What ballot title did the Arkansas AG approve for the 2013 Health Care Independence Act referendum?

Plain-English summary

After two earlier rejections, the sponsor of a referendum on the Health Care Independence Act of 2013 returned with a fuller popular name and ballot title. Attorney General Dustin McDaniel accepted the popular name as submitted. He replaced the proposed ballot title with his own more complete version and certified that substitute for petition circulation.

The certified title first explained the legal effect of the vote: a vote for the referendum would approve the act, while a vote against it would repeal the act. It then described Arkansas's alternative to traditional Medicaid expansion, under which eligible low-income adults would receive premium assistance to buy qualified private plans in a regulated marketplace.

The substitute title summarized thirteen program features. These included federal approvals, eligibility, private-plan enrollment, cost sharing, at least two qualified plans in each county, possible later inclusion of specified children and Medicaid recipients, Independence Accounts, a trust fund, federal-funding termination triggers, the act's June 30, 2017 sunset, rulemaking, and quarterly reporting.

The opinion did not endorse the health policy. It stated that certification or rejection concerned only whether the popular name and ballot title fairly described the referendum.

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Who this opinion addressed in 2013

Referendum sponsors and canvassers

The revised submission was detailed enough for the AG to exercise his substitution authority instead of rejecting it again. The opinion also supplied instructions that had to precede each petition under A.C.A. § 7-9-108.

Voters

The certified ballot title described both the immediate effect of a for-or-against vote and the main features of the private-option program. Its purpose was to let voters understand the scope and significance of the law under review.

Election officials and ballot-measure attorneys

The opinion illustrated the difference between a sufficient popular name and a ballot title that needed amendment. The popular name was accepted unchanged, while the AG substituted a longer title to cover essential facts and program mechanics.

Common questions

Q: Was the sponsor's proposed title rejected again?
A: Not entirely. The AG accepted the popular name and certified a replacement ballot title that he drafted from the revised submission and the act.

Q: What did a vote for the referendum mean?
A: Under the certified title, a vote for the measure approved the Health Care Independence Act of 2013, while a vote against the measure repealed it.

Q: How did the certified title describe the private option? A: It said eligible additional low-income adults would receive premium assistance to buy coverage through qualified private plans rather than enter the traditional Medicaid model.

Q: Did certification mean the AG supported the program? A: No. The opinion expressly separated title certification from any view about the proposal's merits.

Background and statutory framework

A.C.A. § 7-9-107 required the Attorney General to review statewide initiative and referendum titles before petitions circulated. The opinion described a ballot title as an impartial summary that gave voters a fair understanding, disclosed essential facts, and remained concise enough for the voting process. It cited Bailey v. McCuen for the essential-fact standard and Becker v. Riviere for an impartial summary.

The proposal referred to silver-level qualified plans under 42 U.S.C. §§ 18022 and 18071. After certification, A.C.A. § 7-9-108 required petition instructions for canvassers and signers, which the AG enclosed with the opinion.

Citations and references

Statutes:

• A.C.A. § 7-9-107
• A.C.A. § 7-9-108
• A.C.A. § 7-5-522
• 42 U.S.C. §§ 18022 and 18071

Cases:

• Bailey v. McCuen, 318 Ark. 277, 285, 884 S.W.2d 938, 942 (1994)
• Becker v. Riviere, 270 Ark. 219, 226, 604 S.W.2d 555, 558 (1980)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

STATE OF ARKANSAS

THE ATTORNEY GENERAL
Dustin MCDANIEL

Opinion No. 2013-054

June 11, 2013

Mr. Glenn Gallas
3267 Albert Pike
Hot Springs, Arkansas 71913

Dear Mr. Gallas:

This is in response to your request for certification, pursuant to A.C.A. § 7-9-107 (Repl. 2007), of a proposed referendum measure. You previously submitted two similar measures, which this office rejected due to your failure to summarize the substance of the legislation you wish to refer to the voters. See Ops. Att’y Gen. Nos. 2013-043 and 2013-042. You have made changes in the text of your proposal since your last submission and have now submitted the following proposed popular name and ballot title for my certification:

Popular Name

A REFERENDUM ON THE HEALTH CARE INDEPENDENCE ACT OF 2013

Ballot Title

The Federal Patient Protection and Affordable Care Act (PPACA) will significantly impact Arkansas’s Healthcare system. The 89" General Assembly enacted the Health Care Independence Act of 2013 in an attempt to mitigate the impact and alter Arkansas’ Healthcare system. The major elements addressed by the Health Care Independence Act of 2013 are the expansion of Medicaid healthcare coverage, through the creation of an alternative model that moves eligible and newly eligible individuals to a “private insurance option” for “low risk” adults and the creation of the Health Insurance Marketplace and the creation of Independence Accounts.

