PUBLIC LAW 109–172—FEB. 10, 2006 120 STAT. 185

Public Law 109–172

109th Congress

An Act

To amend the Public Health Service Act to extend funding for the operation of

State high risk health insurance pools.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

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

Extension Act of 2006’’.

SEC. 2. EXTENSION OF FUNDING FOR OPERATION OF STATE HIGH

RISK HEALTH INSURANCE POOLS.

Section 2745 of the Public Health Service Act (42 U.S.C. 300gg–

45) is amended to read as follows:

‘‘SEC. 2745. RELIEF FOR HIGH RISK POOLS.

‘‘(a) SEED GRANTS TO STATES.—The Secretary shall provide

from the funds appropriated under subsection (d)(1)(A) a grant

of up to $1,000,000 to each State that has not created a qualified

high risk pool as of the date of enactment of the State High

Risk Pool Funding Extension Act of 2006 for the State’s costs

of creation and initial operation of such a pool.

‘‘(b) GRANTS FOR OPERATIONAL LOSSES.—

‘‘(1) IN GENERAL.—In the case of a State that has established a qualified high risk pool that—

‘‘(A) restricts premiums charged under the pool to no

more than 200 percent of the premium for applicable

standard risk rates;

‘‘(B) offers a choice of two or more coverage options

through the pool; and

‘‘(C) has in effect a mechanism reasonably designed

to ensure continued funding of losses incurred by the State

in connection with operation of the pool after the end

of the last fiscal year for which a grant is provided under

this paragraph;

the Secretary shall provide, from the funds appropriated under

paragraphs (1)(B)(i) and (2)(A) of subsection (d) and allotted

to the State under paragraph (2), a grant for the losses incurred

by the State in connection with the operation of the pool.

‘‘(2) ALLOTMENT.—Subject to paragraph (4), the amounts

appropriated under paragraphs (1)(B)(i) and (2)(A) of subsection

(d) for a fiscal year shall be allotted and made available to

the States (or the entities that operate the high risk pool

under applicable State law) that qualify for a grant under

paragraph (1) as follows:

State High Risk

Pool Funding

Extension Act

of 2006.

42 USC 201 note.

Feb. 10, 2006

[H.R. 4519]

120 STAT. 186 PUBLIC LAW 109–172—FEB. 10, 2006

‘‘(A) An amount equal to 40 percent of such appropriated amount for the fiscal year shall be allotted in

equal amounts to each qualifying State that is one of

the 50 States or the District of Columbia and that applies

for a grant under this subsection.

‘‘(B) An amount equal to 30 percent of such appropriated amount for the fiscal year shall be allotted among

qualifying States that apply for such a grant so that the

amount allotted to such a State bears the same ratio to

such appropriated amount as the number of uninsured

individuals in the State bears to the total number of uninsured individuals (as determined by the Secretary) in all

qualifying States that so apply.

‘‘(C) An amount equal to 30 percent of such appropriated amount for the fiscal year shall be allotted among

qualifying States that apply for such a grant so that the

amount allotted to a State bears the same ratio to such

appropriated amount as the number of individuals enrolled

in health care coverage through the qualified high risk

pool of the State bears to the total number of individuals

so enrolled through qualified high risk pools (as determined

by the Secretary) in all qualifying States that so apply.

‘‘(3) SPECIAL RULE FOR POOLS CHARGING HIGHER PREMIUMS.—In the case of a qualified high risk pool of a State

which charges premiums that exceed 150 percent of the premium for applicable standard risks, the State shall use at

least 50 percent of the amount of the grant provided to the

State to carry out this subsection to reduce premiums for

enrollees.

‘‘(4) LIMITATION FOR TERRITORIES.—In no case shall the

aggregate amount allotted and made available under paragraph

(2) for a fiscal year to States that are not the 50 States or

the District of Columbia exceed $1,000,000.

‘‘(c) BONUS GRANTS FOR SUPPLEMENTAL CONSUMER BENEFITS.—

‘‘(1) IN GENERAL.—In the case of a State that is one of

the 50 States or the District of Columbia, that has established

a qualified high risk pool, and that is receiving a grant under

subsection (b)(1), the Secretary shall provide, from the funds

appropriated under paragraphs (1)(B)(ii) and (2)(B) of subsection (d) and allotted to the State under paragraph (3), a

grant to be used to provide supplemental consumer benefits

to enrollees or potential enrollees (or defined subsets of such

enrollees or potential enrollees) in qualified high risk pools.

‘‘(2) BENEFITS.—A State shall use amounts received under

a grant under this subsection to provide one or more of the

following benefits:

‘‘(A) Low-income premium subsidies.

