Unraveling the US Healthcare System.

From the desk of Matt Murdock, Esq.

A Legal and Legislative Deep Dive into America's "Free Healthcare" Patchwork: Origins, Evolution, and Systemic Vulnerabilities

I. The Misnomer of "Free": Deconstructing the U.S. Public Healthcare Landscape

From my office high in the Daley Center, the city of Chicago lays itself bare. I can’t see the skyline, the lake, or the brutalist architecture of the Loop. But I can hear it. I hear the rumble of the L train on the elevated tracks, a rhythmic, metallic heartbeat. I hear the wind, that famous, relentless hawk, cutting around the corners of skyscrapers. I hear the chatter of a thousand conversations in the plaza below, lawyers cutting deals, citizens rushing to court, the entire, messy symphony of a city at work.

And beneath that, if I listen closely, I hear other sounds. I hear the quiet panic in the voice of a man calling Cook County Hospital, his breathing shallow, asking what it will cost. I hear the sound of a phone slamming down in a South Side apartment after a call with an insurance adjuster. I hear the resigned sigh of a mother on the West Side, deciding to skip a prescription for herself to pay for her child’s.

And above it all, I hear the steady, rhythmic whisper of a lie: "free healthcare."

The concept of "free healthcare" within the context of the United States is a persistent, insidious source of political and semantic confusion. It’s a ghost in the machine, a promise whispered during election years that vanishes like fog on Lake Michigan. In nations with universal or single-payer systems, "free" is at least understood at the street level. It means access to care, real and tangible, without the immediate, crushing weight of financial cost at the point of service. This cost-free access is, of course, not truly "free"; it is funded, honestly, through broad-based taxation. It is a social contract, a collective agreement that the price of citizenship includes not letting your neighbor die in the gutter because he can't make a co-pay.

The United States has made no such agreement. Our system is a complex, fragmented hybrid, a Rube Goldberg machine of competing interests where the majority of financing is cruelly, absurdly tied to employment. This structure, a historical accident entrenched since World War II when employers began offering health insurance in lieu of wages frozen by wartime controls, has created a powerful political "resistance" and a path dependency that favors the private, employer-based market. It’s a system built by and for the boardroom, not the emergency room.

As a result, most Americans experience significant, often devastating, point-of-service costs. In 2018, U.S. households directly financed approximately 28% of total healthcare costs. Think about what that number means. It’s not a statistic. It's rent money. It's the grocery bill. It’s the kid’s college fund. The amount families scraped together from their own pockets, through co-pays, deductibles, and outright denials, was equal to the entire share paid by the federal government.

Therefore, when we dare to analyze "free healthcare" in the U.S., we must first admit the term itself is a fraud. We must radically redefine it. It does not refer to a universal right. It never has. Instead, it describes a fragmented "patchwork" of disparate, taxpayer-funded programs. These programs function as "safety nets," but they are nets woven with holes, designed to catch only "for some."

This report will demonstrate that this fragmentation is not a systemic failure. It is not an accident. It is a deliberate historical design choice. The U.S. system is defined by its categorical (rather than universal) approach. This is the key. Public-funded care is extended not as a right of citizenship, but as a specific, means-tested, or service-related entitlement. It is a reward, a handout, a privilege granted only to distinct, "deserving" populations.

This is the sorting mechanism. It's the same cold logic I fight every day in Cook County court. Are you a "deserving" veteran? Are you a "deserving" senior citizen? Are you a "deserving" child? Or are you one of the "undeserving" poor? This categorical design is the foundational DNA of the American system. It’s the original sin, and it is the root cause of its most significant coverage gaps, its bitterest legal conflicts, and its most profound systemic vulnerabilities. This design disproportionately fails Black and Brown communities, the very people the system has sorted, generation after generation, into the "undeserving" pile.

This analysis will examine the origins, the legislative evolution, and the judicial interpretation of the five primary "patches" in this tattered safety net: The Veterans Health Administration (VHA), a direct-care, federally-run model for a service-based population. Medicare, a federal social insurance model for a population defined by age or disability. Medicaid & CHIP, a federal-state welfare model for a population defined by income. The Emergency Medical Treatment & Labor Act (EMTALA), a universal legal mandate for emergency care, but, critically, not a funding mechanism. And finally, the ACA Marketplaces, a subsidized private-market model designed to catch those who fall, screaming, between the other patches.

II. The Foundational Pillars: Medicare, Medicaid, and the Veterans Health Administration

The modern U.S. public healthcare landscape was not built; it was cobbled together in two major phases: the post-WWII establishment of the VHA and the "Great Society" legislation of 1965. These initiatives did not create one system. They created three parallel, non-interacting systems, each built on a fundamentally different, and often contradictory, philosophy.

The legislative road is long and littered with compromises. To understand the machine, you have to look at the blueprints. In 1946, Congress passed Public Law 293, which established the Department of Medicine & Surgery within the VA. This was the Federal Direct Care model, a debt paid to Veterans.