323 CENTER STREET, SUITE 200 * LitrLeE Rock, ARKANSAS 72201 TELEPHONE (501) 682-2007 * Fax (501) 682-8084 INTERNET WEBSITE ¢ http://www.ag.state.ar.us/

Glenn Gallas
Opinion No. 2013-043

Page 2

The expansion of Medicaid healthcare coverage includes, adults between nineteen (19) years of age and sixty-five (65) years of age with an income that is equal to or less than one hundred thirty-eight percent (138%) of the federal poverty level, including without limitation individuals who would not be eligible for Medicaid under laws and rules in effect on January 1, 2013; have been authenticated to be a United States citizen or documented qualified alien according to the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996, as existing on January 1, 2013; and are not determined to be more effectively covered through the standard Medicaid program, such as an individual who is medically frail or other individuals with exceptional medical needs for whom coverage through the Health Insurance Marketplace is determined to be impractical, overly complex, or would undermine continuity or effectiveness of care. On June 28th 2012 the United States Supreme Court decided in National Federation of Independent Business v. Sebelius, that each individual state was allowed to opt out of the Medicaid expansion.

The Health Care Independence Act of 2013 creates a Health Insurance Marketplace to offer healthcare insurance to include a “Qualified Health Plan” as mandated by the Federal Patient Protection and Affordable Care Act (PPACA). The mandated Healthcare coverage shall be achieved through a Qualified Health Plan at the “Silver Level” as defined in in [sic] 42 U.S.C. §§ 18022 and 18071, as existing on January 1, 2013, that restricts cost sharing to amounts that do not exceed Medicaid cost-sharing limitations. The Health Insurance Marketplace is a vehicle created to help individuals, families, and small businesses in Arkansas shop for and select health insurance coverage in a way that permits comparison of available Qualified Health Plans based upon price, benefits, services, and quality. Upon the receipt of necessary federal approval, during calendar year 2015 the Department of Human Services shall include and transition to the Health Insurance Marketplace for Children eligible for the ARKids First Program Act and populations under Medicaid from zero percent (0%) of the federal poverty level to seventeen percent (17%) of the federal poverty level. The Health

Glenn Gallas
Opinion No. 2013-043
Page 3

Care Independence Act of 2013 creates Independence Accounts that operate similar to a Health Savings Account or Medical Savings Account that operate similar to a health savings account or a medical savings account during the calendar year 2015.

The implementation of the Health Care Independence Act of 2013 is contingent upon the approval by the Secretary of Health & Human Services of specific waivers including without limitation approval for a comprehensive waiver under Section 1115 of the Social Security Act. If the Department of Human Services does not receive the necessary federal approvals, the program shall not be implemented. An eligible individual enrolled in the program shall affirmatively acknowledge that: The program is not a perpetual federal or state right or a guaranteed entitlement; the program is subject to cancellation upon appropriate notice; and the program is not an entitlement program.

100% of the funding for the program will be provided by the federal government from 2014 through 2016 for “newly eligible” individuals. The funding will be decreased down to 95% in 2017, 94% in 2018, 93% in 2019, and 90% afterward. This decrease in funding will increase the cost to the State of Arkansas for implementation of the Health Care Independence Act of 2013.

The Attorney General is required, pursuant to A.C.A. § 7-9-107, to certify the popular name and ballot title of all proposed initiative and referendum acts or amendments before the petitions are circulated for signature. The law provides that the Attorney General may substitute and certify a more suitable and correct popular name and ballot title, if he can do so, or if the proposed popular name and ballot title are sufficiently misleading, may reject the entire petition. Neither certification nor rejection of a popular name and ballot title reflects my view of the merits of the proposal. This Office has been given no authority to consider the merits of any measure.

In this regard, A.C.A. § 7-9-107 neither requires nor authorizes this office to make legal determinations concerning the merits of the act or amendment, or concerning the likelihood that it will accomplish its stated objective. In addition, consistent with Arkansas Supreme Court precedent, unless the measure is “clearly contrary to

Glenn Gallas
Opinion No. 2013-043
Page 4

law,”” this office will not require that a measure’s proponents acknowledge in the ballot title any possible constitutional infirmities. As part of my review, however, I may address constitutional concerns for consideration by the measure’s proponents.

Consequently, this review has been limited primarily to a determination, pursuant to the guidelines that have been set forth by the Arkansas Supreme Court, discussed below, of whether the popular name and ballot title you have submitted accurately and impartially summarize the provisions of your proposed amendment.

The purpose of my review and certification is to ensure that the popular name and ballot title honestly, intelligibly, and fairly set forth the purpose of the proposed amendment or act.”

The popular name is primarily a useful legislative device.’ It need not contain detailed information or include exceptions that might be required of a ballot title, but it must not be misleading or give partisan coloring to the merit of the proposal.* The popular name is to be considered together with the ballot title in determining the ballot title’s sufficiency.”

The ballot title must include an impartial summary of the proposed amendment or act that will give the voter a fair understanding of the issues presented.° According to the court, if information omitted from the ballot title is an “essential fact which would give the voter serious ground for reflection, it must be disclosed.”’ At the

' See Kurrus v. Priest, 342 Ark. 434, 445, 29 S.W.3d 669, 675 (2000); Donovan y, Priest, 326 Ark. 353, 359, 931 S.W.2d 119, 121 (1996); Plugge v. McCuen, 310 Ark. 654, 841 S.W.2d 139 (1992),

• See Arkansas Women’s Political Caucus v. Riviere, 283 Ark. 463, 466, 677 S.W.2d 846 (1984).
  3 Pafford vy, Hall, 217 Ark. 734, 739, 233 S.W.2d 72, 75 (1950).

