Follow the Money Report: Selected 2018 Arkansas Republican Primaries

Have you ever wondered who controls Arkansas?

Follow the Money on 2018 Republican primaries to find out. The research team at Conduit for Commerce compiled an in-depth, comprehensive report following the money on selected 2018 Republican primaries. The takeaway is clear: establishment Republican candidates, whose votes favor bigger government, were elected with the large and unified financial support of Arkansas’ most established long-time special interest groups, which hold no party allegiance.

Conservative, limited government groups have a way to go before they see more of  their limited government candidates win election in Arkansas GOP primaries.

Conduit for Commerce collected contribution records from the Arkansas Secretary of State Financial Disclosure website, then sorted, tagged, and analyzed those against additional research of the contributing persons. This analysis allowed grouping between similar interests, entities, and persons. We could see who were the “big players” in Arkansas politics, whether contributions came inside or outside a legislative district, and allowed for a peak at the special interests behind the political contributions.

The reader is encouraged to use these findings as a blueprint for predicting future votes by these elected officials as various special interest issues come before the Legislature in January 2019.

If you want to know which way the political winds are blowing, it helps to know which way the campaign funds are flowing.

The report provides in depth analysis of fundraising for the following state legislative primaries:

Breanne Davis vs. Bob Bailey – State Senate District 16

Representative James Sturch vs. Senator Linda Collins-Smith – State Senate District 19

Cole Peck vs. Representative Dan Sullivan – House District 53

Representative Bob Ballinger vs. Senator Bryan King – Senate District 5

Representative Mat Pitsch vs. Frank Glidewell – Senate District 8

Scroll through or download the full report below. 

Download (PDF, 1.28MB)

2017 Legislative Scorecard: Ranking of the 91st General Assembly

2017 Ranking of the 91st General Assembly

Regular and Special Sessions– January-May 2017

By  Conduit for Commerce

June 13, 2017


Much like any specific vote, scoring of votes by Conduit for Commerce (CFC) is not an exact science as some bills have a greater impact on Arkansas if passed.  However, the weekly pre-vote publications (score cards) released during the Regular Session by Conduit for Action (CFA) referencing specific bills is reflective of the measure used in CFC’s final vote tallies.

Likewise, only bills which reflect the focus and mission of CFC are taken into account when deriving these rankings.  Therefore, our scoring is weighted for principles based upon the following preferred outcomes:

  • Reduces the size of government,
  • Reduces dependency on government, and/or
  • Reduces spending by government.

Votes cast by legislators on bills on the floor and during committees (when known) are all considered.  In total 30 Senate floor votes, along with three supportive committee votes, were scored.  For the members of the House of Representatives, 35 floor votes and 13 committee votes were included in the scoring.

It is believed that the methods used by CFC will ultimately yield a better assessment of the pattern of voting by a specific senator or house member.  It is our goal to assist voters as they measure differences in their expectations and results.  Ultimately our intent is that the voting pattern of these elected officials, as they relate to the above principles, is made clear.

Likewise, as the methods and results of the CFC rankings are compared to other groups, differences may be noted.  These differences should be filtered with the understanding that CFC is an Arkansas founded and small business focused organization, which not only understands the fiscal impact of these bills, but is able to use knowledge and background regarding directly related issues which may not be apparent to national groups.

(Note: Floor votes on bills reflected at the following government site:  This is the third Regular Session Report Card, starting in 2013, published by Conduit for Commerce.  For more information contact








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Any typographical errors will be promptly corrected.



2015 Calvin Coolidge Award Winners — Heroes of Freedom

Conduit for Commerce
2015 Calvin Coolidge Award Winners–Heroes of Freedom
Winners and Scoring Methodology
Scores Senate
25 Collins-Smith
23 Flippo
23 Rice
22 B. Johnson
22 B. King
16 G. Stubblefield
25 Copeland
25 Speaks
22 Jean
22 B. Smith
22 Ladyman
19 C. Douglas
19 Tosh
18 Wallace
17 Richmond
17 G. Hodges
17 Bentley
17 Miller
17 Deffenbaugh
15 M. Gray
15 Payton
15 Sullivan
Much like any specific vote, the CFC scoring of bills, committee votes (when known) floor votes, primary sponsorships, and co-sponsorships is not an exact science or a technique which may be described as linear. Our scoring is weighted for principles based upon the following preferred likely outcomes: 1) reduces the size of government, 2) reduces dependency on government, and/or 3) reduces spending by government. It is believed that this method will ultimately yield a better assessment of the pattern of voting by a specific Legislator helpful in measuring differences in expectations by voters. Ultimately it is the intent of CFC that the voting pattern of these elected officials, as they relate to the above principles, is made clear. July 31, 2015

General Improvement Fund – A Reelection Tool

Reprinted from Conduit for Action; By: David Ferguson

GIF-The members of Arkansas General Assembly are given discretion over millions of dollars in General Improvement Funds (GIF). For the 2015-2016 fiscal year $20 million has been set aside for the whims of legislators.  Each legislator determines how “their share” is spent. Some designate their share to go to a college others have the funds sent to the Department of Finance and Administration to then be sent to one of the eight planning and development districts and then awarded as grants.

