Earlier this week, two Democratic senators announced they have requested a criminal investigation into Supreme Court Justice Clarence Thomas — regarding, in part, a loan for a luxury RV provided by a longtime executive at UnitedHealth Group, one of America’s largest health insurers.
Thomas apparently recused himself in at least two cases involving UnitedHealth when the loan was active, according to a Rolling Stone review. Yet, he separately chose to participate in another health insurance case and authored the court’s unanimous opinion in 2004. The ruling broadly benefited the industry — shielding employer-sponsored health insurers from damages if they refuse to cover certain services and patients are harmed. Thomas’ advice to patients facing such denials? Pull out your checkbook.
While UnitedHealth was not a party to the case, the company belonged to two trade associations that filed a brief urging the Supreme Court to side with the insurers.
“As we saw so starkly this term, Supreme Court decisions can have sweeping collateral implications: If the court rules in favor of one insurance giant, for instance, it tends to be a boon for all the other insurance giants, too,” says Alex Aronson, executive director at the judicial reform group Court Accountability. “That was the case here, and it’s a perfect example of why justices shouldn’t accept gifts — especially secret ones — from industry titans whose interests are implicated, whether directly or indirectly, by their rulings.”
The public had no way of knowing about Thomas’ RV loan at the time of the decision: The loan was only exposed by The New York Times last year. Senate Democrats investigating Thomas believe that much or all of the loan, for a $267,230 motor coach, was ultimately forgiven. Sens. Sheldon Whitehouse (D-R.I.) and Ron Wyden (D-Ore.) recently requested the Justice Department investigate whether Thomas reported the forgiven portion of the loan on his tax filings, after he failed to disclose it in ethics forms.
Meanwhile, Thomas’ health insurance opinion has had wide-ranging, long-lasting ramifications, according to Mark DeBofsky, an employee benefits lawyer and former law professor.
“It hasn’t been rectified. The repercussions continue,” DeBofsky tells Rolling Stone. “People who are in dire need of specific medical care, and [their] insurance company turns around and says, ‘That care is not medically necessary,’ and there’s an adverse outcome as a result of the denial of the treatment, or hospitalization, or service — there’s no recompense for what could have been an unnecessary death or serious injury.”
Since last year, the Supreme Court has faced an unprecedented ethics crisis, with much of the focus aimed squarely at Thomas. ProPublica reported that Thomas received and failed to disclose two decades worth of luxury gifts from a conservative billionaire, Harlan Crow, who allegedly provided free private jet and superyacht trips to Thomas and his wife; bought a house from Thomas and allowed the justice’s elderly mother to live there for free; and paid for at least two years of boarding school tuition for Thomas’ grandnephew.
Last year, the Times reported that another friend of Thomas gave the justice a loan — and later forgave much of it — for the justice to purchase a luxury RV, which had been a central piece of his “unpretentious” persona, as 60 Minutes put it. Years ago, a journalist from the show tagged along with Thomas in the motor coach, reporting back that the justice and his wife use the vehicle to “explore the United States in their downtime,” and that they have “been known to put up overnight in Walmart parking lots.”
Thomas received the $267,230 loan for the RV in 1999 from health insurance executive Anthony Welters, who told the Times: “I loaned a friend money, as I have other friends and family. We’ve all been on one side or the other of that equation. He used it to buy a recreational vehicle, which is a passion of his.”
At the time the loan was issued, Welters was the CEO of AmeriChoice — a health maintenance organization, or HMO, that provided services to Medicaid patients. After the firm was acquired by UnitedHealth in 2002 for $530 million in stock, Welters went on to enjoy a long career at the company.
In 2004, UnitedHealth listed Welters on its website as one of its business leaders. Two years later, the company appointed Welters as an executive vice president at the UnitedHealth Group level. The next year, it said Welters would head UnitedHealth’s public and social markets group. By 2013, Welters held 583,506 UnitedHealth shares, worth roughly $36 million at the time. He retired from the company in 2016.
According to a memo released by the Senate Finance Committee, Welters extended Thomas’ RV loan in 2004 for 10 years. Welters forgave the loan in 2008, writing in a note that Thomas had already paid enough interest, so he no longer wished to receive payments on the RV. Based on their review of documents, committee staff wrote that Welters “forgave a substantial amount, or even all of the principal balance of his loan to Clarence Thomas.”
Between 2002 and 2005, Supreme Court records show, Thomas took no part in the consideration of two matters in which UnitedHealth was a named party.