Then, nearly twenty years later, the "Great Society" of 1965 gave us a two-faced coin. With the passage of the Social Security Act amendments, Congress created two programs at once. Title XVIII gave us Medicare, a Federal Social Insurance program for the elderly (65+) and the disabled. This was the "respectable" program, the one you earned. At the exact same time, Title XIX created Medicaid, a Federal-State Welfare model for the specific low-income population. This was the "other" program, the one tied to welfare, the one left to the mercy of state-level politics.

The patchwork only grew more complex from there. In 1972, the Social Security Amendments expanded Medicare to cover a new, specific category: patients with End-Stage Renal Disease (ESRD). Not a "right to health," but a "right to a machine."

In 1986, as part of COBRA, Congress passed the Emergency Medical Treatment & Labor Act (EMTALA). This was not a funding model; it was an Unfunded Mandate / Cost-Shift model. It applied to "any individual" with an emergency, a phrase that would become a legislative time bomb.

In 1997, the Balanced Budget Act gave us the Children's Health Insurance Program (CHIP), another Federal-State Welfare model aimed at low-income children caught in the "gap." This was reauthorized and expanded in 2009 by CHIPRA, which streamlined enrollment and expanded access for immigrants.

Finally, in 2010, the Affordable Care Act (ACA) tried to stitch all the pieces together. It mandated Medicaid expansion and created the Marketplaces, a Mixed-Model aimed at near-universal coverage, at least before the courts got their hands on it.

Subsection 2.1: The VHA (The Direct-Care Model)

The oldest and most structurally unique pillar is the system for military veterans. This is the one you can’t argue with in a debate, the one built on a debt of blood. While its roots trace to the 1865 National Homes for Volunteer Disabled Soldiers created after the Civil War, the modern Veterans Health Administration (VHA) was born from Public Law 293 in 1946. This law established the Department of Medicine and Surgery with a specific mandate to "recruit and retain top medical personnel" by affiliating VA hospitals with medical schools. This set the VHA on a path as an integrated, academic health system.

The VHA is a true direct-care model, the closest this country comes to "socialized medicine" in its purest form. The federal government acts as both the insurer and, in most cases, the provider of care. Its mission is to "Honor America's Veterans by providing exceptional health care."

But even here, in the one system built on a moral absolute, the "categorical" sorting creeps in. Eligibility is not universal for all who served. It is tied to active-duty service with a non-dishonorable discharge. Once enrolled, veterans are sorted into one of eight priority groups based on service-connected disability, income, and other factors. This sorting determines if co-payments are required for certain benefits. The system always has a catch, a way to filter, a way to decide who is truly deserving.

The benefits package is comprehensive, covering preventive checkups, primary care, specialists, mental health, inpatient hospital services, and prescriptions. And its inclusivity has continually, if slowly, expanded legislatively. A recent example is the PACT Act, which finally expanded benefit access for veterans exposed to burn pits and other toxic substances, a debt that took decades to even acknowledge, let alone pay.

Subsection 2.2: The Great Society's Compromise (The Social Insurance & Welfare Models)

The 1965 Medicare and Medicaid Act was not a singular, cohesive vision. It was a profound political compromise, a backroom deal born from the ashes of a 20-year legislative war. President Harry S. Truman’s post-war proposal for a national health insurance plan was defeated, buried under an avalanche of scare tactics from opponents like the American Medical Association (AMA), who decried it as "socialized medicine." I hear those same words echoing in the halls of power today.

By the 1960s, a market failure forced the issue. The elderly population was growing, hospital costs were soaring, and private insurers, in their cold wisdom, viewed the "illness-prone" elderly as a "bad risk," leaving them uninsured. The 1965 law, signed by President Lyndon B. Johnson, was the compromise. It created two separate programs, one federal and one federal-state, effectively fragmenting U.S. public healthcare permanently.

Title XVIII (Medicare - The Social Insurance Model)

Medicare was the program proponents had actually fought for. Established as Title XVIII of the Social Security Act, it created a federal social insurance program. Its purpose and funding were clear: provide health insurance for persons aged 65 and older, funded by a dedicated payroll tax on employees' earnings, matched by employers, which feeds the Hospital Insurance (Part A) trust fund.

Its recipients are defined clearly. Eligibility is an entitlement based on age (65+), disability (after 24 months of Social Security benefits), or a diagnosis of End-Stage Renal Disease. Critically, it is regardless of income. It is not a welfare program. It was for "us," for our parents and grandparents. It was politically bulletproof.

Title XIX (Medicaid - The Welfare Model)

Medicaid was the political concession. It was the price of admission. It was created by incorporating "Eldercare," a counter-proposal pushed by the AMA as a means to prevent a larger, universal federal program. The administration accepted this as a supplement to Medicare.

Authorized by Title XIX of the Social Security Act, Medicaid was established as a cooperative federal-state entitlement program to pay for medical assistance. It is a welfare model, funded by both federal and state tax revenue.

The original recipients tell the whole story. Critically, Medicaid was not originally for all low-income individuals. Its "welfare" DNA tied it to other programs. At first, it gave medical insurance only to "people getting cash assistance," such as low-income families, qualified pregnant women, and individuals receiving Supplemental Security Income (SSI). It was for "them," the other America.

Its structure is its defining feature and its greatest vulnerability: a federal-state partnership. Within broad federal guidelines, each state establishes its own eligibility standards, determines the scope of services, and administers its own program.

