109TH CONGRESS 

1ST SESSION H. R. 3204

AN ACT

To amend title XXVII of the Public Health Service Act 

to extend Federal funding for the establishment and 

operation of State high risk health insurance pools.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘State High Risk Pool 

3 Funding Extension Act of 2005’’. 

4 SEC. 2. EXTENSION OF FUNDING FOR ESTABLISHMENT AND 

5 OPERATION OF STATE HIGH RISK HEALTH IN6 SURANCE POOLS. 

7 (a) AUTHORIZATION OF APPROPRIATIONS.—Sub8 section (c) of section 2745 of the Public Health Service 

9 Act (42 U.S.C. 300gg–45) is amended to read as follows: 

10 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—

11 ‘‘(1) SEED GRANTS.—For the purpose of car12 rying out subsection (a), there is authorized to be 

13 appropriated $15,000,000 for fiscal year 2005. 

14 ‘‘(2) OPERATION OF POOLS.—For the purpose 

15 of carrying out subsection (b), there is authorized to 

16 be appropriated $50,000,000 for each of the fiscal 

17 years 2005 through 2009. 

18 ‘‘(3) AVAILABILITY; RULE OF CONSTRUC19 TION.—Funds appropriated under this subsection 

20 for a fiscal year shall remain available for obligation 

21 through the end of the following fiscal year. Nothing 

22 in this section shall be construed as providing a 

23 State with an entitlement to a grant under this sec24 tion.’’. 

25 (b) CHANGE IN REQUIREMENTS FOR QUALIFIED

26 HIGH RISK POOLS.—
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1 (1) CHANGE IN REQUIREMENT FOR OPER2 ATIONAL GRANTS.—Subsection (b) of such section is 

3 amended—

4 (A) in paragraph (1)(A), by inserting ‘‘(or 

5 200 percent in the case of a State that meets 

6 the requirements of paragraph (3))’’ after ‘‘150 

7 percent’’; 

8 (B) in paragraph (1)(C), by striking ‘‘after 

9 the end of fiscal year 2004’’ and inserting 

10 ‘‘after the end of the last fiscal year for which 

11 a grant is provided under this paragraph’’; and 

12 (C) by adding at the end the following new 

13 paragraph: 

14 ‘‘(3) SPECIAL RULE FOR POOLS CHARGING

15 HIGHER PREMIUMS.—In the case of a qualified high 

16 risk pool of a State which charges premiums that ex17 ceed 150 percent of the premium for applicable 

18 standard risks, the State shall use at least 50 per19 cent of the amount of the grant provided to carry 

20 out this subsection to reduce premiums for enroll21 ees.’’. 

22 (2) CHANGE IN DEFINITION OF QUALIFIED

23 HIGH RISK POOL.—Subsection (d) of such section is 

24 amended to read as follows: 

25 ‘‘(d) DEFINITIONS.—In this section: 
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1 ‘‘(1) QUALIFIED HIGH RISK POOL.—The term 

2 ‘qualified high risk pool’ has the meaning given such 

3 term in section 2744(c)(2), except that a State may 

4 elect to meet the requirement of subparagraph (A) 

5 of such section (insofar as it requires the provision 

6 of coverage to all eligible individuals) through pro7 viding for the enrollment of eligible individuals 

8 through an acceptable alternative mechanism (as de9 fined for purposes of section 2744) that includes a 

10 high risk pool as a component. 

11 ‘‘(2) STANDARD RISK RATE.—The term ‘stand12 ard risk rate’ means a rate that—

13 ‘‘(A) is determined under the State high 

14 risk pool by considering the premium rates 

15 charged by other health insurers offering health 

16 insurance coverage to individuals in the insur17 ance market served; 

18 ‘‘(B) is established using reasonable actu19 arial techniques; and 

20 ‘‘(C) reflects anticipated claims experience 

21 and expenses for the coverage involved. 

22 ‘‘(3) STATE.—The term ‘State’ means any of 

23 the 50 States and the District of Columbia.’’. 
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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to grants for fiscal 

3 years beginning with fiscal year 2005. 

4 (c) CHANGE IN ALLOTMENT FORMULA FOR OPER5 ATIONAL GRANTS.—Subsection (b)(2) of such section is 

6 amended—

7 (1) by inserting ‘‘(before fiscal year 2005)’’ 

8 after ‘‘for a fiscal year’’; and 

9 (2) by adding at the end the following: ‘‘The 

10 amount appropriated under subsection (c)(2) for a 

11 fiscal year beginning with fiscal year 2005 (less the 

12 portion of such amount amount made available to 

13 carry out subsection (f)) shall be made available to 

14 the States (including entities that operate the high 

15 risk pool under applicable State law in a State) that 

16 qualify for a grant under subsection (b) as follows: 

‘‘(A) An amount equal to 1 17 ⁄3 of such 

18 amount shall be allocated in equal amounts 

19 among such qualifying States. 