Federal law requires Supreme Court justices to recuse themselves in any case where their “impartiality might reasonably be questioned.” The justices decide for themselves when such a move is necessary — and when they do withdraw from a case, they rarely say why. Thomas does not appear to have explained his decision to withdraw from the two matters that directly involved UnitedHealth.
Thomas did not take similar steps in Aetna Health Inc. v. Davila, a case that broadly affected the health insurance industry. He instead authored the court’s opinion, which expanded insurers’ favorite tool for limiting liability: ERISA.
Congress passed the Employee Retirement Income Security Act, commonly known as ERISA, in 1974 to protect employee benefits. The law is relatively vague when it comes to “welfare benefits,” and contains a broad preemption clause. The courts have filled in the blanks — including in the Aetna Health case — with distressing results for patients. Half of Americans have employer-sponsored health insurance coverage; nearly all of these plans are governed by ERISA.
“[If] you work for any business — whether it’s a corporation, an LLC, a partnership, a sole proprietorship that has employees — if the employer provides benefits, it’s governed by ERISA,” explains DeBofsky, the employee benefits lawyer, “and there is no malpractice liability when the health plan denies a life-saving or medically necessary treatment and there’s harm that results.”
The Supreme Court’s 2004 decision in Aetna Health helped cement this harsh reality. The case involved two patients who separately sued Aetna and Cigna in Texas for adverse harms that resulted from wrongful denials of treatment.
The first patient was prescribed a specific arthritis drug by his physician. Aetna refused to pay for it, demanding the patient first try other drugs — one of which caused severe internal bleeding. After the second patient had a hysterectomy, Cigna moved to discharge her after one day in the hospital despite her doctor’s recommendations. She suffered post-surgical complications and was forced to return to the hospital.
Thomas authored the court’s unanimous decision in the case, finding that the patients were not entitled to damages for harms resulting from wrongful health care treatment decisions, because ERISA preempts state law — as such, patients would only be entitled to recover reimbursement for the cost of services that were wrongfully denied.
In a concurring opinion, Justices Ruth Bader Ginsburg and Stephen Breyer agreed with the court’s decision, characterizing it as “consistent with our governing case law on ERISA’s preemptive scope.” But they also called on Congress and the court to revisit “what is an unjust and increasingly tangled ERISA regime.”
“Instead of typical malpractice damages — of your physical harm, pain and suffering, disability, disfigurement, economic losses, and so on — the only damage that the Supreme Court said could possibly be permissible would be the cost of an extra day of hospitalization for the [patient] who developed post-surgical infection, or what the cost would have been for a different medication that wouldn’t have caused internal bleeding,” says DeBofsky. “That completely kneecapped the plaintiffs’ malpractice lawyers, because the cases had no value anymore — they couldn’t get the damages that are typical of malpractice cases.”
George Parker Young was the lawyer for the patients in Aetna Health. After the decision, he says, he stopped handling cases suing health insurers on behalf of patients and doctors. “I just got out of it,” he says. “It had been 100 percent of my cases, and I wound up that docket.”
Young notes the Supreme Court’s decision was unanimous, and his clients may well have lost 8-0 if Thomas had recused himself in the case — instead of authoring the opinion.
“What I won’t do … is say, ‘Oh my gosh, if Justice Thomas had recused, I would have won that case.’ I can’t say that, and that would be disingenuous for me to say that,” he says. But looking back now at the RV loan provided by Welters, Young says, “It does stink.”
He says if he knew about the loan during the case, “I would have moved to recuse,” adding that “there’s no question this case was going to impact all national HMOs that did any kind of employer-based health care.”
Although UnitedHealth was not a party to the Aetna Health case, the company was at the time a member of two trade associations that filed an amicus brief boosting Aetna and Cigna’s arguments: the American Association of Health Care Plans (now known as AHIP) and the American Benefits Council.
Thomas did not respond to a request for comment via a Supreme Court spokesperson. Welters did not respond to a request for comment sent to his organization, the BlackIvy Group. UnitedHealth declined to comment.
At one point, the opinion from Thomas suggests that the patients whose claims were denied by Aetna and Cigna should have simply paid out of pocket for the services and medications they needed.
“Upon the denial of benefits, respondents could have paid for the treatment themselves and then sought reimbursement … or sought a preliminary injunction,” Thomas wrote.
Young rejects that argument. “That’s not true — my folks didn’t have those resources,” he says, noting that one of the patients was a blue-collar worker, and the other had just given birth and needed to spend several more days in the hospital. “The expense is not insignificant, and they don’t just have a line of credit sitting there to go pay for health care.”
Not everyone has to think that way, Young notes: “Justice Thomas, in his world, if he needed to pay for medical care, he’d just go ask Harlan Crow.”
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