PO News

February 21, 2014

CAN SECTIONS REPEALING OR MODIFYING THE PRIVATE OPTION BE ADDED TO AN APPROPRIATION BILL DURING A FISCAL YEAR?

By David Ferguson

ISSUE I:   There is a notion going around that during a Fiscal Session an appropriation bill cannot include non-appropriation sections.  A recent blog post even insinuated that special language concerning the Private Option might be challenged because the Fiscal Session is supposed to be about budgets only.  The notion is clearly wrong.

I want to clear up this issue before Private Option proponents start using this mistaken notion as a reason not to consider one of several proposals being circulated by opponents to the Private Option.

1.  The Arkansas Constitution does not say the Fiscal Session is supposed to be strictly about budgets.  Article 5, Sec 5 of the Arkansas Constitution refers to “appropriation bills”.  (It also allows bills that do not deal with appropriating money if you go through more hoops.) 2.  The words “appropriation bills” in Article 5, Sec. 5 do not prohibit the inclusion of substantive law in the bill.  When the section was added to the Arkansas Constitution there was a long history of substantive law being included in appropriation bills.  The General Assembly wrote those words knowing this practice. 3.  The Arkansas Supreme Court has recognized the practice of including substantive law in appropriation acts.  A 1989 appropriation act abolished an agency and transferred its duties to the Arkansas Highway and Transportation Department.  In Arkansas Motor Carriers Ass’n, Inc. v. Pritchett, 798 S.W.2d 918, 303 Ark. 620 (Ark., 1990), the Arkansas Supreme Court said, “The Constitution does not prohibit the addition of substantive provisions establishing powers and duties for AHC and AHTD together with appropriations, since all relate to but one subject, the operations of AHC and AHTD.” 4.  There are many examples of appropriation bills and acts that include sections to add new substantive law or to significantly amend existing law.  It is worth noting that a version of the Health Care Independence Act of 2013, was put into the appropriation for DHS – Medical Services and was passed.  Strategy changed during the 2013 session and two other bills were used to pass the Private Option.  The two bills were not identical to the sections in the appropriation act, and therefore each included a section saying that the version in the appropriation bill should be disregarded. 5.  Fiscal Session bills and acts include substantive law.  The Special Language Subcommittee for the Joint Budget Committee would not have much to do if that was not true.  Below are some Fiscal Session examples of appropriation bills from all three Fiscal Session that specifically amend the Arkansas Code: A. Act 293 of Fiscal Session 2010 includes Sec 32, concerning isolated school district funding. B.  Act 283 of Fiscal Session 2012 includes Sec 10, concerning fees. C.  HB1149 of Fiscal Session 2014 includes Sec 81 concerning state employee salaries.

SUMMARY:  It does not violate the Arkansas Constitution to include substantive law in “appropriation bills.”  It is permissible to include substantive law in appropriation bills in Fiscal Sessions, since the Article 5, Sec 5 of the Arkansas Constitution allows introduction of “appropriation bills”, and does not include any provisions restricting substantive law in appropriation bills.

ISSUE II:  There is another notion going around that special language in an appropriation bill is only good for one (1) year.  A review of the discussion above clearly shows this notion to also be wrong.

SUMMARY:  Some special language sections are drafted to be effective for a year, and some sections are drafted as a permanent change to law.  Both are consistent with Arkansas law.

About the Author:  David Ferguson currently serves as the Director for Governmental Affairs for Conduit for Action, an Arkansas non-profit organization.  As an attorney, David spent thirty-two years of his career with the Bureau of Legislative Research (BLR), drafting bills and laws for Arkansas legislators.  During his last six years with BLR, he served as BLR director.  David retired from BLR in July 2012 and has been with CFA since December 2013.

February 18, 2014

ASK NOT “FOR WHOM THE ‘BELL’ TOLLS?”  IT TOLLS FOR JOHN BURRIS

(with Disguised Support)

HB 1150 was amended to add sections concerning the Private Option. (Identical amendments await Senate approval for SB111) Rep John Burris’ amendment includes a tough sounding trigger for termination of the Private Option.  Rep Nate Bell’s amendment seeks to stop DHS from spending funds to advertise the Private Option. 