This "original sin" of compromise, creating a popular, universal, "earned" federal program (Medicare) alongside a means-tested, state-run "welfare" program (Medicaid), is the direct cause of the profound inequality and fragmentation that would define the U.S. system for the next 60 years. It built the sorting mechanism right into the foundation.

III. The Mandate for Emergency Care: EMTALA (1986)

In 1986, Congress passed the Emergency Medical Treatment and Labor Act (EMTALA) as part of the Consolidated Omnibus Budget Reconciliation Act (COBRA). This law represents the first and only universal, however limited, right to healthcare in the United States.

Its legislative intent was not born of high-minded morality. It was a reaction to raw, undeniable barbarism. It was passed to combat the widespread and dangerous practice of "patient dumping." This practice involved private hospitals denying care or involuntarily transferring uninsured or Medicaid patients to public hospitals, like Cook County right here in Chicago, solely for financial reasons, often without regard to their medical stability.

The data driving the legislation was stark, and it came from my city. Studies in Chicago found that 87% of such transfers were due to lack of insurance, and 24% of these patients were medically unstable. You can’t see that and turn away. Or at least, they couldn't in 1986.

EMTALA, codified at 42 U.S.C. §1395dd, imposes three core obligations on any Medicare-participating hospital with an emergency department:

Medical Screening Exam (MSE): The hospital must provide an "appropriate" MSE to "any individual" who "comes to the emergency department" and requests examination or treatment. The purpose is to determine if an "emergency medical condition" (EMC) exists.

Stabilizing Treatment: If an EMC is found, the hospital must provide stabilizing treatment within its capabilities, regardless of the individual's ability to pay.

Appropriate Transfer: An unstable patient may not be transferred unless a physician certifies the medical benefits outweigh the risks or the patient requests it.

The law also addressed "reverse dumping," obligating specialized hospitals (e.g., trauma centers) to accept appropriate transfers if they have the capability and capacity. Enforcement is overseen by the Centers for Medicare & Medicaid Services (CMS) and the HHS Office of Inspector General (OIG), with severe penalties including Civil Monetary Penalties (CMPs) and termination from the Medicare program.

EMTALA created a de facto universal healthcare system, but one that is arguably the most inefficient, expensive, and reactive model possible. It establishes a legal right to care, but only at the point of an "emergency."

This creates a perverse structural incentive, a trap laid in plain sight. It disincentivizes low-cost primary or preventive care for the uninsured (which is not covered) and incentivizes them to wait. To wait until a manageable condition like diabetes or hypertension deteriorates into a life-threatening, and thus astronomically expensive, "emergency medical condition" like a stroke or a coma. The "unrecouped losses" are then absorbed by hospitals and cost-shifted to taxpayers and privately insured patients. This creates a "hidden tax" that funds this backward, emergency-only system.

Most critically for its future evolution, the law contained a fatal "inconsistency between the Act's legislative intent and its broad language." The intent was clearly economic: to stop financial discrimination. But the language Congress wrote was "any individual." This ambiguity created a legal fissure, a legislative time bomb. It gave federal courts a choice: enforce the narrow intent (economic dumping) or the broad language ("any individual"). As we will explore, their choice to enforce the broad language transformed EMTALA from a law about access into a federal standard of care, pulling "virtually all aspects of patient care in the hospital setting" under its umbrella.

IV. The Evolution of Inclusivity: Expanding the Safety Net (1972-2009)

Following the 1965 legislation, Congress did not pursue universal coverage. That fight was lost, the compromise was set in stone. Instead, it continued its "patchwork" approach. This is the era of "Patching the Patches." Congress would expand inclusivity categorically, not universally, always targeting specific, politically sympathetic groups who fell through the cracks of the system they had designed.

Subsection 4.1: Medicare's First Major Expansion (1972)

In 1972, Medicare eligibility was expanded to cover two new categories: individuals with long-term disabilities and, most notably, individuals with End-Stage Renal Disease (ESRD) requiring dialysis or kidney transplant.

This ESRD expansion was a critical historical anomaly. It was a moment of stunning, singular clarity. It created a unique, disease-specific entitlement. For the first time, Medicare was available to individuals of any age, provided they had an ESRD diagnosis and met the requisite Social Security work-history requirements (either their own, a spouse's, or a parent's).

This 1972 law proved that the U.S. could create a universal, single-payer program. It just proved they would only do it when a problem was defined in a narrow, categorical, and technologically-solvable way. The logic wasn't "healthcare is a right." The logic was, "these specific people are dying and this specific machine, dialysis, can save them." It reinforced the core "patchwork" philosophy: instead of expanding the principle of coverage, Congress just added another patch.

Subsection 4.2: CHIP (1997) - Bridging the Medicaid Gap

The next major expansion came 25 years later. The State Children's Health Insurance Program (CHIP) was a bipartisan, incremental victory. And when I hear "bipartisan, incremental victory," I know it means a truly comprehensive reform has just died. CHIP rose from the comprehensive failure of President Bill Clinton's national health reform plan in 1993-94.

Its legislative origin is telling: CHIP was created as Title XXI of the Social Security Act, part of the Balanced Budget Act of 1997.

