Second Regular Session 117th General Assembly (2012)
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HOUSE ENROLLED ACT No. 1269
AN ACT to amend the Indiana Code concerning health.
Whereas, the separation of powers, both between the branches of
the federal government and between federal and state authority, is
essential to the preservation of individual liberty;
Whereas, the United States Constitution creates a federal
government of limited and enumerated powers, and reserves to the
states or to the people those powers not granted to the federal
Whereas, the federal government has enacted many laws that have
preempted state laws with respect to health care, and placed
increasing strain on state budgets, impairing other responsibilities
such as education, infrastructure, and public safety;
Whereas, the member states seek to protect individual liberty and
personal control over health care decisions, and believe the best
method to achieve these ends is by vesting regulatory authority over
health care in the states;
Whereas, by acting in concert, the member states may express and
inspire confidence in the ability of each member state to govern health
care effectively; and
Whereas, the member states recognize that consent of Congress
may be more easily secured if the member states collectively seek
consent through an interstate compact: Therefore,
Be it enacted by the General Assembly of the State of Indiana:
SECTION 1. IC 12-16.5 IS ADDED TO THE INDIANA CODE AS
ARTICLE TO READ AS FOLLOWS [EFFECTIVE JULY 1,
ARTICLE 16.5. THE HEALTH CARE COMPACT
Chapter 1. Definitions
Sec. 1. As used in this article, "commission" refers to the
interstate advisory health care commission established by
Sec. 2. As used in this article, "compact" refers to the health
care compact entered into under this article.
Sec. 3. As used in this article, "current year inflation adjustment
factor" means the total gross domestic product deflator, as
determined by the United States Department of Commerce's
Bureau of Economic Analysis, in the current year divided by the
total gross domestic product deflator in federal fiscal year 2010.
Sec. 4. (a) As used in this article, "health care" means care,
services, supplies, or plans related to the health of an individual,
including the following:
(1) Preventative, diagnostic, therapeutic, rehabilitative,
maintenance, and palliative care, including counseling,
service, assessment, or procedure concerning the physical or
mental condition or functional status of an individual or that
affects the structure or function of the body.
(2) Sale or dispensing of a drug, device, equipment, or other
item under a prescription.
(3) An individual or group health plan that provides or pays
the costs of care, services, or supplies related to the health of
(b) The term does not include care, services, supplies, or plans
(1) by the United States Department of Defense;
(2) by the United States Department of Veterans Affairs; or
(3) to Native Americans.
Sec. 5. As used in this article, "member state" means a state that
has adopted the health care compact law.
Sec. 6. As used in this article, "member state base funding level"
means a number determined by the member state to be equal to the
total federal spending on health care in the member state during
federal fiscal year 2010 and is set forth in IC 12-16.5-3-4.
Sec. 7. As used in this article, "member state current year
funding level" means the member state base funding level
multiplied by the member state current year population
adjustment factor multiplied by the current year inflation
Sec. 8. As used in this article, "member state current year
population adjustment factor" means the average population of the
member state in the current year, as determined by the United
States Census Bureau, less the average population of the member
state in federal fiscal year 2010, divided by the average population
of the member state in federal fiscal year 2010 plus one (1).
Chapter 2. Applicability
Sec. 1. This article is effective upon the following:
(1) The adoption of the compact by at least two (2) member
(2) The consent of the federal United States Congress without
changes by Congress to the following fundamental purposes
of the compact:
(A) To secure the right of the member states to regulate
health care in the member state's jurisdiction under the
compact and to suspend the operation of any conflicting
federal laws, rules, regulations, and orders within the
(B) To secure federal funding for member states that
choose to invoke the member state's authority under the
compact, as set forth in IC 12-16.5-3.
Chapter 3. Health Care Compact
Sec. 1. (a) The governor may enter into the compact on behalf
of the state with any other state only after the following occur:
(1) The budget committee reviews the compact and any plan
developed under subdivision (2).
(2) The budget agency prepares a plan showing how Indiana
will provide access to health care for Indiana residents under
(3) The budget agency presents the plan described in
subdivision (2) to the health finance commission established
by IC 2-5-23-3.
(b) The member states shall take joint and separate action to
secure the consent of the United States Congress for the compact
in order to return the authority to regulate health care to the
member states that is consistent with the goals and principles
articulated in the compact.
