What: All Issues : Making Government Work for Everyone, Not Just the Rich or Powerful : Insuring Government Has Adequate Financing to Function : Fair Minimum Wage Act of 2007 (H.R. 2), Sen. John Ensign (R-Nev.) amendment to allow individuals to use pre-tax funds from Health Savings Accounts to purchase high-deductible health insurance policies/Motion to waive the Budget Act (2007 senate Roll Call 26)
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Fair Minimum Wage Act of 2007 (H.R. 2), Sen. John Ensign (R-Nev.) amendment to allow individuals to use pre-tax funds from Health Savings Accounts to purchase high-deductible health insurance policies/Motion to waive the Budget Act
senate Roll Call 26     Jan 25, 2007
Progressive Position:
Nay
Progressive Result:
Win

This vote was on an amendment proposed by Sen. John Ensign (R-Nev.) to a bill to raise the minimum wage to $7.25 over the next two years. Ensign's amendment would have allowed individuals and families to use the pre-tax money they put into federally backed Health Savings Accounts (HSAs) to pay the premiums of high-deductible health insurance policies.

Ensign said his plan would "make it easier for people to get health care coverage."

"Our health care system does not work to keep costs down and quality up because the people who actually receive health care services are not responsible for paying for the services," Ensign explained. "The vast majority of people receive health care through their employer and have low-deductible policies. This provides no incentive to shop for better prices or high quality of care. If there was such an incentive, most people would shop for better prices and better quality."

Sen. Debbie Stabenow (D-Mich.) opposed Ensign's plan on the grounds that it would create "a race to the bottom." She said that the tax revenue lost would cost the federal government $8 billion with "no good evidence that HSAs are successful at expanding coverage or controlling costs."

The crux of the issue for Stabenow and others is that by providing an incentive for healthy individuals who don't consume much in the way of healthcare services to leave full coverage, low-deductible plans for high-deductible plans, health insurance costs go up for everyone else.

"They make health care coverage less affordable for those who really need it, encouraging healthy people to leave comprehensive health care and go to these kinds of high-deductible plans," Stabenow said. Such high-deductible plans have out-of-pocket costs of at least $1,000 a year before the insurance company starts paying for medical bills.

"We also know that someone who has a sick child, a disabled child, someone who has high health indicators, health risks, somebody who is a baby boomer or older may not be able choose to have a high-risk policy because they know they are going to need their health insurance, they are going to need comprehensive health care," Stabenow said.

Because Ensign's amendment amounts to an $8 billion tax cut, it was vulnerable to a parliamentary procedure known as a point of order. Under rules put in place by the 1974 Congressional Budget Act, unless a tax break or spending increase is offset by spending cuts or revenue increases elsewhere in the federal budget, the Budget Act has to be waived. On those grounds, Stabenow raised a point of order against Ensign's amendment. By law, a three-fifths majority of the whole Senate (60 votes) is required to waive the Budget Act.

By a vote of 47-46, the Senate rejected Ensign's amendment by failing to waive the Budget Act. Republicans unanimously supported Ensign, while all but one Democrat voted against it. Thus, legislation to raise the minimum wage went forward without an amendment that would have allowed individuals to use pre-tax money from Health Savings Accounts to pay premiums for high-deductible health insurance plans.

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