The intended recipients (inclusivity) were, once again, a carefully chosen, "deserving" group. The law was designed to address a specific "gap": the nearly 10 million children who were uninsured. These were children in (often working) families with incomes too high to qualify for traditional Medicaid but too low to afford private insurance.

Its structure was familiar. Like Medicaid, it is a federal-state partnership. To "encourage states to participate," CHIP provided enhanced federal matching funds and "greater flexibility in program design." States could use the funds to expand their Medicaid programs, create a separate CHIP program, or use a combination of both.

The creation of CHIP is a textbook example of U.S. healthcare policy's path dependency: comprehensive, universal reform fails, leading to incremental, categorical reform for a specific, sympathetic group (children) that is politically palatable. They gave up on the real fight and settled for crumbs.

Subsection 4.3: CHIPRA (2009) - Streamlining, Inclusivity, and the Seeds of Vulnerability

The Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA), signed by President Barack Obama after similar bills had been vetoed by President George W. Bush, was a pivotal law. It's the moment the system's philosophy began to shift, linking inclusivity to new systemic vulnerabilities.

Its inclusivity expansion was significant. CHIPRA gave states the option to cover "lawfully residing immigrant" children and pregnant women without the typical five-year waiting period, a significant expansion of coverage to non-citizens.

But the most profound structural change was "Express Lane Eligibility" (ELE). This is the key provision linking inclusivity to fraud. CHIPRA gave states a new tool to use eligibility findings from other public-benefit agencies (like the National School Lunch Program, SNAP/food stamps, or TANF) to automatically enroll or renew children in Medicaid or CHIP.

The stated goal of ELE was to "increase enrollment of eligible children" and "expedite and simplify" the process by reducing "administrative burden." This provision represents a major philosophical pivot. For decades, the policy default was gatekeeping. The system was designed to keep people out. It prioritized complex verification to prevent fraud, even if it meant millions of eligible children remained uninsured. It's the same default that keeps my clients in Cook County lockup on unaffordable bail.

CHIPRA signaled a new priority: maximizing enrollment.

The law deliberately accepted a higher risk of error as the cost of achieving higher enrollment. Congress was aware of this potential. CHIPRA included "performance bonus payments" for states that increased Medicaid enrollment. A subsequent OIG investigation found these were subject to miscalculations, resulting in "unallowable bonus payments." Congress also mandated OIG studies to examine ELE. This 2009 law, and its new "coverage over verification" philosophy, was the direct precursor to the streamlined enrollment model of the Affordable Care Act, and the vulnerabilities that model would create.

V. The ACA Transformation and the Judicial Response

The 2010 Patient Protection and Affordable Care Act (ACA) was not a restructuring. It was a war. It was the most significant, bare-knuckle legislative brawl over U.S. healthcare since 1965. It was the first attempt to fundamentally standardize and expand inclusivity, rather than just adding another "patch." It tried to force the system to be better than its fragmented design.

But the law passed by Congress was almost immediately and profoundly altered by the judiciary. The moment it was signed, it was dragged into court.

Subsection 5.1: The Patient Protection and Affordable Care Act (2010)

The ACA sought to create a near-universal coverage system by reinforcing the existing pillars and building a new one to fill the gaps. Its key provisions were:

Medicaid Expansion: The law mandated that all states expand Medicaid to a new, national standard: all non-Medicare eligible adults under 65 with incomes up to 133% (effectively 138%) of the Federal Poverty Level (FPL). For the first time, this would cover childless adults nationally based on income alone. This was the end of the "deserving" poor. It was revolutionary.

Health Insurance Marketplaces (Exchanges): It created state or federal-run exchanges for individuals without access to public or affordable employer coverage.

Subsidies: It provided premium tax credits (subsidies) for individuals with incomes between 100%-400% FPL to make insurance purchased on the exchanges affordable.

Insurance Reforms: It prohibited pre-existing condition exclusions, banned lifetime limits on coverage, and allowed young adults to remain on their parents' plans until age 26.

Subsection 5.2: Landmark Case: NFIB v. Sebelius (2012)

The ACA's central provision, the mandatory Medicaid expansion, was immediately challenged. The case, National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012), went straight to the Supreme Court.

The central question was one of constitutional power. Did the ACA's mandate that states expand Medicaid or lose all existing federal Medicaid funding (which for many states is over 20% of their entire budget) violate the Spending Clause by being unconstitutionally "coercive"?

The ruling was a stunning judicial rewrite. A 7-2 majority found the provision was, in fact, unconstitutionally coercive. Chief Justice John Roberts, in his controlling opinion, argued this was "not just a threat to withdraw funding from a single program, but from all of a state's Medicaid funds," which passed the "point at which pressure turns into compulsion."

The remedy, however, is what changed history. The Court did not strike down the law. In a 5-4 decision, it judicially edited the law. It held that the only constitutional remedy was to prevent the HHS Secretary from withdrawing existing Medicaid funds for a state's non-compliance.

The impact was immediate and devastating. This ruling made Medicaid expansion optional for states. This decision, born directly from the "compromise" structure of Medicaid in 1965, is arguably the most significant judicial intervention in U.S. healthcare history. It ripped the teeth out of the ACA's central mandate.