The public is not privy to exactly how the money is divided among legislators, but if the House and Senate each received $10 million, and then with each Senator getting an equal share and each Representative getting an equal share, then each Senator would have discretion over $285,714.28 and each Representative would have discretion over $100,000.

Why are state funds distributed upon the discretion of an individual legislator instead of through a formula or perhaps retained for other needs? $20 million helps incumbent legislators gain favor in their districts.

2014 Election

Republican Doug Driesel, who ran against incumbent Democrat Representative Scott Baltz in District 61, stopped by a rural fire department to campaign.  According to Driesel, several firefighters told him they liked what he stood for, but that they couldn’t vote for him because Baltz had gotten General Improvement Funds for their fire department.

Blaine Davis ran as the Republican candidate in the adjoining District 60, against incumbent Representative James Ratliff. Recently, I asked Davis if he had a similar experience with fire fighters in his race. Davis responded:

 “Absolutely.  Several that I’d known for literally forever told me they would have to support him or just groaned when I told them who I was running against.  He’s given thousands to every one of them [fire departments].  Heck, at the Strawberry Fire Department fundraiser all he [Ratliff] did was stand up and talk about how much he gave them.”

A GIF grant is not likely to be forgotten by the members of an organization receiving the grant. In addition, local governments and volunteer organizations are also likely to be a good source of campaign workers because these are people who are already active in their community.

Could GIF make the difference in a legislative race?  You bet! Consider how close Blaine Davis’ came to winning.  Davis only lost to the incumbent by 50 votes. There are a lot of fire firefighters in House District 60. If just 26 firefighters voted for the incumbent because of GIF funds, then GIF funds made the difference in the outcome in that race.

Gaining publicity and building voter gratitude.

Legislators doling out GIF grants is a big deal in many areas of the state. Local newspapers, especially in rural areas, love to report that their Representative or Senator got GIF for local communities and organizations.  Legislators are quick to get in the photograph when as poster size check is handed out.  Click on name for an examples of the publicity legislators get from “their GIF:

 Rep. Scott Baltz                      Rep James Ratliff           Sen. Stephanie Flowers

Rep. Sheilla Lampkin            Rep Jeff Wardlaw          Rep Douglas House


Some legislators send all or a portion of “their” GIF to colleges. It is good publicity too.  For example, the University of Arkansas made sure its supporters and alumni knew that thirteen legislators deserve recognition for sending GIF to the university for three projects in the combined amount of $3 million. See article: University receives increase in state funding monies from General Improvement Fund

Many people see these articles and think “Our legislator is working hard and knows how to bring home the bacon.”  No effort was actually needed. Legislative GIF is just a slush fund created to give every legislator a share, whether the legislator uses it for a good purpose or not.

If the local newspaper fails to report the story or an organization’s newsletter fails to publicize it, what does a legislator do?  The answer is easy – toot your own horn on social media.  That is what Rep. Ratliff did when he did not get the publicity he hoped for.  Here are a couple of examples from James Ratliff’s Facebook account:

June 4, 2014: “Had a busy day. Started by going to the women’s battered shelter in Highland this morning awarding them a grant of $1000 for fixing their plumbing.”

April 12, 2015: “The fire chief Stan Mayland thanked myself (Rep James Ratliff) for the grants that bought all new turnouts and equipment for all the firemen in Strawberry.”

It seem a bit odd for a Representative to need to put his own name in parentheses on his own Facebook account.


Are there reasons for giving legislators discretionary funds (other than election purposes)? Are there legitimate reasons to give legislators discretionary funds?  No, there is not. Excuses cited in the past include:

1. Legislative discretion over the money is needed in order to get money for projects in rural areas. Wrong. Sorry but if getting funds to rural areas is the goal there would be a lot easier and cheaper ways of doing it. First, it is not just rural legislators who have say over GIF funds. Second, no legislator is required to use the funds for a rural project or even within his or her own district.