4 E.g., Chaney v. Bryant, 259 Ark. 294, 297, 532 S.W.2d 741, 743 (1976). ; Moore v. Hall, 229 Ark, 411, 316 S.W.2d 207 (1958).

° May v. Daniels, 359 Ark. 100, 105, 194 S.W.3d 771, 776 (2004).
° Becker v. Riviere, 270 Ark. 219, 226, 604 S.W.2d 555, 558 (1980).

” Bailey v. McCuen, 318 Ark. 277, 285, 884 S.W.2d 938, 942 (1994),

Glenn Gallas
Opinion No. 2013-043
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same time, however, a ballot title must be brief and concise (see A.C.A. § 7-9- 107(b)); otherwise voters could run afoul of A.C.A. § 7-5-522’s five minute limit in voting booths when other voters are waiting in line.® The ballot title is not required to be perfect, nor is it reasonable to expect the title to cover or anticipate every possible legal argument the proposed measure might evoke.’ The title, however, must be free from any misleading tendency, whether by amplification, omission, or fallacy; it must not be tinged with partisan coloring.’? A ballot title must convey an intelligible idea of the scope and significance of a proposed change in the law.'! The ballot title must be intelligible, honest, and impartial.’

Applying the above precepts, it is my conclusion that the popular name you have submitted is acceptable and it is hereby certified without modification.

It is my conclusion, however, that a more suitable, complete, and correct ballot title should be substituted for the one proposed. The following is hereby certified in order to ensure that the ballot title accurately sets forth the purpose of the proposed amendment:

Ballot Title

This referendum enables the people to vote for or against The Health Care Independence Act of 2013 (the “Act’), which was enacted by the 89th General Assembly as identical Acts 1497 and 1498 of 2013. A vote “FOR” the measure will approve the Act; a vote “AGAINST” the measure will repeal the Act.

The federal Patient Protection and Affordable Care Act (PPACA) allows each of the states at its option to participate in a program, largely financed by the federal government, to expand the range of

8 Id. at 288, 884 S.W.2d at 944.
9 Id. 293, 884 S.W.2d at 946-47,
' Td. at 284, 884 S.W.2d at 942.

"' Christian Civic Action Committee y. McCuen, 318 Ark. 241, 245, 884 S.W.2d 605, 607 (1994) (internal quotations omitted).

2 Becker v. McCuen, 303 Ark. 482, 489, 798 S.W.2d 71, 74 (1990).

Glenn

Gallas

Opinion No. 2013-043

Page 6

low-income individuals who would be covered under traditional Medicaid. Instead of adopting the model proposed under the PPACA, the Act provides for these additional individuals to be provided with premium assistance to purchase coverage through qualified private plans in a regulated, competitive insurance marketplace. Under the Act, financing of the state’s expanded coverage through premium assistance will be provided at first exclusively, and thereafter primarily, by the federal government. The Act is further designed to reduce traditional Medicaid enrollment by eventually extending premium assistance to individuals who currently qualify for coverage under Medicaid.

Specifically, the Act provides as follows:

(1) Subject to all pertinent federal approvals, the Arkansas Department of Human Services (“DHS”) will establish and administer a Health Care Independence Program (the “Program”) to provide premium assistance for all adults with an income equal to or less or than 138% of the federal poverty level who (a) would not have been eligible for Medicaid under rules in effect on January 1, 2013; (b) are U.S. citizens or documented qualified aliens according to the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996, as existing on January 1, 2013; and (c) would not be more effectively covered through standard Medicaid, such as the frail or those with exceptional medical needs;

(2) In establishing the Program, DHS will apply for necessary federal waivers and submit only those Medicaid state plan amendments that are optional and therefore may be revoked by the State at its discretion;

(3) Eligible individuals may enroll in qualified health plans offered through a health insurance marketplace consisting of participating carriers that offer private insurance coverage;

(4) The Program will include cost sharing for eligible individuals comparable to that for individuals in the same income range in the private insurance market;

Glenn Gallas
Opinion No. 2013-043
Page 7

(5) All carriers participating in the health insurance marketplace will provide coverage conforming to standards defined by law;

(6) The State Insurance Department will ensure that at least two qualified health plans are offered in each county of the state;

(7) Upon receipt of required federal approval, during calendar year 2015, DHS will include within the Program (a) children eligible for benefits under the “ARKids B” Program and (b) Medicaid recipients with an income from 0% to 17% of the federal poverty level;

(8) DHS will develop a model for an Independence Accounts Program, to be implemented in 2015, that will allow non-aged, non- disabled eligible individuals earning more than 50% of the federal poverty level to purchase high-deductible insurance through accounts that operate in the manner of health savings accounts or medical savings accounts;

(9) A Health Care Independence Program Trust Fund will be created to be used by DHS to pay future obligations.