Subsection 5.3: The "Coverage Gap" - The Human Consequence of NFIB

The NFIB decision had an immediate, devastating, and unintended (by Congress, anyway) consequence: it created the "coverage gap" in the 10 states that still, to this day, have not adopted the expansion.

This gap is a legal and moral black hole. It consists of an estimated 1.4 million low-income adults. Their incomes are too high to qualify for their state's pre-ACA Medicaid rules (which in many non-expansion states do not cover childless adults at any income level). Simultaneously, their incomes are too low (below 100% FPL) to qualify for the ACA's marketplace subsidies, which begin at 100% FPL.

Let me repeat that. The system, in its infinite wisdom, created a class of people too poor to get help.

Why the gap exists is a brutal legislative irony. The ACA was written with the assumption that the Medicaid expansion would be mandatory. Therefore, its architects did not provide subsidies for people below 100% FPL, as it was assumed they would all be on Medicaid. The Supreme Court's 2012 decision created this gap from whole cloth. And that 1965 "welfare" DNA? It's all over this. This gap disproportionately affects adults without children (80% of the gap) and people of color (60% of the gap). The sorting continues.

Subsection 5.4: Landmark Case: King v. Burwell (2015)

Three years later, the Supreme Court heard another case that threatened to destroy the ACA, King v. Burwell, 576 U.S. 473 (2015).

The central question was a masterpiece of legal nitpicking. The ACA's text provided subsidies for those enrolled "through an Exchange established by the State." Challengers argued this plain text precluded subsidies for people in the 34 states that used the federal exchange (

HealthCare.gov

).

The threat was existential. A ruling for the plaintiffs would have eliminated subsidies for 6.4 million Americans. This would have caused premiums to skyrocket, leading to a "death spiral" and the "collapse" of the individual insurance markets.

The ruling (6-3) saved the law. The Court ruled for the government. Chief Justice John Roberts, again writing for the majority, argued that the "by the State" phrase was ambiguous when read in the context of the entire law. He concluded, "Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter."

These two cases, NFIB and King, reveal a Supreme Court acting as a legislative editor. In NFIB, the Court found Congress's means (coercion) unconstitutional, so it rewrote the penalty (making expansion optional) to save the law's structure. In King, it found Congress's text ("by the State") was essentially a "drafting error" that would lead to an absurd result, so it ignored the plain text in favor of the legislative intent.

The ACA as it exists today is a hybrid. It is not the law Congress passed in 2010. It is the law as edited, scarred, and ultimately saved by the Supreme Court in 2012 and 2015.

Subsection 5.5: Legal Fights over Administrative Policy (Work Requirements)

The legal battles also extended to administrative attempts to reshape the programs from within. The Trump Administration, in a clear attempt to revive the "undeserving poor" narrative, approved Section 1115 "waivers" to allow states (like Arkansas and Kentucky) to impose work requirements as a condition of Medicaid eligibility.

These were uniformly struck down by lower courts. The legal reasoning was not political but administrative. The D.C. Circuit Court, in Stewart v. Azar, 366 F. Supp. 3d 125 (D.D.C. 2019), found the Secretary's approval of the waivers "arbitrary and capricious" under the Administrative Procedure Act (APA). The fatal flaw was the Secretary's "failure to consider whether the project will result in coverage loss," a proven outcome in Arkansas. The courts affirmed that the core statutory objective of the Medicaid Act, since 1965, is to furnish medical assistance, not to promote employment. This legal fight was a foundational battle over the very purpose of Medicaid, and the courts, for once, affirmed its identity as a health program.

VI. EMTALA Redefined: Judicial Precedents and Modern Conflicts

That legal "inconsistency" in EMTALA, the time bomb I mentioned, pitting its narrow economic intent against its broad "any individual" language, did not stay dormant. It was settled in the courts, and in the process, the judiciary dramatically expanded the law's power far beyond what Congress ever envisioned.

Subsection 6.1: Landmark Case: In re Baby K (1994)

This 1994 Fourth Circuit case was the pivotal moment: In re Baby K, 16 F.3d 590 (4th Cir. 1994). A hospital sought a declaratory judgment that it was not required by EMTALA to provide mechanical ventilation to "Baby K," an infant born with anencephaly, a "congenital malformation in which a major portion of the brain, skull, and scalp are missing." The baby was "permanently unconscious," and the hospital argued that providing this treatment was medically futile, ethically inappropriate, and far outside the accepted standard of care.

The Fourth Circuit disagreed. It ruled that the hospital must provide the treatment. The court explicitly chose to follow the "plain language" of the statute over its (economic) legislative history. Its reasoning was cold and simple: Baby K was an "individual." Her respiratory distress was an "emergency medical condition." Therefore, EMTALA required stabilizing treatment for that symptom, regardless of the underlying, untreatable condition.

This ruling morphed EMTALA. The law was no longer about why a patient was treated (financial vs. medical reasons). It was now about what treatment they must receive. It became a powerful, universal federal standard of care mandate, judicially expanded to intervene in the most complex medical-ethical decisions.