2. Legislative discretion is needed because a legislator knows better than anyone which local project should get a GIF. Wrong again. Legislators sometime do not know the greatest needs in their district and even if they do they have no obligation to use GIF for the most needed projects. In exercising discretion over the money, the legislator’s goals sometimes conflict with the priorities and needs of municipal and county officials.In 2013, Senator Jeremy Hutchinson directed GIF money to a firework show.  I happen to like firework shows, but local governments didn’t fund the firework show because of a lack of funds for more important projects.“Saline County Judge Lanny Fite said he has a list of projects that need funding like repaving parking lots or buying new lighting. ”“I did not like the way it was being used, plain and simple,” Fite said. “Money is very tight; we don’t have a sales tax. This money is always good to help us do projects that the county cannot afford.” [i]Also in 2013, then Representative Andy Mayberry and some legislative friends sent $120,000 in GIF to fund a playground that is fully accessible to disabled children.  That is certainly a worthy cause! But it also seems to be an instance in which a state Representative single handily pushed a project onto the county despite the quorum court not having money to maintain a park or replace equipment in the future.  It was noted by a quorum court member that the county didn’t even have a parks department. Julie Mayberry, Rep. Andy Mayberry’s wife and now a state Representative, responded to criticism by the quorum court in 2013 by suggesting that the quorum court create a parks department.[ii]Could we handle needs without giving legislators an expensive reelection tool?

On the other hand, maybe we would miss those newspaper photos of legislators handing out poster sized checks and their Facebook self promotions. The state also has turn back formulas for sending state support to municipalities and counties.

Also consider that a significant portion of legislative GIF goes to fire departments.  Again, there is a funding formula for support of fire departments.  In addition, a fire department with a significant need could be overlooked merely because it is in a legislative district where the legislator prefers to give his GIF allotment to a college or perhaps want to use it for a fireworks show.

Consider that a significant portion of legislative GIF goes to colleges. We already have a funding formula for the colleges. The Department of Higher Education should have a good understanding of needs of Arkansas colleges.  And, under the current system there is no guarantee that the most important need will be addressed because a legislator with a college in his or her district could choose to spend his or her share on other types of projects.

Do we really have to give a legislator a “please-reelect me fund” in order to fund worthy projects.


[i] Display funding called to question, Arkansas Democrat Gazette, July 4,2014

[ii] Legislator’s letter eased funds for wife’s park project, Arkansas Democrat Gazette, Sept 3, 2013




For a complete copy of CMS Terms and Conditions see:

(Note: some words may have been mistyped in this document through conversion from pdf to text format to shorten)

NUMBER:     ll-W-00287/6

 TITLE:   Arkansas Health Care Independence Program (Private Option)

AWARDEE:  Arkansas Department of Human Services


The following are the Special Terms and Conditions (STCs) for the Arkansas Health Care Independence Program (Private Option) section 1115(a) Medicaid demonstration (hereinafter demonstration) to enable Arkansas (State) to operate this demonstration. The Centers for Medicare & Medicaid Services (CMS) has granted waivers of requirements under section 1902(a) of the Social Security Act (Act), and expenditure authorities authorizing federal matching of demonstration costs not otherwise matchable, which are separately enumerated. These STCs set forth in detail the nature, character, and extent of federal involvement in the demonstration and the State’s obligations to CMS during the life of the demonstration. The STCs are effective on the date of the signed approval. Enrollment activities for the new adult population will begin on October  1, 2013 for the Private Option qualified health plan (QHP) with eligibility effective January  1, 2014.  The demonstration will be statewide and is approved through  December  31, 2016.

The STCs have been arranged into the following subject areas:


  1. Preface
  2. Program Description And Objectives
  3. General Program Requirements
    1. Populations  Affected
    2. Private Option Premium Assistance Enrollment
      1. Premium Assistance Delivery System
        1. Benefits
        2. Cost Sharing
          1. Appeals
          2. General Reporting Requirements
            1. General Financial Requirements
              1. Monitoring Budget Neutrality
            2. Evaluation
              1. Monitoring
                1. Health Information Technology and Premium Assistance
        3. T-MSIS




Under the Private Option demonstration, the State will provide premium assistance, to support the purchase by beneficiaries eligible under the new adult group under the state plan of coverage from QHPs offered in the individual market through the Marketplace.  In Arkansas, individuals eligible for coverage under the new adult group are both (1) childless adults ages 19 through 64 with incomes at or below 133 percent of the federal poverty limit (FPL) or (2) parents and other caretakers between the ages of 19 through 64 with incomes between 17 percent and 133 percent of the FPL (collectively Private Option beneficiaries).  Arkansas expects approximately 200,000 beneficiaries to be enrolled into the Marketplace through this demonstration program.


Private Option beneficiaries will receive the State plan Alternative Benefit Plan (ABP) primarily through a QHP that they select and will have cost sharing obligations consistent with the State plan.


With this demonstration Arkansas proposes to further the objectives of Title XIX by:

  • Promoting continuity of coverage for individuals,
    • Improving access to providers,
      • Smoothing the “seams” across the continuum of coverage, and
      • Furthering quality improvement and delivery system reform initiatives.


