Monthly Archives: October 2010

Attorney General Ken Cuccinelli, R-VA, is fighting implementation of HCR in Virginia (using Virginia taxpayer money) based on two semantic points:

1. The commerce clause of the U.S. Constitution allows Congress to regulate “activities that substantially affect interstate commerce.” Cuccinelli is arguing that under this clause, the U.S. cannot require individuals to purchase insurance or pay a fine for not doing so because not purchasing insurance is not “activity,” rather, he says, it is “inactivity,” non-participation in health care commerce.
2. The Constitution gives Congress broad powers of taxation, and the fine for not purchasing health insurance would be collected when taxes are filed. Cuccinelli argues that the fine does not qualify as a “tax,” and is rather a “penalty” not covered by the powers of taxation.

Regarding the first argument, nobody chooses not to participate in health care. When the car stops spinning and flipping over and they pull you out of the wreck unconscious, you don’t have a card in your wallet that says, “I participate in health care. Please take me to the hospital.” There is no alternative to taking you to the hospital. If you put a card in your wallet that says “I chose not to participate in health care. Let me bleed to death here on the road,” the responders will still take you to the hospital. They are mandated to care for you, and they don’t have time to check your wallet. They are checking your vital signs and tying you to a rigid transport device in case your neck is broken. You will go to the hospital. If you have insurance, your insurance pays. If you don’t have insurance, everyone else pays for you in the form of higher premiums and/or tax-supported services. Everyone is in the health care market because no one can be turned away from an emergency room. Refusal or neglect to purchase insurance in this case is an active choice to let everyone else bear the cost when you need care.

Regarding the second argument, in Virginia we have a $500.00 uninsured motorist fee. If you go to register a car and you do not have insurance, you pay that fee. An uninsured motorist gets nothing for the $500.00. It is not a tax. It is a pure penalty for not purchasing insurance. The fee is put into a fund that is parceled out to insurance companies to reimburse them for their losses due to uninsured motorists interacting with their paying subscribers. So in Virginia, you pay a penalty for not purchasing the required insurance, you get no insurance for the fee, and the fee goes to subsidize the insurance that other residents have purchased.

In view of this Virginia requirement, it appears that Cuccinelli’s argument is political as well as semantic, since he has raised no objection to the Virginia statute. Virginia solicitor general Duncan Getchell told the court that by requiring individuals to purchase a commercial product, the U.S. government was exercising authority that is “unprecedented, unlimited, and unsupportable in any serious regime of delegated, enumerated powers.” I take issue with the “unprecedented,” because Virginia has a precedent. One well-documented requirement to meet a defined need does not qualify as “unlimited,” and since the need is defined and documented, it is apparently not “unsupportable.”

The Bristol Herald Courier reported today that Virginia U.S. District Judge Henry Hudson will rule by the end of the year on the constitutionality of the new health care reform law. The suit was brought by Virginia State Attorney General Ken Cuccinelli, using Virginia taxpayer money. It alleges that the HCR provision requiring individuals to purchase health insurance is not a proper exercise of the government’s authority.

In the motor vehicle code in Virginia, there is a provision that corresponds to the HCR requirement to purchase. Virginia requires people who register a vehicle to have insurance or pay an uninsured motorist fee to help pay for damage done by people without insurance. This is the same motivation for the requirement to purchase that is included in HCR, since everyone at some time needs medical care, and forcing the cost of your care on other people while keeping your money in your pocket is just not nice.

If Virginia’s objection to requirement to purchase is upheld, then in order to have health care in the United States, we will have to fund it with tax dollars. The suit recognizes that the federal government has the power to levy taxes. It follows that if health care reform had come to us with a tax-payer funded public option or with single payer, apparently there would have been no objection from Virginia. However, those of us with good notes or sufficient memory of the last couple of years know that Republicans wanted people to purchase insurance from private insurers.

For reference, here from the Virginia Division of Motor Vehicles is information on the Uninsured Motorist Fee. Note that it does not raise revenue for the state to use. It sustains a fund that is paid out to insurers, but the citizen who pays the money has no protection. This fee serves the same purpose as the HCR requirement to purchase, but carries no benefit for citizen who pays:

Uninsured Motor Vehicle Fee — information for citizens:

The Virginia Uninsured Motor Vehicle (UMV) fee allows a motor vehicle owner to register an uninsured motor vehicle. At the time of registration, the motor vehicle owner must certify whether the vehicle is insured or uninsured.

If the vehicle is uninsured, the motor vehicle owner is required to pay to DMV a $500 uninsured motor vehicle fee in addition to normal registration fees. Payment of the $500 fee does not provide the motorist with any insurance coverage. If involved in an accident, the uninsured motorist remains personally liable. This fee is valid for twelve months but may be prorated for a shorter amount of time.

Motor vehicle owners who falsely certify that they have insurance and are found by DMV to be uninsured face stiff penalties. In addition to facing suspension of all driver and registration privileges, compliance includes payment of a $500 statutory fee, a $85 reinstatement fee and filing proof of insurance for three years. During the three-year period, insurance companies cooperate with DMV by providing notification if a policy is canceled. This requirement to maintain proof of insurance enables DMV to ensure that these motor vehicle owners maintain liability insurance on their registered vehicles.

This information is posted on the same website for insurers, and describes how the money is held and dispersed:

Uninsured Motor Vehicle Fee — information for insurers:

Every person registering an uninsured motor vehicle shall pay a fee of $500 at the time of registration. Payment of this fee allows a motor vehicle owner to operate an uninsured motor vehicle. Payment of this fee does not provide the motorist with any insurance coverage. If involved in an accident, the uninsured motorist remains personally liable. The fee is valid for twelve months but may be prorated for the unexpired portion of the registration period.

Uninsured Motorists Fund
As provided for by Motor Vehicle Code 46.2-710, all revenue collected by DMV as a result of registering an uninsured vehicle is paid into the state treasury and held in a special fund known as the Uninsured Motorists Fund. The purpose of the Fund is to reduce the cost of uninsured motorist insurance coverage. Moneys are distributed annually from the Fund among the insurers writing motor vehicle bodily injury and property damage liability insurance on vehicles registered in Virginia. Moneys are distributed in proportion that each insurer’s premium income for the basic uninsured motorists limits coverage bears to the total premium income for basic uninsured motorists coverage written in Virginia during the preceding year.