Subsection 6.2: Landmark Case: Moyle v. United States (2024)

The 2024 case Moyle v. United States (consolidated with Idaho v. United States), 144 S. Ct. 2391 (2024), is the direct logical descendant of In re Baby K. This is the sound of In re Baby K's precedent slamming head-on into the post-Dobbs reality. It represents a direct clash between EMTALA's federal mandate and Idaho's state abortion ban.

The conflict centered on a "gap" between the two laws. Idaho's law bans abortion unless necessary to prevent the woman's death. EMTALA, however, requires stabilizing treatment for any "emergency medical condition," which is defined more broadly as "serious jeopardy to health," not just imminent death. See 42 U.S.C. §1395dd(e)(1)(A). The "gap" includes cases where an abortion is needed to prevent grave health harms (like loss of fertility or kidney failure) but is banned by state law.

The legal question was one of supremacy. Does EMTALA's federal mandate preempt the state law in this "gap"?

The ruling and effect were anticlimactic and terrifying. The Supreme Court dismissed the writ as "improvidently granted." The practical effect of this dismissal was to vacate the Court's own prior stay. This reinstated the lower court's preliminary injunction, which blocks Idaho from enforcing its ban when an abortion is needed as stabilizing care under EMTALA.

This (for now) has stopped the "airlift[ing] of pregnant women out of Idaho," which was reportedly happening every other week while the stay was in effect. But make no mistake, this is not a victory. It is a temporary reprieve. Moyle is not just about abortion. It is the ultimate test of the supremacy created by the courts in Baby K. If Baby K established that EMTALA mandates stabilizing a symptom (respiratory distress) over an ethical judgment, Moyle tests whether it mandates stabilizing a symptom (e.g., hemorrhage) over a state legislative judgment. The heart of that conflict is still beating, and it will be back.

VII. Systemic Vulnerabilities: The Proliferation of Fraud, Waste, and Abuse

The evolution of inclusivity, particularly that philosophical pivot in CHIPRA toward streamlined enrollment, has created profound and well-documented systemic vulnerabilities to fraud. But when we talk about fraud, we have to follow the money. And the system, the media, the politicians, they spend all their time pointing in the wrong direction.

This analysis must distinguish between the political narrative of fraud and the documented reality of where and how fraud occurs.

Subsection 7.1: A Taxonomy of Medical Fraud

Fraud, waste, and abuse are policed by several powerful federal laws, including:

The False Claims Act (FCA), 31 U.S.C. §§ 3729-3733: This is the big one. It protects the government from being overcharged or sold shoddy goods. It is illegal to submit claims for payment to Medicare or Medicaid that one "knows or should know are false or fraudulent."

The Anti-Kickback Statute (AKS), 42 U.S.C. § 1320a-7b(b): This law prohibits offering, soliciting, or paying for patient referrals for medical services.

The Physician Self-Referral Law (Stark Law), 42 U.S.C. § 1395nn: This law prohibits physicians from referring patients to entities with which they have a financial relationship.

Critically, under the civil FCA, "no specific intent to defraud is required." Acting in "deliberate ignorance or reckless disregard of the truth" is more than enough to establish liability. Common schemes include billing for services never rendered, drug diversion, kickbacks for referrals, and (on the beneficiary side) providing incorrect information to qualify for the program.

Subsection 7.2: The "Improper Payments" vs. "Fraud" Narrative

There is a persistent political narrative, a loud, obnoxious noise, that Medicaid, in particular, is "riddled with fraud." This narrative, however, is "simply false" and rests on a deliberate, malicious conflation of "Improper Payments" with "Fraud."

Improper Payments are Not Fraud: The Payment Error Rate (PERM) program, which generates the often-cited improper payment rate, does not measure fraud. "Improper payments" are defined by statute as payments that fail to meet statutory or regulatory rules.

The Reality of Improper Payments: For 2024, the vast majority (74.3%) of these "improper" payments were due to missing or insufficient documentation. The payment may have been for a legitimate service to an eligible person, but the paperwork was incomplete. It’s a clerical error, not a criminal conspiracy.

Who Commits Actual Fraud? The data is clear. The noise is all about "welfare queens" gaming the system. But the sound of the real money, the big money, is the steady clack of a physician's keyboard billing for services never rendered. Fraud is "mostly committed by providers." Data from State Medicaid Fraud Control Units (MFCUs) shows that beneficiary fraud is "negligible," accounting for only 2% of criminal convictions and 0.1% of monetary recoveries.

This political debate is a "red herring." It's a magic trick, a distraction. It obscures two real, distinct, and massive fraud problems: vulnerabilities in enrollment and systemic failures in provider oversight.

Subsection 7.3: Vulnerabilities from Streamlined Enrollment (GAO Reports)

The policy shift from gatekeeping to enrollment maximization, which began with CHIPRA's "Express Lane Eligibility," was adopted and scaled by the ACA. This intentionally traded verification for access. The Government Accountability Office (GAO), in a series of damning reports, has exposed the financial cost of that trade.

In 2016, the GAO conducted undercover testing of the ACA Marketplaces.

Finding 1: The Marketplaces approved subsidized coverage for 15 fictitious applications.