(10) The Program will terminate within 120 days following a reduction in any of the following federal medical assistance percentages: (a) 100% in 2014, 2015 or 2016; (b) 95% in 2017; (c) 94% in 2018; (d) 93% in 2019; and (e) 90% in 2020 or any year thereafter;

(11) The Program will terminate on June 30, 2017 unless it is amended or extended by the General Assembly;

(12) Subject to review by the Legislative Council, DHS and the Department of Insurance will promulgate rules for the Program, which they will administer; and

(13) DHS and the State Insurance Department will report quarterly to the Legislative Council regarding Program performance.

Pursuant to A.C.A. § 7-9-108, instructions to canvassers and signers must precede every petition, informing them of the privileges granted by the Constitution and of

Glenn Gallas
Opinion No. 2013-043
Page 8

the penalties imposed for violations of this act. Enclosed herewith, over the signature of the Attorney General, are instructions that should be incorporated in your petition prior to circulation.

Attorney General

DM/cyh

Enclosures

INSTRUCTIONS TO CANVASSERS AND SIGNERS

1. Amendment No. 7 to the Arkansas Constitution gives to the people of the State of
   Arkansas the power to propose legislation or constitutional amendments by initiative petition, and to order the referendum against any general act or any item of an appropriation bill, or measure passed by the General Assembly. The petition must be signed by eight percent (8%) of the legal voters in the case of proposed legislation, ten percent (10%) in the case of proposed constitutional amendments, and six percent (6%) in the case of a referendum. The proposed legislation or constitutional amendment must be submitted to the registered voters of the State at a regular election; referendum petitions may be referred to the people at special elections when fifteen percent (15%) of the registered voters petition for such special election. Any measure submitted to the people shall take effect and become a law when approved by a majority of the votes cast upon such measure.

2. Only registered voters may sign. Printed names, dates of birth, residences, cities or
   towns of residences, and date of signing must be given as an aid to verification. The petition should contain only the signatures of voters residing in a single county.

3. All signatures must be in the signers’ own handwriting in the presence of the
   persons circulating the petition. If a petition signer requires assistance due to disability, another person may provide the signer’s information and that person shall sign and print their name in the margin of the petition.

4. Do not attach additional sheets to this petition unless such sheets contain the full
   language of the petition. Place as many names as possible on each petition. No additional signatures may be obtained after a petition has been filed until the Secretary of State determines the sufficiency of the petition.

5. TO KNOWINGLY SIGN ANY NAME OTHER THAN YOUR OWN, TO
   KNOWINGLY SIGN YOUR NAME MORE THAN ONCE TO ANY PETITION, TO KNOWINGLY SIGN YOUR NAME WHEN YOU ARE NOT LEGALLY ENTITLED TO SIGN IT, TO KNOWINGLY PAY A PERSON ANY FORM OF COMPENSATION IN EXCHANGE FOR SIGNING A PETITION AS A PETITIONER, TO ACCEPT MONEY FOR OBTAINING SIGNATURES KNOWING THAT YOU ARE NOT INCLUDED ON THE SPONSOR’S LIST OF PAID CANVASSERS ON FILE WITH THE SECRETARY OF STATE, TO KNOWINGLY AND FALSELY MISREPRESENT THE PURPOSE AND EFFECT OF THIS PETITION FOR THE PURPOSE OF CAUSING ANYONE TO SIGN IT, OR TO KNOWINGLY MAKE A FALSE STATEMENT ON A PETITION VERIFICATION FORM SHALL CONSTITUTE A CLASS “A” MISDEMEANOR AND SUBJECT THE OFFENDER TO A FINE OF UP TO $1,000.00 AND IMPRISONMENT FOR UP TO ONE (1) YEAR.

The Attorney General is by law required to certify the sufficiency of the popular name and ballot title of all initiative or referendum petitions. This certification does not necessarily indicate the approval or disapproval of the contents thereof.

DUSTIN McDANIEL
Attorney General of the State of Arkansas

POPULAR NAME

A REFERENDUM ON THE HEALTH CARE INDEPENDENCE ACT OF 2013

BALLOT TITLE

The Federal Patient Protection and Affordable Care Act (PPACA) will significantly impact Arkansas’s Healthcare system. The 89th General Assembly enacted THE HEALTH CARE INDEPENDENCE ACT OF 2013 in an attempt to mitigate the impact and alter Arkansas’ Healthcare system. The major elements addressed by the HEALTH CARE INDEPENDENCE ACT OF 2013 are the expansion of Medicaid healthcare coverage, through the creation of an alternative model that moves eligible and newly eligible individuals to a “private insurance option” for “low risk” adults and the creation of the Health Insurance Marketplace and the creation of Independence Accounts.