(c) The member states shall improve health care policy within
the states' jurisdictions and according to the judgment and
discretion of each member state.
Sec. 2. The state legislature of each member state has the
primary responsibility to regulate health care in the member
Sec. 3. (a) Each member state, for the member state's
jurisdiction, may, to the extent allowed under the Constitution of
the United States and the constitution of the member state, suspend
by legislation federal laws, regulations, and orders concerning
health care that are inconsistent with the laws and regulations
adopted by the member state under the compact.
(b) Any federal or state law, regulation, or order concerning
health care will remain in effect unless a member state expressly
suspends the law, regulation, or order under the member state's
authority under the compact.
(c) The member state shall be responsible for implementing any
federal law, rule, regulation, or order described in this section that
remains in effect in the member state.
Sec. 4. (a) Each member state for each federal fiscal year shall
have the right to federal monies in an amount up to the member
state current year funding level for the current year, funded by the
federal government as mandatory spending and that is not subject
to annual appropriation, to support the exercise of the member
state authority under the compact. The funding may not be
conditional on any action of or regulation, policy, law, or rule that
is being adopted by the member state and that is allowed under the
Constitution of the United States and the constitution of the
(b) By the start of each federal fiscal year, the federal United
States Congress shall establish an initial member state current year
funding level for each member state. The initial member state
current year funding level must be based on a reasonable estimate.
The final member state current year funding level shall be
calculated and funding shall be reconciled by the federal United
States Congress based on information provided by each member
state and audited by the United States Government Accountability
Sec. 5. The member states may fund the commission in a
manner agreed upon by the member states.
Sec. 6. The member states may, by unanimous agreement,
amend the compact without the prior consent or approval of the
federal United States Congress, to the extent the amendment is
allowed under the Constitution of the United States and the
constitutions of the member states. Any amendment shall be
effective unless, not later than one (1) year from the approval of
the amendment, the federal United States Congress disapproves of
Sec. 7. Any state may join the compact after the date of consent
of the compact by the federal United States Congress if the state
adopts the compact into law.
Sec. 8. (a) A member state may withdraw from the compact by
doing the following:
(1) The member state's governor notifies other member states
of the intent to withdraw from the compact at least six (6)
months before the withdrawal may occur.
(2) The member state's legislature adopts legislation to
withdraw from the compact.
(b) A member state withdrawing from the compact is liable for
any obligations that the withdrawing state may have incurred
prior to the date of which the withdrawal is effective.
Sec. 9. The compact shall be dissolved upon the withdrawal
from the compact of all but one (1) member state.
Chapter 4. Interstate Advisory Health Care Commission
Sec. 1. (a) The interstate advisory health care commission is
(b) The commission consists of members appointed by each
member state in a manner determined by each member state. A
member state may not appoint more than two (2) members to the
commission and may withdraw membership from the commission
at any time.
(c) Each commission member is entitled to one (1) vote. The
commission may not act unless a majority of the members are
present, and an action is not binding unless approved by a majority
of the commission's total membership.
Sec. 2. (a) The commission may do the following:
(1) Elect a chairperson from the commission's membership.
(2) Adopt and publish bylaws and policies that are consistent
with the compact.
(3) Study issues of health care regulation that are of concern
to the member states.
(4) Make non-binding recommendations to the member states,
of which the state legislatures of the member states may
consider in determining appropriate health care policies for
the member state.
(b) The commission shall do the following:
(1) Meet at least one (1) time per calendar year.
(2) Collect information and data to assist member states in the
regulation of health care, including assessing the performance
of state health care programs and compiling information on
the prices of health care.
(c) The commission shall make the information collected under
this section available to the legislatures of member states.
(d) Legislatures of the member states may confer additional
responsibilities and duties on the commission through legislative
action in accordance with the terms of the compact.
(e) The commission may not take any action within a member
Sec. 3. A member state may not disclose personal health
information of an individual to the commission. The commission
may not disclose the personal health information of an individual.
Chapter 5. Participation in Compact
Sec. 1. Indiana's participation in the compact does not include
the administration of Medicare (42 U.S.C. 1395 et seq.) unless the
General Assembly takes action that specifically authorizes
inclusion of the Medicare program in the compact.
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