Finding 2 (Tax Verification Failure): This is the key finding. The 2016 coverage year was the first time applicants had to verify they had filed their 2014 taxes to keep subsidies. GAO's fictitious applicants did not file taxes. They were still approved for 2016 subsidies because the Marketplace allowed them to simply attest they had filed, even when IRS data indicated they had not.

Finding 3 (Documentation Failure): For three fictitious applications, GAO submitted no requested documents. The Marketplace failed to terminate coverage for two of them.

This vulnerability is a direct, predictable consequence of a system designed to "trust, but verify later" to reduce "administrative burden" and maximize enrollment. The system was so focused on the front door (enrollment) it forgot to lock the back one (verification).

This lax oversight is not limited to enrollees. The GAO found that after 2014, CMS stopped estimating improper payments due to erroneous eligibility determinations in Medicaid, creating an oversight gap. In a separate report, the GAO found 147 physicians who were still eligible to bill Medicare despite having final adverse actions from state medical boards for felonies.

Subsection 7.4: The MCO "Black Hole" - Failure of Privatized Oversight (OIG Report)

The second, and perhaps larger, fraud vulnerability lies in the privatization of Medicaid itself. Today, 75% of all Medicaid beneficiaries are enrolled in private Managed Care Organizations (MCOs). States pay these MCOs a capitated (per-person) fee and delegate program integrity, including the responsibility to identify and refer provider fraud, to these private companies.

They outsourced the oversight. They gave the keys to the hen-house to the foxes.

A 2025 bombshell report from the HHS Office of Inspector General (OIG) revealed this delegation is a catastrophic failure.

Finding 1: 10% of MCOs (which received $8 billion in payments and covered 1.6 million people) made ZERO referrals of potential provider fraud in 2022.

Finding 2: More than half of all MCOs made 2 or fewer referrals per 10,000 enrollees.

The reason is a fundamental, glaring misalignment of incentives. The OIG noted MCOs have "few incentives" to find and refer fraud. An MCO's primary financial incentive is to manage its own costs. It has already been paid its capitated rate by the state. Reporting a provider for fraud (which is stealing from the taxpayer, not directly from the MCO's bottom line) creates administrative work, network disruption, and no clear financial return for the MCO.

By delegating public oversight to private entities whose financial incentives are not aligned with protecting the taxpayer, the state has created an accountability "black hole." This isn't a "black hole." It's a theft. A massive, state-sanctioned theft of public money, where billions in public funds are paid out and zero fraud is reported.

VIII. Conclusion: The Inherent Tension of a Fragmented System

The "free healthcare" system in the United States is not a single system. It is an 80-year-long series of ad hoc legislative and judicial "patches" (VHA, Medicare, Medicaid, EMTALA, CHIP, ACA). This analysis demonstrates that the system's "problems," its profound coverage gaps and its deep vulnerabilities to fraud, are not accidental. They are the logical, inevitable consequences of a system designed from its inception to be a fragmented "patchwork of safety nets" rather than a universal, cohesive whole.

The evolution of this patchwork, as requested by the query, is defined by three unresolvable, foundational tensions:

Inclusivity vs. Verification: The policy landscape has shifted from gatekeeping (prioritizing verification, as in 1965-era Medicaid) to enrollment maximization (prioritizing access, as in CHIPRA's "Express Lane Eligibility" and the ACA). This was a deliberate choice that accepted a higher risk of enrollment fraud as the price of covering millions of eligible but uninsured Americans.

Legislative Intent vs. Judicial Language: The U.S. healthcare system as it exists today was shaped as much by federal judges as by Congress. The judiciary transformed EMTALA from a narrow anti-dumping law into a broad federal standard of care (In re Baby K) and rewrote the ACA, both limiting its power (NFIB v. Sebelius) and saving it from collapse (King v. Burwell).

Federal Mandate vs. States' Rights: This is the central, unresolved conflict in American healthcare. It is the toxic legacy of the 1965 compromise that created a federal-state model for Medicaid. This structural tension is what enabled the Supreme Court to make expansion optional in NFIB, what created the "coverage gap," and what continues to be fought in 2024 with Moyle v. United States.

Ultimately, the U.S. system's fragmentation, its coverage gaps, and its vulnerabilities to fraud are not bugs. They are features. They are the direct, historical, and legal consequences of a nation that has, time and again, chosen to provide healthcare categorically to "deserving" groups rather than universally as a right of citizenship.

IX. Contemporary Challenges and Future Speculations

The fragmented, categorical nature of the U.S. healthcare system makes it uniquely vulnerable to contemporary political and economic pressures. This is the storm I can hear rolling in over the lake. Two of the most significant challenges are the cost of care for undocumented immigrants and the looming expiration of enhanced ACA subsidies.

Subsection 9.1: The Impact of Care for Undocumented Immigrants

The impact of undocumented immigrants on the U.S. public healthcare system is one of the most contentious, misunderstood, and poisoned topics in American policy.

Federal Ineligibility (The "0%" Cohort): Let's be precise. To address the question of "free healthcare" directly, the percentage of undocumented immigrants receiving comprehensive, federally-funded free healthcare is zero. Federal law, including the Personal Responsibility and Work Opportunity Act of 1996, explicitly bars undocumented immigrants from eligibility for all major federal programs, including traditional Medicaid, CHIP, Medicare, and ACA Marketplace subsidies. They are also prohibited from purchasing unsubsidized coverage on the ACA Marketplace.