The expansion of Medicaid healthcare coverage includes, adults between nineteen (19) years of age and sixty-five (65) years of age with an income that is equal to or less than one hundred thirty-eight percent (138%) of the federal poverty level, including without limitation individuals who would not be eligible for Medicaid under laws and rules in effect on January 1, 2013; have been authenticated to be a United States citizen or documented qualified alien according to the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996, as existing on January 1, 2013; and are not determined to be more effectively covered through the standard Medicaid program, such as an individual who is medically frail or other individuals with exceptional medica) needs for whom coverage through the Health Insurance Marketplace is determined to be impractical, overly complex, or would undermine continuity or effectiveness of care. On June 28th 2012 the United States Supreme Court decided in National Federation of Independent Business v. Sebelius, that each individual state was allowed to opt out of the Medicaid expansion.

THE HEALTH CARE INDEPENDENCE ACT OF 2013 creates a Health Insurance Marketplace to offer healthcare insurance to include a “Qualified Health Plan” as mandated by the Federal Patient Protection and Affordable Care Act (PPACA). The mandated Healthcare coverage shall be achieved through a Qualified Health Plan at the “Silver Level” as defined in in 42 U.S.C. §§ 18022 and 18071, as existing on January 1, 2013, that restricts cost sharing to amounts that do not exceed Medicaid cost-sharing limitations. The Health Insurance Marketplace is a vehicle created to help individuals, families, and small businesses in Arkansas shop for and select health insurance coverage in a way that permits comparison of available Qualified Health Plans based upon price, benefits, services, and quality. Upon the receipt of necessary federal approval, during calendar year 2015 the Department of Human Services shall include and transition to the Health Insurance Marketplace for Children eligible for the ARKids First Program Act and populations under Medicaid from zero percent (0%) of the federal poverty level to seventeen percent (17%) of the federal poverty level.

THE HEALTH CARE INDEPENDENCE ACT OF 2013 creates Independence Accounts that operate similar to a Health Savings Account or Medical Savings Account that operate similar to a health savings account or a medical savings account during the calendar year 2015.

The implementation of the HEALTH CARE INDEPENDENCE ACT OF 2013 is contingent upon the approval by the Secretary of Health & Human Services of specific waivers including without limitation approval for a comprehensive waiver under Section 1115 of the Social Security Act. If the Department of Human Services does not receive the necessary federal approvals, the program shall not be implemented. An eligible individual enrolled in the program shall affirmatively acknowledge that: The program is nota perpetual federal or state right or a guaranteed entitlement; the program is subject to cancellation upon appropriate notice; and the program is not an entitlement program. .

100% of the funding for the program will be provided by the federal government from 2014 through 2016 for “newly eligible “individuals. The funding will be decreased down to 95% in 2017, 94% in 2018, 93% in 2019, and 90% afterward. This decrease in funding will increase the cost to the State of Arkansas for implementation of the HEALTH CARE INDEPENDENCE ACT OF 2013.

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Stricken language would be deleted from and underlined language would be added to present law. Act 1498 of the Regular Session

State of Arkansas As Engrossed: H4/3/13 H4/6/13 H4/10/13 84/17/13 89th General Assembly B il] Regular Session, 2013 HOUSE BILL 1143

By: Representatives J. Burris, Carter, Biviano

By: Senators J. Dismang, Bookout, D. Sanders, Zrvin

For An Act To Be Entitled
AN ACT CONCERNING HEALTH INSURANCE FOR CITIZENS OF
THE STATE OF ARKANSAS; TO CREATE THE HEALTH CARE
INDEPENDENCE ACT OF 2013; TO DECLARE AN EMERGENCY;
AND FOR OTHER PURPOSES.

Subtitle
TO CREATE THE HEALTH CARE INDEPENDENCE
ACT OF 2013; AND TO DECLARE AN EMERGENCY.

WHEREAS, Arkansas has historically addressed state-specific needs to achieve personal responsibility and affordable health care for its citizens such as the ARHealthNetworks partnership between the state and small

businesses; and

WHEREAS, Arkansas has initiated nationally recognized and transformative changes in the healthcare delivery system through alignment of payment incentives, health care delivery system improvements, enhanced rural health care access, initiatives to reduce waste, fraud and abuse, policies and plan structures to encourage the proper utilization of the healthcare

system, and policies to advance disease prevention and health promotion; and WHEREAS, Arkansas 1s uniquely situated to serve as a laboratory of comprehensive and innovative healthcare reform that can reduce the state and

federal obligations to entitlement spending; and

WHEREAS, faced with the disruptive challenges from federal legislation

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As Engrossed: H4/3/13 H4/6/13 H4/10/13 $4/17/13 HB1143

and regulations,

the General Assembly asserts its responsibility for local

control and innovation to achieve health care access, improved health care

quality, reduce traditional Medicaid enrollment, remove disincentives for

work and social mobility, and required cost-containment; and

WHEREAS, the General Assembly hereby creates the Health Care

Independence Act

NOW THEREFORE,
BE IT ENACTED BY

SECTION I.

of 2013;

THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:

Arkansas Code Title 20, Chapter 77, is amended to create a

new subchapter to read as follows:

Subchapter

21 — Health Care Independence Act of 2013

20-77-2101.