‘‘(B) An amount equal to 1 20 ⁄3 of such 

21 amount shall be allocated among such States so 

22 that the amount provided to a State bears the 

23 same ratio to such available amount as the 

24 number of uninsured individuals in the State 

25 bears to the total number of uninsured individ-
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1 uals in all such States (as determined by the 

2 Secretary). 

‘‘(C) An amount equal to 1 3 ⁄3 of such 

4 amount shall be allocated among such States so 

5 that the amount provided to a State bears the 

6 same ratio to such available amount as the 

7 number of individuals enrolled in health care 

8 coverage through the qualified high risk pool of 

9 the State bears to the total number of individ10 uals so enrolled through qualified high risk 

11 pools in all such States (as determined by the 

12 Secretary).’’. 

13 (d) ADMINISTRATIVE PROVISIONS; ANNUAL RE14 PORT.—Such section is amended by adding at the end the 

15 following new subsection: 

16 ‘‘(e) ADMINISTRATIVE PROVISIONS; ANNUAL RE17 PORT.—

18 ‘‘(1) APPLICATIONS.—To be eligible for a grant 

19 under this section, a State shall submit to the Sec20 retary an application at such time, in such manner, 

21 and containing such information as the Secretary 

22 may require. 

23 ‘‘(2) NO ENTITLEMENT.—Nothing in this sec24 tion shall be construed as providing a State with an 

25 entitlement to a grant under this section. 
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1 ‘‘(3) ANNUAL REPORT.—The Secretary shall 

2 submit to Congress an annual report on grants pro3 vided under this section. Each such report shall in4 clude information on the distribution of such grants 

5 among the States and the use of grant funds by 

6 States.’’. 

7 (e) BONUS GRANTS FOR SUPPLEMENTAL CONSUMER

8 BENEFITS.—Such section is further amended—

9 (1) in subsection (c)(2), as added by subsection 

10 (a), by adding at the end the following: ‘‘Of the 

11 amount appropriated under the preceding sentence 

12 for fiscal year 2005, up to 50 percent shall be avail13 able for the purpose of carrying out subsection (f).’’; 

14 and 

15 (2) by adding at the end the following new sub16 section: 

17 ‘‘(f) BONUS GRANTS FOR SUPPLEMENTAL CON18 SUMER BENEFITS.—

19 ‘‘(1) IN GENERAL.—In the case of each State 

20 that has established a qualified high risk pool, the 

21 Secretary shall provide, from the funds made avail22 able under subsection (c)(2) to carry out this sub23 section, a grant to be used to provide supplemental 

24 consumer benefits to enrollees or potential enrollees 
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1 (or defined subsets of such enrollees or potential en2 rollees) in qualified high risk pools. 

3 ‘‘(2) BENEFITS.—Funds provided to a State 

4 under paragraph (1) may be used only to provide 

5 one or more of the following benefits: 

6 ‘‘(A) Low-income premium subsidies. 

7 ‘‘(B) A reduction in premium trends, ac8 tual premiums, or other cost-sharing require9 ments. 

10 ‘‘(C) An expansion or broadening of the 

11 pool of individuals eligible for coverage, such as 

12 through eliminating waiting lists, increasing en13 rollment caps, or providing flexibility in enroll14 ment rules. 

15 ‘‘(3) LIMITATION.—In no case shall the amount 

16 of a grant under this subsection to a State, from the 

17 amount made available under subsection (c)(2) for a 

18 fiscal year to carry out this subsection, exceed 10 

19 percent of the amount so made available. 

20 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in 

21 this subsection shall be construed to prohibit a State 

22 that, on the date of enactment of this subsection, is 

23 in the process of implementing programs to provide 

24 benefits of the type described in paragraph (2), from 

25 being eligible for a grant under this subsection. 
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1 ‘‘(5) FUNDING.—

2 ‘‘(A) AVAILABILITY.—Funds appropriated 

3 under this subsection for a fiscal year shall re4 main available for obligation through the end of 

5 the following fiscal year. 

6 ‘‘(B) REALLOTMENT.—If, on June 30 of a 

7 fiscal year for which funds are made available 

8 under this subsection, the Secretary determines 

9 that the full amounts will not be made available 

10 for grants under this subsection, such remain11 ing amounts shall be made available and allot12 ted among qualifying States under subsection 

13 (b) for the fiscal year in accordance with the 

14 formula under subsection (b)(2).’’.

Passed the House of Representatives July 27, 2005. 

Attest:

Clerk. 

109TH CONGRESS 

1ST SESSION H. R. 3204

AN ACT

To amend title XXVII of the Public Health Service 

surance pools. ment and operation of State high risk health inAct to extend Federal funding for the establish-