Upon close reading we find the restrictive language in the amendments is designed to sound tough but to be ineffective. The restrictions are the legislative equivalent of a ‘head fake.’ Together the sections impose a false trigger for termination and do not repress enrollment.  (Instead of restrictions we get expanded services and speeding implementation.)

SECTION 17 – NEW “PRIVATE OPTION” TRIGGER DESIGNED TO BE INEFFECTIVE

New Section 17 of HB1150, as engrossed 2/13/14 and Section 17 in proposed Senate Amendment S1 to SB111 are identical.  This amendment proposed by Representative Burris seeks federal approval for Waivers or Medicaid State Plan amendments which 1) grant additional services[i] to the able-bodied, non-aged, nondisabled enrollees and 2) speed up the date[ii] for implementation of Health Savings Accounts.[iii]

The language has some tough talk as well – stating the “Private Option”[iv] will terminate February 1, 2015 if the federal government does not approve these newly requested waivers/ state plan changes….

But, keep reading…you learn under its subsection (e) that even if the federal government fails to give the approvals, DHS could restart the program after five months[v], and none of the restrictions of Section 17 apply.  Since the trigger is only effective for five months, it is doubtful it would even be allowed.

Track with us the process and trajectory of the “Private Option” (PO), to date:

• Due to DHS being given wide latitude under the amendment to come up with plans acceptable to the federal government, it is unlikely a DHS submitted plan would trigger termination.
• Even if federal approval was not received, the trigger in Section 17 is only TEMPORARY.  Subsection (e) states: “This section expires on June 30, 2015.” (Note:  It could have easily not included an ending date and been made permanent.)
• On July 1, 2015, once Section 17 is no longer effective, the state still has the HCIA, which authorizes the establishment of the Private Option under the original terms.[vi]
• Since Section 17 is only temporary, DHS could re-submit the PO to the feds in time to have the program restarted by July 1, 2015. (Yes, an appropriation would still be necessary, as before.)
• Regardless of its tough talk, Section 17 is timed to maximize arguments against pulling triggers.  The next General Assembly will be in session on the trigger date.  From the “hue and cry” today (after only 6 weeks of Medicaid expansion), below are predictable arguments against pulling triggers:
  • “The plan can be revived in five months—why penalize enrollees with a five month gap in services.”
  • “Pulling the trigger on Feb 1 will pull the rug out from under people who relied on the program and have been enrolled only for a month (note Burris’ actions below).”[vii]
  • “The feds didn’t approve all but we got most (or some) of them, so let’s not forfeit the program.”

This is not the first time in the short history of the “Private Option” that there was tough sounding talk by its proponents about ending the PO on “our terms” with “triggers” that fall short of reality. [viii]

SECTION 16 — ADVERTISING RESTRICTION IS ONLY TEMPORARY…AS ENROLLMENT EXPANDS

Representative Nate Bell proposed amendments to various bills to prohibit various state agencies from expending funds to promote the Private Option (Medicaid Expansion in Arkansas). The language for the Department of Human Services is new Section 16 of HB1150, as engrossed 2/13/14 and Section 16 in proposed Senate Amendment S1 to SB111.  The language has already been criticized as being minimally effective because private entities can step in and continue the effort to advertise the program.

There are another couple of aspect of the language that may have been overlooked.

• The advertising restriction only applies for one year (July 1, 2014 through June 30, 2015).  Two questions:
  • Why is it temporary?  It could have been proposed as a permanent restriction; and
  • Why wait until July 1 for it to go into effect? The restriction could have been proposed to take effect as soon as the bill is signed into law.

In addition to the argument that the Bell amendment is ineffective and a weak attempt to repress enrollment, one only has to examine the actual HCI Act to see that under its own terms (unaffected by this amendment) it will add an estimated 100,000 new enrollees in 2015[ix], all while ACA§20-77-2405(3) directs DHS to simultaneously develop and implement strategies to inform Medicaid recipients that the programs under HCIA may better service their needs.

In conclusion, the more quickly the proponents of the Private Option increase enrollment and benefits, the less likely it is that Arkansas will ever reform Medicaid to insure it survives for those in need.  It is the considered opinion of Conduit for Action that these amendments (cloaked with a veneer of “tough talk, triggers, and reduced enrollment”) simply and intentionally speed the implementation and expansion of free services to Arkansans who are “able-bodied,” non-aged, nondisabled, at great risk to Arkansas’ vulnerable and fra