Title.

This act shall be known and may be cited as the "Health Care

Independence Act

of 2013".

20-77-2102,

Legislative intent.

(a) Notwithstanding any general or specific laws to the contrary, the

Department of Human Services is to explore design options that reform the

Medicaid Program

utilizing the Health Care Independence Act of 2013 so that

it is a fiscally

sustainable, cost-effective, personally responsible, and

opportunity-driven program utilizing competitive and value-based purchasing

to:

(1) Maximize the available service options;

(2) Promote accountability, personal responsibility, and
transparency;

(3) Encourage and reward healthy outcomes and responsible choices; and

(4) Promote efficiencies that will deliver value to the
taxpayers.

(b) (1) It is the intent of the General Assembly that the State of

Arkansas through

the Department of Human Services shall utilize a private

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As Engrossed: H4/3/13 H4/6/13 H4/10/13 S84/17/13 HB1143

insurance option for “low-risk” adults,

(2) The Health Care Independence Act of 2013 shall ensure that:

(A) Private health care options increase and vovernment-

operated programs such as Medicaid decrease; and

(B) Decisions about the design, operation and

implementation of this option, including cost, remain within the purview of

the State of Arkansas and not with Washington, D.C.

20-77-2103. Purpose.

(a) The purpose of this subchapter is to:

(1) Improve access to quality health care;

(2) Attract insurance carriers and enhance competition in the

Arkansas insurance marketplace;

(3) Promote individually-owned health insurance;

(4) Strengthen personal responsibility through cost-sharing;

(5) Improve continuity of coverage;

(6) Reduce the size of the state-administered Medtcatd program;

(7) Encourage appropriate care, including early intervention,

prevention, and wellness;

(8) Increase quality and delivery system efficiencies;

(9) Facilitate Arkansas’s continued payment innovation, delivery

system reform, and market-driven improvements;

(10) Discourage over-utilization; and

(11) Reduce waste, fraud, and abuse,

(b) The State of Arkansas shall take an integrated and market-based

approach to covering low-income Arkansans through offering new coverage

opportunities, stimulating market competition, and offering alternatives to

the existing Medicaid program,

20-77-2104, Definitions.

As_ used in this subchapter:

(1) "Carrier" means a private entity certifted by the State

Insurance Department and offering plans through the Health Insurance

Marketplace;
(2) "Cost sharing" means the portion of the cost of a covered

medical service that must be paid by or on behalf of eligible individuals,

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As Engrossed: H4/3/13 H4/6/13 H4/10/13 84/17/13 HB1143

consisting of copayments or coinsurance but not deductibles;

(3) "Eligible individuals" means individuals who:

(A) Are adults between nineteen (19) years of age and

Sixty-five (65) years of age with an income that 1s egual to or less than one

hundred thirty-eight percent (138%) of the federal poverty level, including

without limitation individuals who would not be eligible for Medicaid under

laws and rules in effect on January 1, 2013;

(B) Have been authenticated to be a United States citizen

or documented qualified alien according to the federal Personal

Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. No.

104-193, as existing on January 1, 2013; and

(C) Are not determined to be more effectively covered

through the standard Medicaid program, such as an individual who is

medically frail or other individuals with exceptional medical needs for whom

coverage through the Health Insurance Marketplace is determined to be

impractical, overly complex, or would undermine continuity or effectiveness

of care;
(4) "Healthcare coverage" means healthcare benefits as defined

by certification or rules, or both, promulgated by the State Insurance

Department for the Qualified Health Plans or available on the marketplace;

(5) "Health Insurance Marketplace" means the vehicle created to

help individuals, families, and small businesses in Arkansas shop for and

select health insurance coverage in a way that permits comparison of

avatlable Qualified Health Plan based upon price, benefits, services, and

guality, regardless of the governance structure of the marketplace;

(6) "Premium" means _a charge that must be paid as a condition of

enrolling in health care coverage;

(7) "Program" means the Health Care Independence Program

established by this subchapter;

(8) "Qualified Health Plan" means a State Insurance Department

certified indtvidual health insurance plan offered by a carrier through the

Health Insurance Marketplace; and

(9) “Independence account” mean individual financing structures

that operate similar to a health savings account or a medical savings

account.

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As Engrossed: H4/3/13 H4/6/13 H4/10/13 84/17/13 HB1143

20-77-2105. Administration of the Health Care Independence Program.

(a) The Department of Human Services shall:

(1) Create and administer the Health Care Independence Program;

and

(2) (A) Submit and apply for any:

(1) Federal waivers necessary to Implement the program in

a manner consistent with this subchapter, including without limitation

approval for a comprehensive waiver under Section 1115 of the Social Security Act, 42 U.S.C. § 1315; and (11) (a) Medicaid State Plan Amendments necessary to

implement the program in a manner consistent with this subchapter.

(b) The Department of Human Services shall submit

only those Medicaid State Plan Amendments under subdivision (a) (2) (A) (ii) (a)

of this section that are optional and therefore may be revoked by the state

at its discretion.

