II 

Calendar No. 2 

109TH CONGRESS 

1ST SESSION S. 288 

To extend Federal funding for operation of State high risk health insurance 

pools. 

IN THE SENATE OF THE UNITED STATES 

Mr. GREGG (for himself, Mr. BAUCUS, Mr. DEWINE, Mr. BINGAMAN, Mr. 

ROBERTS, Mr. LIEBERMAN, Mr. COCHRAN, and Mr. ENZI) introduced the 

following bill; which was read twice and referred to the Committee on 

Health, Education, Labor, and Pensions 

FEBRUARY 10, 2005 

Reported by Mr. ENZI, with an amendment 

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

A BILL 

To extend Federal funding for 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’’. 
2 

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1 SEC. 2. EXTENSION OF FUNDING FOR OPERATION OF 

2 STATE HIGH RISK HEALTH INSURANCE 

3 POOLS. 

4 (a) EXTENSION OF SEED GRANTS.—Section 2745 of 

5 the Public Health Service Act (42 U.S.C. 300gg–45) is 

6 amended— 

7 (1) in subsection (a), in the subsection heading 

8 by inserting ‘‘EXTENSION OF’’ before ‘‘SEED’’; and 

9 (2) in subsection (c)(1), by striking 

10 ‘‘$20,000,000’’ and all that follows through ‘‘2003’’ 

11 and inserting ‘‘$15,000,000 for the period of fiscal 

12 years 2005 and 2006’’. 

13 (b) FUNDS FOR OPERATIONS.—Section 2745 of the 

14 Public Health Service Act (42 U.S.C. 300gg–45) is 

15 amended— 

16 (1) in subsection (b)— 

17 (A) in the subsection heading by striking 

18 ‘‘MATCHING’’; and 

19 (B) by striking paragraph (2) and insert20 ing the following: 

21 ‘‘(2) ALLOTMENT.—The amounts appropriated 

22 under subsection (c)(2) for a fiscal year shall be 

23 made available to the States (or the entities that op24 erate the high risk pool under applicable State law) 

25 as follows: 
3 

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1 ‘‘(A) An amount equal to 50 percent of the 

2 appropriated amount for the fiscal year shall be 

3 allocated in equal amounts among each eligible 

4 State that applies for assistance under this sub5 section. 

6 ‘‘(B) An amount equal to 25 percent of the 

7 appropriated amount for the fiscal year shall be 

8 allocated among the States so that the amount 

9 provided to a State bears the same ratio to 

10 such available amount as the number of unin11 sured individuals in the State bears to the total 

12 number of uninsured individuals in all States 

13 (as determined by the Secretary). 

14 ‘‘(C) An amount equal to 25 percent of the 

15 appropriated amount for the fiscal year shall be 

16 allocated among the States so that the amount 

17 provided to a State bears the same ratio to 

18 such available amount as the number of individ19 uals enrolled in health care coverage through 

20 the qualified high risk pool of the State bears 

21 to the total number of individuals so enrolled 

22 through qualified high risk pools in all States 

23 (as determined by the Secretary).’’; and 

24 (2) in subsection (c)(2), by striking 

25 ‘‘$40,000,000’’ and all that follows through the pe-
4 

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1 riod and inserting ‘‘$75,000,000 for each of fiscal 

2 years 2005 through 2009 to make allotments under 

3 subsection (b)(2).’’. 

4 (c) DEFINITIONS.—Section 2745 of the Public 

5 Health Service Act (42 U.S.C. 300gg–45) is amended— 

6 (1) in subsection (d), by inserting after 

7 ‘‘2744(c)(2)’’ the following: ‘‘, except that with re8 spect to subparagraph (A) of such section a State 

9 may elect to provide for the enrollment of eligible in10 dividuals through an acceptable alternative mecha11 nism,’’; and 

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

13 ‘‘(e) STANDARD RISK RATE.—In subsection 

14 (b)(1)(A), the term ‘standard risk rate’ means a rate— 

15 ‘‘(1) determined under the State high risk pool 

16 by considering the premium rates charged by other 

17 health insurers offering health insurance coverage to 

18 individuals in the insurance market served; 

19 ‘‘(2) that is established using reasonable actu20 arial techniques; and 

21 ‘‘(3) that reflects anticipated claims experience 

22 and expenses for the coverage involved.’’. 

