Medicaid expansion for the poor, subsidized private marketplaces for the middle class, and insurance reforms to stop the worst abuses.

Then the Supreme Court got hold of it.

In NFIB v. Sebelius (2012), Chief Justice Roberts pulled a magic trick. He upheld the individual mandate as a tax, but he gutted the Medicaid expansion. He ruled that forcing states to expand Medicaid was "unconstitutionally coercive."

This decision created the "Coverage Gap." It left millions of people, disproportionately Black adults in the South, in a no-man's-land where they were too poor for marketplace subsidies (which only started at 100% of the poverty line, because the law assumed everyone below that would be on Medicaid) but "too rich" for their state’s draconian, pre-ACA Medicaid rules.

I see clients in this gap all the time. Working two jobs, making twelve thousand a year, and told by the richest country on Earth that they are too poor to deserve help. It is not just a policy failure; it is a moral obscenity.

VI. The Courts Redefining Reality

Judges do not just strike down laws; they rewrite them from the bench.

Look at In re Baby K (1994). The court took EMTALA, a law designed to stop economic patient dumping, and turned it into a federal standard of care. They ruled a hospital had to keep ventilating an anencephalic infant (a baby born missing most of its brain) every time she came in with respiratory distress, even though the underlying condition was hopeless. The court said: The law says stabilize the emergency condition (the breathing), not cure the patient. It prioritized literal statutory text over medical common sense or legislative intent.

Fast forward to 2024. Moyle v. United States. Idaho passes a draconian abortion ban. EMTALA says hospitals must stabilize patients with emergency conditions. Sometimes, that stabilizing treatment is an abortion, not to save a life, but to prevent massive, permanent organ damage. Idaho says "let them suffer." The Feds say "you must treat."

The Supreme Court recently dodged the question, dismissing the case on technical grounds, which temporarily keeps EMTALA supreme. But the fight is not over. It is a battle between a federal mandate to save health and a state’s desire to control bodies.

VII. The Grift: Where the Real Money Goes

You hear politicians talk about "welfare queens" and beneficiary fraud. That is a smokescreen. It is a lie designed to make you hate your neighbor so you do not look at the man picking your pocket.

Data from Medicaid Fraud Control Units shows beneficiary fraud is negligible. The real money, the billions, is stolen by providers and corporations.

Black’s Law Dictionary defines "fraud" generally as "a knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment" (Black’s Law Dictionary (11th ed. 2019)).

In healthcare, we have the False Claims Act, which does not even require specific intent to defraud, just "reckless disregard" for the truth. We see doctors billing for procedures that never happened. We see massive upcoding.

But the newest, biggest vulnerability? Managed Care Organizations (MCOs). We privatized Medicaid. States pay these private insurance companies a flat fee per person to manage their care.

A 2025 HHS Inspector General report just blew the lid off this. It found that 10% of these MCOs, covering millions of people and taking billions in tax dollars, made zero fraud referrals in an entire year. Zero.

Why? Because if they find fraud, they do not get to keep the recovered money; the state does. But finding it costs them money in administrative work and annoys the doctors in their networks. We created a system where the fox is guarding the henhouse, and the fox is getting paid specifically not to count the chickens.

VIII. The Systemic Failures: A Summary

The entire system is defined by unresolvable tensions:

Inclusivity vs. Verification: We want to cover people, but every time we streamline enrollment (like under the ACA), we open doors to fraud that the oversight systems are too slow to catch.

Federal Mandate vs. States' Rights: The eternal American Civil War, fought now with gavels instead of cannons. The refusal of states to expand Medicaid is just the latest battle.

Legislative Intent vs. Judicial Pedantry: Congress passes a law to do one thing, and thirty years later a judge decides it means something else entirely because of a misplaced comma.

IX. The Future is Bleak

Two massive storms are about to hit this already leaking ship.

First, the Subsidy Cliff. The enhanced ACA subsidies that have made insurance affordable for millions are set to expire at the end of 2025. If they do, premiums will double for many. Healthy people will drop coverage. We will enter a "death spiral" where only the sick remain in the insurance pool, driving costs up until the whole market collapses.

Second, the Undocumented Reality. Let us be clear: undocumented immigrants get almost zero federally funded non-emergency care. They cannot get Medicaid. They cannot even buy full-price plans on the ACA exchange. They only get EMTALA, stabilization in the ER, which hospitals have to eat the cost for. As the uninsured rates rise again, hospitals will buckle under the weight of uncompensated care, and they will close. Rural areas will be hit hardest.

Sitting here, feeling the raised dots of these laws under my fingers, it all feels so fragile. We have built a healthcare system that is fantastic if you are a wealthy, healthy person with a good corporate job. For everyone else, for the people I represent here around the Era Social Club, Chicago, it is a daily gamble.

They did not build a safety net. They built a maze, and they are betting on you dying before you find the exit.

Justice never sleeps, but it sure as hell seems to be in a coma.

Matt Murdock, Esq.