(B) (i) As part of its actions under subdivision (a) (2) (A)

of this section, the Department of Human Services shall confirm that

employers shall not be subject to the penalties, including without limitation

an assessable payment, under Section 1513 of Pub. IL. No. 111-148, as existing

on January 1, 2013, concerning shared responsibility, for employees who are

eligible individuals 1f the employees:

(a) Are enrolled in the program; and
(b) Enroll in a Qualified Health Plan through

the Health Insurance Marketplace.

(1i) If the Department of Human Services its unable

to confirm provisions under subdivision (a) (2)(B)(i) of this section, the

program shall not be implemented.

(b) (1) Implementation of the program is conditioned upon the receipt

of necessary federal approvals.

(2) If the Department of Human Services does not receive the

necessary federal approvals, the program shall not be itmplemented.

(c) The program shall include premium assistance for eligible

individuals to enable their enrollment in a Qualifted Health Plan through the

Health Insurance Marketplace.

(d)(1) The Department of Human Services is specifically authorized to

pay premiums and supplemental cost-sharing subsidies directly to the

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As Engrossed: H4/3/13 H4/6/13 H4/10/13 84/17/13 HB1143

Qualified Health Plans for enrolled eligible individuals.

(2) The intent of the payments under subdivision (d)(1) of this

section is to tncrease participation and competition in the health insurance

market, intensify price pressures, and reduce costs for both publicly and

privately funded health care.

(e) To the extent allowable by law:

(1) The Department of Human Services shall pursue strategies

that promote insurance coverage of children in their parents’ or caregivers’

pian, including children eligible for the ARKids First Program Act, § 20-7/7-

1101 et seg., commonly known as the "ARKids B program"; and

(2) Upon the receipt of necessary federal approval, during

calendar year 2015 the Department of Human Services shall include and

transition to the Health Insurance Marketplace:
(A) Children eligible for the ARKids First Program Act, § 20-77-1101 et seq.; and

(B) Populations under Medicaid from zero percent (0%) of

the federal poverty level to seventeen percent (17%) of the federal poverty

level.

(3) The Department of Human Services shall develop and implement

a strategy to inform Medicaid recipient populations whose needs would be

reduced or better served through participation in the Health Insurance

Marketplace.

(f) The program shall include allowable cost sharing for eligible

individuals that is comparable to that for individuals in the same income

range in the private insurance market_and is structured to enhance eligible

individuals’ investment in their health care purchasing decisions.

(2)(1) The State Insurance Department and Department of Human Services

shall administer and promulgate rules to administer the program authorized

under this subchapter.

(2) _No less than thirty (30) days before the State Insurance

Department and Department of Human Services begin promulgating a rule under

this subchapter, the proposed rule shall be presented to the Legislative

Council.
(h) The program authorized under this subchapter shall terminate

within one hundred twenty (120) days after a reduction in any of the

following federal medical assistance percentages:

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As Engrossed: H4/3/13 H4/6/13 H4/10/13 $4/17/13 HB1143

(1) One hundred percent (1007) in 2014, 2015,

or 2016;
(2) Ninety-five percent (95%) in 2017;

(3) Ninety-four percent (94%) in 2018;
(4) Ninety-three percent (9327) in 2019; and
(5) Ninety percent (90%) in 2020 or any year after 2020.
(1) An eligtble individual enrolled in the program shall affirmatively

acknowledge that:

(1) The program is not a perpetual federal or state right ora

guaranteed entitlement;

(2) The program is subject to cancellation upon appropriate

notice; and

(3) he program is not an entitlement program.

(iJ (1) The Department of Human Services shall develop a model and seek

from the Center for Medicare and Medicatd Services all necessary waivers and

approvals to allow non-aged, non-disabled program-eligible participants to

enroll in a program that will create and utitlize Independence Accounts that

operate similar to a Health Savings Account or Medical Savings Account during

the calendar year 2013.

(2) The Independence Accounts shall:

(4) Allow a participant to purchase cost-effective high-

deductible health insurance; and

(B) Promote jndependence and self-sufftciency.

(3) The state shall implement cost sharing and co-pays and, as a

condition of participation, earnings shall exceed fifty percent (50%) of the

federal poverty level.

(4) Participants may receive rewards based on healthy living and

self-sufficiency.

(5) (A) At the end of each fiscal year, if there are funds

remaining tn the account, a mafority of the state’s contribution witll remain

in the participant’s control as a positive tncentive for the responsible use

of the health care system and personal responstbility of health maintenance.

(B) Uses of the funds may include without limitation

rolling the funds into a private sector health savings account for the

participant according to rules promulgated by the Department of Human

Services.

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As Engrossed: H4/3/13 H4/6/13 H4/10/13 $4/17/13 HB1143

(6) The Department of Human Services shall promulgate rules to

implement this subsection (j).

(k) (1) State obligations for uncompensated care shall be projected,

tracked, and reported to identify potential incremental future decreases.

(2) The Department of Human Services shall recommend appropriate

adjustments to the General Assembly.