Arkansas proposes that the demonstration will provide integrated coverage for low-income Arkansans, leveraging the efficiencies of the private market to improve continuity, access, and quality for Private Option beneficiaries.  The state proposes that the demonstration will also drive structural health care system reform and more competitive premium pricing for all individuals purchasing coverage through the Marketplace by doubling the size of the population enrolling in QHPs offered through the Marketplace.


The state proposes to demonstrate following key features:


Continuity of coverage and care -For households with members eligible for coverage under Title XIX and Marketplace coverage as well as those who have income fluctuations that cause their eligibility to change year-to-year, or multiple times throughout the year, the demonstration will create continuity of health plans available for selection as well as provider networks. Households may stay enrolled in the same plan regardless of whether their coverage is subsidized through Medicaid, or Advanced Payment Tax Credits/Cost Sharing Reductions (APTC/CSRs).


Support equalization of provider reimbursement and improve provider access – The demonstration will support equalization of provider reimbursement across payers, toward the end of expanding provider access and eliminating the need for providers to cross-subsidize. Arkansas Medicaid provides rates of reimbursement lower than Medicare or commercial payers, causing some providers to forego participation in the program and others to “cross subsidize” their Medicaid patients by charging more to private insurers.


(pages 3-4 omitted)

demonstration, the governor or chief executive officer of the State must submit to CMS either a demonstration extension request or a transition and phase-out plan consistent with the requirements of STC 9.


  1. Compliance with Transparency Requirements at 42 CFR §431.412.


  1. As part  of  the demonstration  extension  requests  the State must  provide  documentation  of compliance  with the transparency  requirements  42 CFR  §431.412 a:tJ.d the public notice and tribal  consultation  requirements  outlined  in STC  15.


  1. Demonstration Phase Out.  The State may only suspend or terminate this demonstration in whole, or in part, consistent with the following requirements.


  1. Notification of Suspension or Termination: The State must promptly notify CMS in writing of the reason(s) for the suspension or termination, together with the effective date and a transition and phase-out plan.  The State must submit its notification letter and a draft plan to CMS no less than six (6) months before the effective date of the demonstration’s suspension or termination.  Prior to submitting the draft plan to CMS,  the State must publish on its website the draft transition and phase-out plan for a 30-day public comment period. In addition, the State must conduct tribal consultation in

accordance with its approved tribal consultation State Plan Amendment. Once the 30-day public comment period has ended, the State must provide a summary of each public comment received the State’s response to the comment and how the State incorporated the received comment into the revised plan.


  1. The State must obtain CMS approval of the transition and phase-out plan prior to the implementation of the phase-out activities. Implementation of activities must be no sooner than 14 days after CMS approval of the plan.


  1. Transition  and Phase-out Plan Requirements: The State must include, at a minimum, in its plan the process by which it will notify affected beneficiaries, the content of said notices (including information on the beneficiary’s appeal rights), the process by which the State will conduct administrative reviews of Medicaid eligibility prior to the termination of the program for the affected beneficiaries, and ensure ongoing coverage for those beneficiaries  determined eligible, as well as any community outreach activities including community resources that are available.
  2. Phase-out Procedures: The State must comply with all notice requirements found in 42 CFR §431.206, §431.210, and §431.213. In addition, the State must assure all appeal and


  • hearing rights afforded to demonstration participants as outlined in 42 CFR §431.220 and

§431.221. If a demonstration participant requests a hearing before the date of action, the State must maintain benefits as required in 42 CFR §431.230. In addition, the State must conduct administrative renewals for all affected beneficiaries in order to determine if they qualify for Medicaid eligibility under a different eligibility category.  42 CFR Section 435.916.

  1. Exemption from Public Notice Procedures 42.CFR Section 431.416(g).  CMS may expedite the federal and State public notice requirements in the event it determines that the objectives of title XIX and XXI would be served or under circumstances described in 42 CFR Section 431.416(g).

f.    Federal Financial Participation (FFP): If the project is terminated or any relevant waivers suspended by the State, FFP shall be limited to normal closeout costs associated with terminating the demonstration including services and administrative costs of disenrolling participants.


10.  Post Award Forum.  Within six months of the demonstration’s implementation,  and annually thereafter, the State will afford the public with an opportunity to provide meaningful comment on the progress of the demonstration.  At least 30 days prior to the date of the planned public forum, the state must publish the date, time and location of the forum in a prominent location on its website.  The state can either use its Medical Care Advisory Committee, or another meeting that is open to the public and where an interested party can learn about the progress of the demonstration to meet the requirements of this STC.  The state must include a summary of the comments in the quarterly report as specified in STC 46 associated with the quarter in which the forum was held.  The State must also include the summary in its annual report as required in STC 48.


