Points of Interest: Retiree Health Care Battle Heats Up

By Tom Philpott

Two separate lawsuits pending before federal district courts in Florida and South Carolina seek an answer.

Lawyer and retired Air Force Colonel George "Bud" Day, lead attorney in the first lawsuit, brought in U.S. District Court in Pensacola, Florida, confidently predicts victory. He has likened the effectiveness of the government's motion to dismiss his lawsuit to "a roll of wet toilet paper." "My 200-pound plaintiffs have just slam-dunked the 10,000-pound gorilla," said Day from his law offices in Fort Walton Beach, Florida. "I'm extremely optimistic."

The battle, however, is far from won. The government's motion to dismiss hangs on three arguments.

  • A 7 June 1956 law that limits retiree access to "space available" care. Day's clients, Medicare-eligible retirees who entered service before that date, must fall under that law because they retired after enactment.
  • Even if the court finds that health care for retirees who entered service before 7 June 1956 is governed by pre-1956 regulations, those regulations did not promise "free and unconditional care at military facilities" as Day contends. A 1942 Army regulation, for example, authorizes retiree care "provided sufficient accommodations are available."
  • Even if recruiters did promise free lifetime care, they lacked legal authority to do so. Therefore the government is not obligated to honor the promise.

In November, Day responded to the government's motion to dismiss with a motion of his own, for summary judgment. He cited a "a mother lode" of service regulations, dating back to 1920, that shows the Army and Navy "did authorize free medical care in military hospitals" for retirees.

Navy and Marine Corps retirees not only were promised care but helped pay for it with 20-cents-a-month deductions in pay for a Navy hospital fund. Day said the money was used to build hospitals for all beneficiaries including retirees.

Navy regulations, Day said, "permitted the retiree and his family to go to a Navy hospital, just like the active duty guy. That gave authority for the Secretary of the Navy—or for any recruiter—to promise lifetime care."

True, he said, no regulation referred to "lifetime" care. But the retiree experience then was to use military medicine until death. Recruiters simply cited their regulations and said lifetime medical care would be provided. "Because, in fact, that's what was happening," Day said.

One 1945 Navy brochure, he said, enticed reserve officers to remain on active duty after the war by referring to an attractive retirement package that included "medical care for you and your dependents." The brochure was signed by then-Navy Secretary James Forrestal, who later became the first Secretary of Defense. Reneging on that promise to those who entered service before 7 June 1956 is an unconstitutional seizing of property, Day contends.

Lawyer Michael Kator keeps close tabs on Day's lawsuit. Kator is lead attorney on a second suit, brought by the Coalition of Retired Military Veterans (CORMV), a one-issue association based in Sumter, South Carolina.

The difference between the two, said Kator, is Day decided to limit plaintiffs to Medicare-eligible retirees who entered service before 7 June 1956. "The relief we seek would reach all retirees" because all retirees "had the same promises made to them, and the same promises broken." The case for younger retirees is not as tenuous as the government suggests, said Kator. The 1956 law's "space available" language, he contends, does not give the government "unbridled discretion" to deny retiree medical care. In fact, as he interprets the law, Congress was trying to limit conditions under which the military could deny care.

But even assuming Congress expected the military to limit retiree care using space availability, that is not what is happening today, he said. "They're allocating care on a money-available basis, not a space-available basis."

Consider the elderly being turned away from military hospitals, Kator said. "They can't get care now under any circumstances, no matter what the availability, because they're over 65 and on Medicare. A retiree under 65 who doesn't pay for TRICARE similarly is not going to be treated. Not because of the availability of space, but because he hasn't paid enough money!"

"Look at prescription drugs," Kator continued. "Medicines have nothing to do with availability of space, or of personnel or of specialists. Prescription drugs have only to do with money.

. . . And that's not what Congress said in 1956, even if you buy the government's argument. They're not living up to the statute or the promise."

For his strategy to work, Kator said, the judge must find that military health care is "deferred compensation" for prior service. If not, the retiree has no property at stake and there is no unconstitutional seizure.

CORMV's suit intentionally does not try to force the military to reopen hospitals or to dictate how health care budgets are spent. That would trigger a fatal jurisdictional challenge. Courts consistently have deferred to the executive branch and Congress on matters likely to impact national security.

But Kator, like Day, seeks $10,000 in damages for each plaintiff, the maximum allowed for property cases brought against the government in federal court.

Retirees seeking more information on Day's class action suit can write to: Class Act Group, 32 Beal Parkway SW, Fort Walton Beach, FL, 32548-5398 or call 1 800 972-6275.

Those who wish information on CORMV can write P.O. Box 1782, Sumter, SC 29151-1782 or call (803) 775-2775.


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