The EMTALA Mandate and "Emergency Medicaid": The only federally mandated care this population receives is through two emergency-based channels:

EMTALA: The 1986 law requires Medicare-participating hospitals to provide a medical screening and stabilizing care to any individual with an emergency medical condition, regardless of their ability to pay or citizenship status. This is an unfunded mandate, meaning the hospital must absorb the cost if the patient cannot pay.

Emergency Medicaid: This is not health insurance. It is a limited federal reimbursement program that allows states to claim federal funds for the specific costs of providing emergency, life-saving services to individuals (including undocumented immigrants) who would have qualified for Medicaid based on their income, but do not due to their immigration status.

The Financial Impact (The "<1%" Figure): The cost of Emergency Medicaid is frequently conflated with the cost of the entire Medicaid program. This is a deliberate lie. Data shows that spending on Emergency Medicaid constitutes less than 1% of total Medicaid spending. The primary impact of this care model is not on the federal budget; it is on hospital balance sheets. Because EMTALA provides no funding and Emergency Medicaid is limited, hospitals provide billions in "uncompensated care." This financial strain is particularly acute for rural hospitals and public "safety-net" hospitals. This, in turn, contributes to "cost-shifting," where hospitals raise prices on commercially insured patients to cover the losses from uncompensated care. It’s a system designed to make us resent each other.

State-Level Exceptions: It is crucial to distinguish between federal and state policy. A number of states and the District of Columbia (14 for children, 7 for adults) have elected to use their own state-only funds to provide comprehensive, state-run health coverage to income-eligible individuals regardless of immigration status. These are not federal Medicaid programs and are not federally funded.

Subsection 9.2: The Subsidy Cliff and the ACA Marketplace

The second major challenge is the real crisis, the one I can hear ticking like a bomb. It is the scheduled expiration of the enhanced premium tax credits for the ACA Marketplaces at the end of 2025. These subsidies, first passed in the American Rescue Plan Act and extended by the Inflation Reduction Act, temporarily removed the 400% FPL "subsidy cliff" and increased financial aid for all 22 million subsidized enrollees.

If Congress does not act to extend them, the impacts are projected to be immediate and severe:

Massive Premium Hikes: On average, subsidized enrollees are projected to see their premium payments more than double, with an average increase of 114%. This is happening as the unsubsidized premiums are already set to jump by an average of 26% in 2026, the largest increase since 2018.

The Return of the "Subsidy Cliff": The most dramatic impact will be on middle-income individuals and families earning just over 400% FPL. These enrollees will experience a "double whammy": they will lose all financial assistance and be exposed to the full, unsubsidized premium cost. This effect is particularly devastating for older adults (ages 50-64), who make up over half of all enrollees who would be cut off from subsidies.

Projected Coverage Loss: The price shock is projected to make coverage unaffordable for millions. An estimated 4.8 million people are expected to lose their health coverage in 2026 and become uninsured.

The "Death Spiral" Speculation: This is the most significant speculative threat to the ACA system. It’s a classic "adverse selection" problem. Insurers, expecting healthier enrollees to drop their (now unaffordable) coverage, have already raised 2026 premiums in anticipation. This exodus of healthy individuals leaves a smaller, sicker, and more expensive insurance pool. This, in turn, forces insurers to raise premiums even higher in subsequent years to cover costs, which causes more healthy people to leave. This feedback loop is known as the "death spiral," which could make the individual marketplaces unsustainable.

Subsection 9.3: Projected Future Impact

Speculating on the combined effect of these two issues, the U.S. healthcare system is facing a severe financial stress test. The two problems will compound each other, creating a negative feedback loop that primarily affects hospitals and the insured population.

The expiration of ACA subsidies will likely add nearly 5 million people to the ranks of the uninsured. These individuals will not stop needing care; they will simply shift from being insured patients to uninsured patients. This will dramatically increase the amount of uncompensated care hospitals are forced to provide under the EMTALA mandate.

This places hospitals in a double bind: they face a growing burden of uncompensated care from both the newly uninsured (due to the subsidy cliff) and the existing uninsured (including undocumented immigrants). To remain solvent, these hospitals will be forced to engage in more aggressive "cost-shifting," raising the prices they charge their remaining insured patients, those with employer-sponsored and commercial plans.

This, in turn, will drive up premiums for employer-sponsored plans, placing a greater financial burden on businesses and workers. As employer plans become more expensive, more businesses may drop coverage, pushing more people onto the ACA Marketplaces, which (without subsidies) are simultaneously becoming unaffordable.

This is the cycle. This is the storm. It threatens to destabilize all facets of the U.S. healthcare "patchwork," increasing costs and the number of uninsured, and reviving the very market "death spiral" the ACA was designed to prevent.

From the Daley Center, I hear the sounds of the city, the wind, the train. But I also hear the clock ticking on those subsidies, and the sound of 1.4 million people in the "coverage gap" who have been left in total silence. The system is working exactly as it was designed. And that is the entire problem.

By Matt Murdock, Esq