I 

109TH CONGRESS 

1ST SESSION H. R. 3204 

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. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 12, 2005 

Mr. SHADEGG (for himself and Mr. TOWNS) introduced the following bill; 

which was referred to the Committee on Energy and Commerce 

A BILL 

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, 

3 SECTION 1. SHORT TITLE. 

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

5 Funding Extension Act of 2005’’. 
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1 SEC. 2. EXTENSION OF FUNDING FOR ESTABLISHMENT AND 

2 OPERATION OF STATE HIGH RISK HEALTH IN3 SURANCE POOLS. 

4 (a) ADDITIONAL SEED GRANT FUNDING.—Sub5 section (c)(1) of section 2745 of the Public Health Service 

6 Act (42 U.S.C. 300gg–45) is amended by inserting ‘‘and 

7 $15,000,000 for fiscal year 2005’’ after ‘‘fiscal year 

8 2003’’. 

9 (b) FUNDING FOR OPERATION OF STATE HIGH RISK

10 POOLS IN FISCAL YEARS 2005 THROUGH 2009.—Sub11 section (c)(2) of such section is amended by inserting ‘‘and 

12 $50,000,000 for each of fiscal years 2005 through 2009’’ 

13 after ‘‘2004’’. 

14 (c) CHANGE IN REQUIREMENTS FOR QUALIFIED

15 HIGH RISK POOLS.— 

16 (1) CHANGE IN REQUIREMENT FOR OPER17 ATIONAL GRANTS.—Subsection (b) of such section is 

18 amended— 

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

20 200 percent in the case of a State that meets 

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

22 percent’’; 

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

24 the end of fiscal year 2004’’ and inserting 

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

26 a grant is provided under this paragraph’’; and 
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1 (C) by adding at the end the following new 

2 paragraph: 

3 ‘‘(3) SPECIAL RULE FOR POOLS CHARGING

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

5 risk pool of a State which charges premiums that ex6 ceed 150 percent of the premium for applicable 

7 standard risks, the State shall use at least 50 per8 cent of the amount of the grant provided to carry 

9 out this subsection to reduce premiums for enroll10 ees.’’. 

11 (2) CHANGE IN DEFINITION OF QUALIFIED

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

13 amended to read as follows: 

14 ‘‘(d) DEFINITIONS.—In this section: 

15 ‘‘(1) QUALIFIED HIGH RISK POOL.—The term 

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

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

18 elect to meet the requirement of subparagraph (A) 

19 of such section (insofar as it requires the provision 

20 of coverage to all eligible individuals) through pro21 viding for the enrollment of eligible individuals 

22 through an acceptable alternative mechanism (as de23 fined for purposes of section 2744) that includes a 

24 high risk pool as a component. 
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1 ‘‘(2) STANDARD RISK RATE.—The term ‘stand2 ard risk rate’ means a rate that— 

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

4 risk pool by considering the premium rates 

5 charged by other health insurers offering health 

6 insurance coverage to individuals in the insur7 ance market served; 

8 ‘‘(B) is established using reasonable actu9 arial techniques; and 

10 ‘‘(C) reflects anticipated claims experience 

11 and expenses for the coverage involved. 

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

13 the 50 States and the District of Columbia.’’. 

14 (3) EFFECTIVE DATE.—The amendments made 

15 by this subsection shall apply to grants for fiscal 

16 years beginning with fiscal year 2005. 

17 (d) CHANGE IN ALLOTMENT FORMULA FOR OPER18 ATIONAL GRANTS.—Subsection (b)(2) of such section is 

19 amended— 

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

21 after ‘‘for a fiscal year’’; and 

22 (2) by adding at the end the following: 

23 ‘‘The amount appropriated under subsection (c)(2) for a 

24 fiscal year beginning with fiscal year 2005 (less the por25 tion of such amount made available to carryout subsection 
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1 (f)) shall be made available to the States (including enti2 ties that operate the high risk pool under applicable State 

3 law in a State) that qualify for a grant under subsection 

4 (b) as follows: 

‘‘(A) An amount equal to 1 5 ⁄3 of such 

6 amount shall be allocated in equal amounts 

7 among such qualifying States. 