11.  Federal Financial Participation (FFP).  If the project is terminated or any relevant waivers suspended by the state, FFP shall be limited to normal closeout costs associated with terminating the demonstration including services and administrative costs of disenrolling enrollees.


  1. Expiring Demonstration Authority. For demonstration authority that expires prior to the demonstration’s expiration date, the state must submit a transition plan to CMS no later than six months prior to the applicable demonstration authority’s’ expiration date, consistent with the following requirements:


  1. Expiration Requirements.  The state must include, at a minimum, in its demonstration expiration plan the process by which it will notify affected beneficiaries, the content of said notices (including information on the beneficiary’s appeal rights), the process by which the State will conduct administrative reviews of Medicaid eligibility for the affected beneficiaries, and ensure ongoing coverage for eligible individuals, as well as any community outreach activities.


(Pages 7-17 omitted)

  1. Administrative Costs.  Administrative  costs will not be included in the budget neutrality limit, but the State must separately track and report additional administrative costs that are directly attributable to the demonstration, using Forms CMS-64.10 Waiver and/or 64.10P Waiver, with waiver name Local Administration Costs (“ADM”).


  1. Claiming Period.  All claims for expenditures subject to the budget neutrality limit (including any cost settlements) must be made within 2 years after the calendar quarter in which the State made the expenditures.  Furthermore, all claims for services during the demonstration period (including any cost settlements) must be made within 2 years after the conclusion or termination of the demonstration.  During the latter 2-year period, the State must continue to identify separately net expenditures related to dates of service during the operation of the section 1115 demonstration on the Form CMS-64 and Form CMS-21 in order to properly account for these expenditures in determining budget neutrality.


  1. Reporting Member Months. The following describes the reporting of member months for demonstration  populations:


  1. For the purpose of calculating the budget neutrality expenditure cap and for other purposes, the State must provide to CMS, as part of the quarterly report required under STC 46, the actual number of eligible member months for the demonstration populations defined in STC 17. The State must submit a statement accompanying the quarterly report, which certifies the accuracy of this information.


To permit full recognition of “in-process” eligibility, reported counts of member months may be subject to revisions after the end of each quarter. Member month counts may be revised retrospectively as needed.


  1. The term “eligible member months” refers to the number of months in which persons are eligible to receive services.  For example, a person who is eligible for three months contributes three eligible member months to the total.  Two individuals who are eligible for two months each contribute two eligible member months to the total, for a total of four eligible member months.


  1. Standard Medicaid  Funding Process.   The standard Medicaid  funding process  must be used during the demonstration.  The State must estimate matchable demonstration

expenditures (total computable and federal share) subject to the budget neutrality expenditure

cap and separately report these expenditures by quarter for each federal fiscal year on the Form CMS-37 for both the Medical Assistance Payments (MAP) and State and Local Administration Costs (ADM).  CMS will make federal funds available based upon the State’s estimate, as approved by CMS.  Within 30 days after the end of each quarter, the State must submit the Form CMS-64 quarterly Medicaid expenditure report, showing Medicaid expenditures made in the quarter just ended.  The CMS will reconcile expenditures reported on the Form CMS-64 quarterly with federal funding previously made available to the State, and include the reconciling adjustment in the finalization of the grant award to the State.





Jan 6, 2014

As leaders responsible to the people of Arkansas, we will work to terminate the Arkansas Health Care Independence Act of 2013 (Private Option) over the next two months for the following reasons:

  1. Our primary concern is for the complete health and well-being of the people of Arkansas.  We will work to insure that the excellent health care (as opposed to health insurance) enjoyed in this great country is continued and available to all Arkansans at affordable costs.
  • It is our job to  protect the health care and financial condition of our total population, including:
    • Our approximate 3,000,000 citizen;[i]
    • our 200,000 citizens expected to be covered under the Private Option;[ii]
    • our 50,000 small business owners  (which include many of our finest medical doctors);[iii]
    • as well as the fine health care facilities in Arkansas from which we all benefit.
  1. Our concern for Arkansans’ as a result of the passage and implementation of the Private Option are summed up in one statement: 

The intent, purposes, and ability to terminate the Arkansas Health Care Independence Act of 2013 have been thwarted by the contract forced on Arkansas by the federal government which unilaterally expanded entitlement benefits to the participants.[iv] 

Our specific concerns are as follows:

  1. Obamacare is bad for Arkansas and the Private Option is the expansion of Obamacare:
  • For an overwhelming number of reasons Obamacare is clearly harmful to health care for all Arkansans;
  • Arkansans overwhelmingly oppose Obamacare;
  • As a result of the contract with the federal government, the Private Option is now proven to be an expansion of Medicaid and Obamacare in Arkansas-thus causing Arkansans to be forced into aiding in the implementation of Obamacare in our entire state and country– contrary to the 2012 US Supreme Court ruling.[v]
  1. The Private Option was quickly passed in April 2013 due to what we now know was a false sense of urgency, based on now false principles and false assumptions , not the least of which was that the Arkansas Legislature could pull the trigger on the PO at its discretion .
  2. c.       Now that we have passed it….and now “read it”,[vi] we discover that Arkansas has entered into a contract with the federal government vastly different than the Arkansas legislature intended.[vii]    

Those differences thwart the intent, purposes, and ability to terminate the Act while giving participants entitlement benefits.


  1. d.       These differences are set out below.

i.      The intent and purposes of the Health Care Independence Act of 2013[viii] have been thwarted in that:

  1. Rather than competitive and value based purchasing of insurance with increased participation, intensifying price pressures, and reduce costs for both publicly and privately funded health care, we have limited state-wide providers at increased premiums expected to be 138.6% more than prior to the passage of the Act (5th highest increase in the nation);[ix]  and we have more than 18 new federal taxes to pay as a result of Obamacare.[x]
  2. Rather than promoting personal responsibility and efficiencies through cost sharing as well as discourage over-utilization and reduce waste, fraud, and abuse, we see that programs such as the PO have proven to drive use of the emergency room up 40% for non-emergencies by the users with no improved health consequences; [xi] (and since there is no costs to these users thus no cost sharing involved.)
  3. Rather than private health care options increasing and government-operated programs such as Medicaid decreasing-and actually reducing the size of the state-administered Medicaid program, we see the PO has expanded Medicaid;[xii]
  4. Rather than the decisions about the design, operation and implementation of the PO, including cost, remaining within the purview of the State of Arkansas and not with Washington, DC, we find that the contract forced on Arkansas by the federal government gives the federal government all the say on design, operation, implementation and the cost—including how much or that all the costs are borne by Arkansas taxpayers.[xiii]
  5. 5.       Rather than improving access to quality health care and increasing quality and delivery system efficiencies, we find from the assurances of our own Arkansas medical community and unbiased national research that health care will be limited and likely rationed compared to that which Arkansans have grown accustomed.  “Like having a life-time of gasoline for your bicycle,” was a recent statement made by a local family practice doctor when asked what he thought of Obamacare and Arkansas’ implementation of its Private Option. [xiv]  (Sadly we have just witnessed a hospital in CA fighting in court to take from the family the decision to end the life of a young patient—in the name of quality affordable care-referencing her as a deceased body.)[xv]

ii.      The triggers within the Act to terminate the program at the discretion of the Arkansas legislature are effectively removed or without real consequence.  The five (5) triggers[xvi]  within the Act are the following:

  1. 1 of 5: DHS is only allowed to submit to the federal government Medicaid State Plan amendments which are optional and therefore may be revoked by the state at its discretion;
  2. 2 of 5: If DHS is unable to confirm AR employers shall not be subject to penalties…the program shall not be implemented;
  3. 3 of 5:  The Program shall terminate within 120 days after a reduction in any federal medical assistance percentages –meaning if the program costs AR in excess of 0% to 10% between 2014 and 2020 it is terminated;
  4. 4 of 5:  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 and subject to cancellation upon appropriate notice;
  5. 5 of 5:  This Act requires appropriations for its continuation; if such is not made by the Arkansas legislature, the Act is void.

Although the Act itself contains the above triggers, through its Terms and Conditions contract[xvii] the federal government (CMS) has forced provisions into the PO which prevent discretionary termination.  The contract with CMS purports to severely limit Arkansas’ ability to terminate the program by:

  • Giving the federal government (CMS) authority to approve or disapprove a transition and phase-out plan.
  • Providing the state cannot even begin phase-out procedures until receiving CMS approval.
  • Imposing a lengthy minimum notice period of seven monthsThis leaves one wondering whether, if the seven month period were to go into or near a new calendar year, would CMS impose another 12 months of coverage beyond the notice period (mirroring “eternal life of a government program” syndrome.)

iii.      It was stated in the Arkansas legislation that the private option is not an entitlement program but the CMS Terms and Conditions give rights to participants.  CMS added as a condition for terminating the program, that participants in the Private Option then be given an opportunity for a hearing on whether he or she is eligible to be covered by Medicaid and added a requirement that during the person’s appeal process the participant must still be given coverage under the private option, which could be even after the Private Option was scheduled to terminate.

