Dem Governors Opposing States’ Challenge to Federal Health Care Law
June 25, 2010 – A small group of Democratic governors wants to file a legal brief in favor of the recently enacted federal health care overhaul despite representing states challenging the legality of the federal effort.
The governors of Michigan, Colorado, Washington and Pennsylvania represent four of the 23 states whose attorneys general filed legal challenges to the federal health care overhaul President Barack Obama earlier cited as his “top” domestic priority. The attorneys general in each of the states the four governors represent are Republicans, who joined the legal challenge officially filed by Florida Attorney General Bill McCollum in March. The governors want to argue in favor of the federal health care law.
“The health care reform legislation passed by the U.S. House of Representatives last night clearly violates the U.S. Constitution and infringes on each state’s sovereignty,” McCollum said when announcing the legal challenge in March. “On behalf of the State of Florida and of the attorneys general from South Carolina, Nebraska, Texas, Utah, Pennsylvania, Washington, North Dakota, South Dakota and Alabama, if the President signs this bill into law, we will file a lawsuit to protect the rights and the interests of American citizens.”
The $938 billion health care package that largely begins to take effect in 2013 requires qualifying individuals without health insurance to purchase it or pay an annual $750 fine – unless the individual is a member of certain religious organizations, such as various Amish sects or the Church of Christ Science. It expands federal Medicaid health insurance coverage for the poor to people earning up to 133 percent of the federal poverty level – currently $10,830 for individuals and $22,050 for families with four members, and provides federal subsidies for qualifying individuals and families to help pay for health insurance coverage.
The legislation also creates health insurance exchanges for U.S. citizens to purchase affordable health insurance coverage with federal subsidies available for people earning up to 400 percent of the federal poverty level. Federal lawmakers say the health insurance mandate and creation of health insurance exchanges should help the estimated 31 million Americans currently lacking health insurance coverage to obtain it and force those who currently choose not to purchase health insurance to buy it.
The estimated cost of the health care reform plan – $938 billion over 10 years – is to be paid through increased taxes on individuals reporting more than $200,000 and couples reporting more than $250,000 in annual income. Taxes also will be levied on so-called “Cadillac” health insurance plans provided by employers and costing $10,200 annually for individuals and $27,500 for families, and tanning salons using ultraviolet lamps would have to pay a 10 percent excise tax. Capital gains taxes also will go up, in addition to several other taxes.
CURE Auto Insurance Offering Coverage in Pennsylvania
Dec. 4, 2008 – A nonprofit insurer based in Princeton, New Jersey, is offering low-rate auto insurance for Pennsylvania’s nearly 9 million drivers.
CURE Auto Insurance has been providing auto insurance coverage in New Jersey for 19 years and has begun offering coverage in Pennsylvania with a business model averse to what company officials call “discriminatory” rate-pricing practices. CURE Auto Insurance officials say it’s downright discriminatory for insurers to set auto insurance rates based on drivers’ education, occupations and credit scores.
“It started with credit scores for auto insurance, then over the past five to seven years has proliferated into homeownership, high-paying occupation, and now educational attainment,” Eric Poe, CURE’s chief operating officer, told the Philadelphia Enquirer.
Pennsylvania insurance officials allow auto insurance companies to weigh applicants’ occupations, levels of education and credit ratings but have not responded to arguments against using such personal information when setting auto insurance rates. The state’s Unfair Insurance Practices Act prohibits discrimination based on race, religion, nationality, ethnic group, age, sex, occupation, place of residence or marital status when deciding whether to accept or reject someone for insurance coverage.
State Deputy Insurance Commissioner Randy Rohrbaugh told the Philadelphia Enquirer CURE Auto Insurance’s opposition to such pricing tactics is an innovative marketing strategy with an obvious appeal for many consumers.
But Poe says it’s more than just a marketing scheme for the auto insurance company. He hopes CURE’s expansion into Pennsylvania will help lead to legislation banning insurers from considering personal factors other than those directly related to driving when in determining auto insurance coverage eligibility and rates.
“We have already met with a key legislator who has already drafted a form of that legislation,” Poe told the Philadelphia Enquirer.
CURE Auto Insurance officials primarily weigh driving history and location when establishing auto insurance coverage eligibility and rates. The company provides auto insurance coverage for 40,000 vehicles in New Jersey and has about a 1 percent share of the state’s auto insurance market.
Because all drivers must have active auto insurance coverage or face substantial penalties if caught driving without it, CURE Auto Insurance officials say its unfair and “socioeconomically” discriminatory to charge higher rates to people who didn’t go to college or don’t have high-paying jobs. Poe claims Pennsylvania law enables auto insurance companies to discriminate against consumers and cited the common practice of charging higher rates for older drivers and very young drivers as an example of state-enabled auto insurance discrimination.