IB 

Union Calendar No. 116 

109TH CONGRESS 

1ST SESSION H. R. 3204 

[Report No. 109–192] 

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 

JULY 27, 2005 

Additional sponsor: Mr. JINDAL

JULY 27, 2005 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on July 12, 2005] 

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, 
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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 Act 

9 (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 ap13 propriated $15,000,000 for fiscal year 2005. 

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

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

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

17 2005 through 2009. 

18 ‘‘(3) AVAILABILITY; RULE OF CONSTRUCTION.— 

19 Funds appropriated under this subsection for a fiscal 

20 year shall remain available for obligation through the 

21 end of the following fiscal year. Nothing in this sec22 tion shall be construed as providing a State with an 

23 entitlement to a grant under this section.’’. 

24 (b) CHANGE IN REQUIREMENTS FOR QUALIFIED HIGH

25 RISK POOLS.— 
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1 (1) CHANGE IN REQUIREMENT FOR OPERATIONAL

2 GRANTS.—Subsection (b) of such section is amend3 ed— 

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

5 200 percent in the case of a State that meets the 

6 requirements of paragraph (3))’’ after ‘‘150 per7 cent’’; 

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

9 the end of fiscal year 2004’’ and inserting ‘‘after 

10 the end of the last fiscal year for which a grant 

11 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 HIGH15 ER PREMIUMS.—In the case of a qualified high risk 

16 pool of a State which charges premiums that exceed 

17 150 percent of the premium for applicable standard 

18 risks, the State shall use at least 50 percent of the 

19 amount of the grant provided to carry out this sub20 section to reduce premiums for enrollees.’’. 

21 (2) CHANGE IN DEFINITION OF QUALIFIED HIGH

22 RISK POOL.—Subsection (d) of such section is amend23 ed to read as follows: 

24 ‘‘(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) of 

5 such section (insofar as it requires the provision of 

6 coverage to all eligible individuals) through providing 

7 for the enrollment of eligible individuals through an 

8 acceptable alternative mechanism (as defined for pur9 poses of section 2744) that includes a high risk pool 

10 as a component. 

11 ‘‘(2) STANDARD RISK RATE.—The term ‘standard 

12 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 the 

23 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)’’ after 

8 ‘‘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 made available to carry out 

13 subsection (f)) shall be made available to the States 

14 (including entities that operate the high risk pool 

15 under applicable State law in a State) that qualify 

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

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

18 shall be allocated in equal amounts among such 

19 qualifying States. 

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

21 shall be allocated among such States so that the 

22 amount provided to a State bears the same ratio 

23 to such available amount as the number of unin24 sured individuals in the State bears to the total 
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1 number of uninsured individuals in all such 

2 States (as determined by the Secretary). 

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

4 shall be allocated among such States so that the 

5 amount provided to a State bears the same ratio 

6 to such available amount as the number of indi7 viduals enrolled in health care coverage through 

8 the qualified high risk pool of the State bears to 

9 the total number of individuals so enrolled 

10 through qualified high risk pools in all such 

11 States (as determined by the Secretary).’’. 

12 (d) ADMINISTRATIVE PROVISIONS; ANNUAL REPORT.— 

13 Such section is amended by adding at the end the following 

14 new subsection: 

15 ‘‘(e) ADMINISTRATIVE PROVISIONS; ANNUAL RE16 PORT.— 

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

18 under this section, a State shall submit to the Sec19 retary an application at such time, in such manner, 

20 and containing such information as the Secretary 

21 may require. 

22 ‘‘(2) NO ENTITLEMENT.—Nothing in this section 

23 shall be construed as providing a State with an enti24 tlement to a grant under this section. 
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1 ‘‘(3) ANNUAL REPORT.—The Secretary shall sub2 mit to Congress an annual report on grants provided 

3 under this section. Each such report shall include in4 formation on the distribution of such grants among 

5 the States and the use of grant funds by States.’’. 

6 (e) BONUS GRANTS FOR SUPPLEMENTAL CONSUMER

7 BENEFITS.—Such section is further amended— 

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

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

10 amount appropriated under the preceding sentence for 

11 fiscal year 2005, up to 50 percent shall be available 

12 for the purpose of carrying out subsection (f).’’; and 

13 (2) by adding at the end the following new sub14 section: 

15 ‘‘(f) BONUS GRANTS FOR SUPPLEMENTAL CONSUMER

16 BENEFITS.— 

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

18 has established a qualified high risk pool, the Sec19 retary shall provide, from the funds made available 

20 under subsection (c)(2) to carry out this subsection, a 

21 grant to be used to provide supplemental consumer 

22 benefits to enrollees or potential enrollees (or defined 

23 subsets of such enrollees or potential enrollees) in 

24 qualified high risk pools. 
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1 ‘‘(2) BENEFITS.—Funds provided to a State 

2 under paragraph (1) may be used only to provide one 

3 or more of the following benefits: 

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

5 ‘‘(B) A reduction in premium trends, actual 

6 premiums, or other cost-sharing requirements. 

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

8 pool of individuals eligible for coverage, such as 

9 through eliminating waiting lists, increasing en10 rollment caps, or providing flexibility in enroll11 ment rules. 

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

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

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

15 fiscal year to carry out this subsection, exceed 10 per16 cent of the amount so made available. 

17 ‘‘(4) RULE OF CONSTRUCTION.—Nothing in this 

18 subsection shall be construed to prohibit a State that, 

19 on the date of enactment of this subsection, is in the 

20 process of implementing programs to provide benefits 

21 of the type described in paragraph (2), from being eli22 gible for a grant under this subsection. 

23 ‘‘(5) FUNDING.— 

24 ‘‘(A) AVAILABILITY.—Funds appropriated 

25 under this subsection for a fiscal year shall re-
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1 main available for obligation through the end of 

2 the following fiscal year. 

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

4 fiscal year for which funds are made available 

5 under this subsection, the Secretary determines 

6 that the full amounts will not be made available 

7 for grants under this subsection, such remaining 

8 amounts shall be made available and allotted 

9 among qualifying States under subsection (b) for 

10 the fiscal year in accordance with the formula 

11 under subsection (b)(2).’’. 
Union Calendar No. 116 

109TH CONGRESS 

1ST SESSION H. R. 3204 

[Report No. 109–192] 

A BILL 

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 establishJULY 27, 2005 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union,