iv.      CMS added a condition that has the potential of causing the state to pay more than allowed in Arkansas’ Health Care Independence Act of 2013.  CMS added a budget neutrality requirement which could shift cost overruns to Arkansas.  Budget neutrality is not an unusual provision, however, it must be noted that the provision has the potential of increasing Arkansas’ burden beyond the spending limits set in Arkansas’ Health Care Independence Act of 2013, at the discretion of the federal government.

v.      CAN WE TRUST THE FEDERAL GOVERNMENT NOT TO CHANGE THE RULE ON US?   The track record of the Affordable Care Act is so bad that it is difficult to keep up with all the changes, exemptions and delays.  Medicaid expansion is part of that legislation.  For Arkansas Medicaid expansion wavier, allowing Arkansas to offer the “Private” Option, CMS Terms and Conditions have already changed the ground rules Arkansas set by its legislation.

vi.      SHORT-TERM FEDERAL FUNDING ADVANTAGE VERSUS LONG TERM STATE OBLIGATION.  The federal government promises 100% funding initially but after the state has gotten used to having the program the funding goes down to 90% and who knows what the federal funding will be in a few years when the program is fully entrenched in Arkansas.

vii.      IS FEDERAL FUNDING LEVEL SUSTINABLE?  Remember the funding is being promised by a federal government that is over $17 trillion in debt and rising.

viii.      FREE MONEY IS NOT FREEIt was too tempting not to take “free” federal money that Arkansas would lose out on if Arkansas didn’t expand Medicaid or do so through the Private Options.  But the money is not free.  By Arkansas adding this PO, we have increased the burdens on all across the US.  And the money comes from our taxes.  Be aware that several new taxes have been added (at least 18).  Also, be aware that the “free money” adds to our national debt that ruins our economy and that will continue to burden our children and grandchildren.

ix.      WHY HAVE SO MANY STATES REFUSED THE MONEY?  If the “free” money was such a good thing then why have only half of the states accepted the money?  Many states have refused to expand Medicaid coverage.  The Private Option is just another way of expanding the coverage. Note that in Arkansas’ waiver application the state admits that expansion of Medicaid is not workable in Arkansas.[xviii]

  1. ARKANSAS CAN AND WILL TAKE CARE OF ITS OWN!  We are committed first to the health and well-being of Arkansans.  As a result, we will work to immediately end the PO and replace it with real Health Care reform which is good for all Arkansas.  We can do this!  We do not need an overreach by the federal government or enslavement to federal debt to take care of the health and welfare of those in our state.

This “Call for Action” is endorsed by the following AR State Senators and AR House Members:

Senators:                                                                     House Members:


[ii] Page 2 of CMS Terms & Conditions; see



To implement Arkansas’ Private Option the state filed an application for 1115 Waiver from Medicaid requirements.  The application was approved but as a condition for approval, CMS attached terms and condition as a condition for approval.  The requirements are identified as Centers for Medicare and Medicaid Special Terms and Conditions, Document Number 11-W-00287/6.

Notice.  Arkansas’ Health Care Independence Act of 2013 says Arkansas may terminate the private option “upon appropriate notice”.[iv]  (ACA 20-77-2405 (i)(2)) Although “appropriate notice” is not defined in the act, it should be noted that the act provides that if federal medical assistance percentages fall below a threshold, the program automatically terminates within one hundred twenty (120) days.  (ACA  20-77-2405 (h)) The CMS Terms and Conditions purports to make the termination process more difficult and even imposes an approval procedure.  The CMS Terms and Conditions:  (Note:  the ACA subchapter listed in the Arkansas Act l changed once codified.)

  1. Requires a minimum of seven (7) months of termination notice but this period could be longer in trying to meet all CMS requirements.  This includes six (6) month written notice to CMS and before that notice a thirty (30) day public comment period before submitting written notice to CMS (Terms and Conditions (9)(a));
  2. Requires Arkansas to obtain CMS approval of a transition and phase-out plan. No standards are specified on the criteria to be used by CMS in determining whether or not to approve the state phase-out plan.  No time limit is provided for CMS to take actions.  This appears to be a de facto veto power. (Terms and Conditions (9)(b))
  3. Prohibits Arkansas from even beginning implementation of phase-out activities until 14 days after CMS has approved the plan; (Terms and Conditions (9)(b))
  4. Extends the time in which the private option must be operated by guaranteeing participants the right to continue coverage under the private option even after termination of the program, if the person is appealing a Medicaid denial. (Terms and Conditions (9)(d)) The participants in the private option have the right to a hearing to determine if the person is eligible for Medicaid coverage after the termination of the private option. (Terms and Conditions (9)(c))