‘‘(B) An amount equal to 1 8 ⁄3 of such 

9 amount shall be allocated among such States so 

10 that the amount provided to a State bears the 

11 same ratio to such available amount as the 

12 number of uninsured individuals in the State 

13 bears to the total number of uninsured individ14 uals in all such States (as determined by the 

15 Secretary). 

‘‘(C) An amount equal to 1 16 ⁄3 of such 

17 amount shall be allocated among such States so 

18 that the amount provided to a State bears the 

19 same ratio to such available amount as the 

20 number of individuals enrolled in health care 

21 coverage through the qualified high risk pool of 

22 the State bears to the total number of individ23 uals so enrolled through qualified high risk 

24 pools in all such States (as determined by the 

25 Secretary).’’. 
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1 (e) ADMINISTRATIVE PROVISIONS; ANNUAL RE2 PORT.—Such section is amended by adding at the end the 

3 following new subsection: 

4 ‘‘(e) ADMINISTRATIVE PROVISIONS; ANNUAL RE5 PORT.— 

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

7 under this section, a State shall submit to the Sec8 retary an application at such time, in such manner, 

9 and containing such information as the Secretary 

10 may require. 

11 ‘‘(2) NO ENTITLEMENT.—Nothing in this sec12 tion shall be construed as providing a State with an 

13 entitlement to a grant under this section. 

14 ‘‘(3) ANNUAL REPORT.—The Secretary shall 

15 submit to Congress an annual report on grants pro16 vided under this section. Each such report shall in17 clude information on the distribution of such grants 

18 among the States and the use of grant funds by 

19 States.’’. 

20 (f) BONUS GRANTS FOR SUPPLEMENTAL CONSUMER

21 BENEFITS.—Such section is further amended— 

22 (1) in subsection (c)(2), as amended by sub23 section (b), by inserting before the period at the end 

24 the following: ‘‘, and up to 10 percent of the amount 
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1 appropriated for fiscal year 2005 shall be available 

2 to carry out subsection (f)’’; and 

3 (2) by adding at the end the following new sub4 section: 

5 ‘‘(f) BONUS GRANTS FOR SUPPLEMENTAL CON6 SUMER BENEFITS.— 

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

8 that has established a qualified high risk pool, the 

9 Secretary shall provide, from the funds made avail10 able under subsection (c)(2) to carry out this sub11 section, a grant to be used to provide supplemental 

12 consumer benefits to enrollees or potential enrollees 

13 (or defined subsets of such enrollees or potential en14 rollees) in qualified high risk pools. 

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

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

17 one or more of the following benefits: 

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

19 ‘‘(B) A reduction in premium trends, ac20 tual premiums, or other cost-sharing require21 ments. 

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

23 pool of individuals eligible for coverage, such as 

24 through eliminating waiting lists, increasing en-
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1 rollment caps, or providing flexibility in enroll2 ment rules. 

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

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

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

6 fiscal year to carry out this subsection, exceed 10 

7 percent of the amount so made available. 

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

9 this subsection shall be construed to prohibit a State 

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

11 in the process of implementing programs to provide 

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

13 being eligible for a grant under this subsection. 

14 ‘‘(5) FUNDING.— 

15 ‘‘(A) AVAILABILITY.—Funds appropriated 

16 under this subsection for a fiscal year shall re17 main available for obligation through the end of 

18 the following fiscal year. 

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

20 fiscal year for which funds are made available 

21 under this subsection, the Secretary determines 

22 that the full amounts will not be made available 

23 for grants under this subsection, such remain24 ing amounts shall be made available and allot25 ted among qualifying States under subsection 
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1 (b) for the fiscal year in accordance with the 

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

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