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

or other cost-sharing requirements.

‘‘(C) An expansion or broadening of the pool of individuals eligible for coverage, such as through eliminating

waiting lists, increasing enrollment caps, or providing flexibility in enrollment rules.

‘‘(D) Less stringent rules, or additional waiver

authority, with respect to coverage of pre-existing conditions.

‘‘(E) Increased benefits.

PUBLIC LAW 109–172—FEB. 10, 2006 120 STAT. 187

‘‘(F) The establishment of disease management programs.

‘‘(3) ALLOTMENT; LIMITATION.—The Secretary shall allot

funds appropriated under paragraphs (1)(B)(ii) and (2)(B) of

subsection (d) among States qualifying for a grant under paragraph (1) in a manner specified by the Secretary, but in no

case shall the amount so allotted to a State for a fiscal year

exceed 10 percent of the funds so appropriated for the fiscal

year.

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

shall be construed to prohibit a State that, on the date of

the enactment of the State High Risk Pool Funding Extension

Act of 2006, is in the process of implementing a program

to provide benefits of the type described in paragraph (2),

from being eligible for a grant under this subsection.

‘‘(d) FUNDING.—

‘‘(1) APPROPRIATION FOR FISCAL YEAR 2006.—There are

authorized to be appropriated for fiscal year 2006—

‘‘(A) $15,000,000 to carry out subsection (a); and

‘‘(B) $75,000,000, of which, subject to paragraph (4)—

‘‘(i) two-thirds of the amount appropriated shall

be made available for allotments under subsection

(b)(2); and

‘‘(ii) one-third of the amount appropriated shall

be made available for allotments under subsection

(c)(3).

‘‘(2) AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEARS

2007 THROUGH 2010.—There are authorized to be appropriated

$75,000,000 for each of fiscal years 2007 through 2010, of

which, subject to paragraph (4)—

‘‘(A) two-thirds of the amount appropriated for a fiscal

year shall be made available for allotments under subsection (b)(2); and

‘‘(B) one-third of the amount appropriated for a fiscal

year shall be made available for allotments under subsection (c)(3).

‘‘(3) AVAILABILITY.—Funds appropriated for purposes of carrying out this section for a fiscal year shall remain available

for obligation through the end of the following fiscal year.

‘‘(4) REALLOTMENT.—If, on June 30 of each fiscal year for

which funds are appropriated under paragraph (1)(B) or (2),

the Secretary determines that all the amounts so appropriated

are not allotted or otherwise made available to States, such

remaining amounts shall be allotted and made available under

subsection (b) among States receiving grants under subsection

(b) for the fiscal year based upon the allotment formula specified

in such subsection.

‘‘(5) NO ENTITLEMENT.—Nothing in this section shall be

construed as providing a State with an entitlement to a grant

under this section.

‘‘(e) APPLICATIONS.—To be eligible for a grant under this section,

a State shall submit to the Secretary an application at such time,

in such manner, and containing such information as the Secretary

may require.

‘‘(f) ANNUAL REPORT.—The Secretary shall submit to Congress

an annual report on grants provided under this section. Each such

120 STAT. 188 PUBLIC LAW 109–172—FEB. 10, 2006

LEGISLATIVE HISTORY—H.R. 4519:

CONGRESSIONAL RECORD:

Vol. 151 (2005): Dec. 17, considered and passed House.

Vol. 152 (2006): Feb. 1, considered and passed Senate.

Æ

report shall include information on the distribution of such grants

among States and the use of grant funds by States.

‘‘(g) DEFINITIONS.—In this section:

‘‘(1) QUALIFIED HIGH RISK POOL.— ‘‘(A) IN GENERAL.—The term ‘qualified high risk pool’

has the meaning given such term in section 2744(c)(2),

except that a State may elect to meet the requirement

of subparagraph (A) of such section (insofar as it requires

the provision of coverage to all eligible individuals) through

providing for the enrollment of eligible individuals through

an acceptable alternative mechanism (as defined for purposes of section 2744) that includes a high risk pool as

a component.

‘‘(2) STANDARD RISK RATE.—The term ‘standard risk rate’

means a rate—

‘‘(A) determined under the State high risk pool by

considering the premium rates charged by other health

insurers offering health insurance coverage to individuals

in the insurance market served;

‘‘(B) that is established using reasonable actuarial techniques; and

‘‘(C) that reflects anticipated claims experience and

expenses for the coverage involved.

‘‘(3) STATE.—The term ‘State’ means any of the 50 States

and the District of Columbia and includes Puerto Rico, the

Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.’’.

Approved February 10, 2006.