Not a benefit plan.  Arkansas’ Health Care Independence Act of 2013 says “The program is not a perpetual federal or state right or a guaranteed entitlement” and repeats “The program is not an entitlement program.”  (ACA 20-77-2405 (i)(2) and (i)(3)) The CMS Terms and Conditions impose procedures during program termination that in no way favor private insurance contract terminations but does resemble a benefit program.  The Terms and Conditions say:

  1. If a private option participant requests a hearing before the date of termination of the program, the State must maintain benefits during the appeal. (Terms and Conditions (9)(c) and (9)(d))
  2. In addition, the State must provide for administrative review to determine if private option participants qualify for Medicaid eligibility under a different eligibility category while also maintaining benefits. (Terms and Conditions (9)(d))

Financial obligation.  Arkansas’ Health Care Independence Act of 2013 imposes minimum federal medical assistance percentages (including 100% in 2014 and 2015 and lower percentages in future years). (ACA 20-77-2405 (h)) The CMS Terms and Conditions include a budget neutrality expenditure cap for the share paid by the federal government. (Terms and Conditions (55)) Budget neutrality provisions are not uncommon, but the percentage limits in the Arkansas act does not provide for an exception for additional obligations to Arkansas due to a budget neutrality expenditure cap for the federal government.

[v];  National Federation of Independent Business, et al., V. Sebelius, et al., 567 U. S. ____ (2012)


[vi] REP. NANCY PELOSI: “But we have to pass the bill so that you can find out what is in it away from the fog of the controversy.”  3/09/2010;


[vii] CMS Terms and Conditions-No 11-W-00287/6 effective Sept 27, 2012 through Dec 31, 2016; see


[viii] See

(CFC) Specific provisions of “The Arkansas Health Care Independence Act of 2013” version prior to codification:

Intent and Purposes:

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 insurance option for “low-risk” adults.

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

(A) Private health care options increase and government-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; 11

(2) Attract insurance carriers and enhance competition in the 12 Arkansas insurance marketplace; 13

(3) Promote individually-owned health insurance; 14

(4) Strengthen personal responsibility through cost-sharing; 15

(5) Improve continuity of coverage; 16

(6) Reduce the size of the state-administered Medicaid program; 17

(7) Encourage appropriate care, including early intervention, 18 prevention, and wellness; 19

(8) Increase quality and delivery system efficiencies; 20

(9) Facilitate Arkansas’s continued payment innovation, delivery 21 system reform, and market-driven improvements; 22

(10) Discourage over-utilization; and

(11) Reduce waste, fraud, and abuse.


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:

(i) 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

(ii)(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. L. No. 111-148, as existing on January 1, 2013, concerning shared responsibility, for employees who are eligible individuals if the employees:

(a) Are enrolled in the program; and

(b) Enroll in a Qualified Health Plan through the Health Insurance Marketplace.

(ii) If the Department of Human Services is unable 25 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 implemented.

(c) The program shall include premium assistance for eligible individuals to enable their enrollment in a Qualified 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 Qualified Health Plans for enrolled eligible individuals.

(2) The intent of the payments under subdivision (d)(1) of this 2 section is to increase participation and competition in the health insurance market, intensify price pressures, and reduce costs for both publicly and  privately funded health care.

(omitted (d)-(g))

(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:

(1) One hundred percent (100%) in 2014, 2015, 1

or 2016;

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

(3) Ninety-four percent (94%) in 2018;

(4) Ninety-three percent (93%) in 2019; and

(5) Ninety percent (90%) in 2020 or any year after 2020.

(i) An eligible individual enrolled in the program shall affirmatively  acknowledge that:

(1) The program is not a perpetual federal or state right or a  guaranteed entitlement;

(2) The program is subject to cancellation upon appropriate

notice; and

(3) The program is not an entitlement program.

20-77-2108. Effective date.

This subchapter shall be in effect until June 30, 2017, unless amended or extended by the General Assembly.

SECTION 3. NOT TO BE CODIFIED. (a) The implementation of this act is suspended until an appropriation for the implementation of this act is passed by a three-fourths vote of both houses of the Eighty-Ninth General Assembly.

(b) If an appropriation for the implementation of this act is not passed by the Eighty-Ninth General Assembly, this act is void.

SECTION 4. NOT TO BE CODIFIED. The enactment and adoption of this act 13 shall supersede Section 21 of HB1219 of the Eighty-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 19 Program requires 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, 29 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.


[ix] 138.3% higher health insurance premiums (5th highest increase in the nation)


[xii] CMS Terms and Conditions-No 11-W-00287/6 effective Sept 27, 2012 through Dec 31, 2016 ; see;


[xiii] CMS Terms and Conditions-No 11-W-00287/6 effective Sept 27, 2012 through Dec 31, 2016, see


[xiv] and


[xvi] See endnote 7 above, “Triggers.”