(3) Adjustments shall be made by the General Assembly as

appropriate.

(1) The Department of Human Services shall track the Hospital

Assessment Fee as defined in § 20-77-1902 and report to the General Assembly

subsequent decreases based upon reduced uncompensated care.

(m) On a quarterly basis, the Department of Human Services and the

State Insurance Department shall report to the Legislative Council or to the

Joint Budget Committee if the General Assembly is in session, available

information regarding:

(1) Program enrollment;

(2) Patient experience;

(3). EFconomic impact including enrollment distribution;

(4) Carrier competition; and

(5) Avoided uncompensated care.

20-77-2106. Standards of healthcare coverage through the Health

Insurance Marketplace.

(a) Healthcare coverage shall be achieved through a qualified health plan at the stlver level as provided in 42 U.S.C. §§ 18022 and 18071, as

existing on January 1, 2013, that restricts cost sharing to amounts that do

not exceed Medicaid cost-sharing limitations.

(b) (1) All participating carriers in the Health Insurance Marketplace

Shall offer healthcare coverage conforming to the requirements of this

subchapter.
(2) A participating carrfer in the Health Insurance Marketplace

shall maintain a medical loss ratio of at least eighty percent (80Z) for an

individual and small group market policy and at least eighty-five percent

(85%) for a Jarge group market policy ag required under Pub. L. No. 111-148,

as exitsting on January 1, 2013.

(c) To assure price competitive choice among healthcare coverage

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As Engrossed: H4/3/13 H4/6/13 H4/10/13 84/17/13 HB1143

options, the State Insurance Department shall assure that at least two (2)

gualified health plans are offered in each county in the state.

(d) Health insurance carriers offering health care coverage for

program eligible individuals shall participate in Arkansas Payment

Improvement Initiatives Including:

(1) Assignment of primary care clinician;

(2) Support for patient-centered medical home; and

(3) Access of clinical performance data for providers.

(e) On or before July 1, 2013, the State Insurance Department shall

implement through certification requirements, rule, or both the applicable

provistons of this subchapter.

20-77-2107. Enrollment.

(a) The General Assembly shall assure that _a mechanism within the

Health Insurance Marketplace is established and operated to facilitate

enrollment of eligible individuals.

(b) The enrollment mechanism shall include an automatic verification

system to guard against waste, fraud. and abuse in the program.

20-77-2108. Effective date.
This subchapter shall be itn effect until June 30, 2017, unless amended

or extended by the General Assembly.

SECTION 2, Arkansas Code Title 19, Chapter 5, Subchapter 11, is amended to add an additional section to read as follows:

19-5-1140, Health Care Independence Program Trust Fund,

(a) There is created on the books of the Treasurer of State, the

Auditor of State, and the Chief Fiscal Officer of the State a trust fund to

be _ known as the “Health Care Independence Program Trust Fund”,

(b) (1) The Health Care Independence Program Trust Fund may consist of

moneys _ saved and accrued under the Health Care Independence Act of 2013, §

20-77-2101 et seq., including without limitation:

(A) Increases in premium tax collections;

(B) Reductions in uncompensated care; and

(C) Other spending reductions resulting from the Health
Care Independence Act of 2013, 20-77-2101 et seq.

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As Engrossed: H4/3/13 H4/6/13 H4/10/13 $4/17/13 HB1143

(2) The fund shall also consist of other revenues and funds

authorized by law.

(c) The fund may be used by the Department of Human Services to pay

for future obligations under the Health Care Independence Program created by the Health Care Independence Act of 2013, § 20-77-2101 et seq.

SECTION 3. NOT TO BE CODIFIED. (a) The implementation of this act is

suspended until an appropriation for the tmplementation of this act 1s passed

by a three-fourths vote of both houses of the Etghty-Ninth General Assembly.

(b) If an appropriation for the implementation of this act is

not passed by the EFighty-Ninth General Assembly, this act is void.

SECTION 4. NOT TO BE CODIFIED. The enactment and adoption of this act

Shall supersede Section 21 of HB1219 of the EFighty-Ninth General Assembly, if

Section 21 of HB1219 of the Eighty-Ninth General Assembly is enacted and

adopted,

SECTION 5. EMERGENCY CLAUSE. It is found and determined by the

General Assembly of the State of Arkansas that the Health Care Independence

Program reguires private insurance companies to create, present to the

Department of Human Services for approval, implement, and market _a new kind

of insurance policy; and that the private insurance companies need certainty

about the law creating the Health Care Independence Program before fully

investing time, funds, personnel, and other resources to the development of

the new insurance policies. Therefore, an emergency is declared to exist,

and this act being immediately necessary for the preservation of the public

peace, health, and safety shall become effective on:

(1) The date of its approval by the Governor;

(2) If the bill is neither approved nor vetoed by the Governor,

the expiration of the period of time during which the Governor may veto the

bill; or
(3) If the bill is vetoed by the Governor and the veto is

overridden, the date the last house overrides the veto.

/s/J. Burris
APPROVED: 04/23/2013

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