23 SECTION 1. SHORT TITLE. 

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

25 Funding Extension Act of 2005’’. 
5 

•S 288 RS 

1 SEC. 2. EXTENSION OF FUNDING FOR OPERATION OF 

2 STATE HIGH RISK HEALTH INSURANCE 

3 POOLS. 

4 Section 2745 of the Public Health Service Act (42 

5 U.S.C. 300gg–45) is amended to read as follows: 

6 ‘‘SEC. 2745. PROMOTION OF QUALIFIED HIGH RISK POOLS. 

7 ‘‘(a) EXTENSION OF SEED GRANTS TO STATES.—The 

8 Secretary shall provide from the funds appropriated under 

9 subsection (d)(1)(A) a grant of up to $1,000,000 to each 

10 State that has not created a qualified high risk pool as of 

11 the date of enactment of this section for the State’s costs 

12 of creation and initial operation of such a pool. 

13 ‘‘(b) GRANTS FOR OPERATIONAL LOSSES.— 

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

15 has established a qualified high risk pool that— 

16 ‘‘(A) restricts premiums charged under the 

17 pool to no more than 150 percent of the premium 

18 for applicable standard risk rates; 

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

20 options through the pool; and 

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

22 designed to ensure continued funding of losses in23 curred by the State after the end of fiscal year 

24 2004 in connection with operation of the pool; 

25 the Secretary shall provide, from the funds appro26 priated under subsection (d)(1)(B)(i) and allotted to 
6 

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

2 incurred by the State in connection with the oper3 ation of the pool. 

4 ‘‘(2) ALLOTMENT.—The amounts appropriated 

5 under subsection (d)(1)(B)(i) for a fiscal year shall be 

6 made available to the States (or the entities that oper7 ate the high risk pool under applicable State law) as 

8 follows: 

9 ‘‘(A) An amount equal to 50 percent of the 

10 appropriated amount for the fiscal year shall be 

11 allocated in equal amounts among each eligible 

12 State that applies for assistance under this sub13 section. 

14 ‘‘(B) An amount equal to 25 percent of the 

15 appropriated amount for the fiscal year shall be 

16 allocated among the States so that the amount 

17 provided to a State bears the same ratio to such 

18 available amount as the number of uninsured in19 dividuals in the State bears to the total number 

20 of uninsured individuals in all States (as deter21 mined by the Secretary). 

22 ‘‘(C) An amount equal to 25 percent of the 

23 appropriated amount for the fiscal year shall be 

24 allocated among the States so that the amount 

25 provided to a State bears the same ratio to such 
7 

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1 available amount as the number of individuals 

2 enrolled in health care coverage through the 

3 qualified high risk pool of the State bears to the 

4 total number of individuals so enrolled through 

5 qualified high risk pools in all States (as deter6 mined by the Secretary). 

7 ‘‘(c) BONUS GRANTS FOR SUPPLEMENTAL CONSUMER

8 BENEFITS.— 

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

10 has established a qualified high risk pool, the Sec11 retary shall provide, from the funds appropriated 

12 under subsection (d)(1)(B)(ii) and allotted to the 

13 State under paragraph (3), a grant to be used to pro14 vide supplemental consumer benefits to enrollees or 

15 potential enrollees (or defined subsets of such enrollees 

16 or potential enrollees) in qualified high risk pools. 

17 ‘‘(2) BENEFITS.—A State shall use amounts re18 ceived under a grant under this subsection to provide 

19 one or more of the following benefits: 

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

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

22 premiums, or other cost-sharing requirements. 

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

24 pool of individuals eligible for coverage, includ25 ing eliminating waiting lists, increasing enroll-
8 

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1 ment caps, or providing flexibility in enrollment 

2 rules. 

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

4 waiver authority, with respect to coverage of pre5 existing conditions. 

6 ‘‘(E) Increased benefits. 

7 ‘‘(F) The establishment of disease manage8 ment programs. 

9 ‘‘(3) LIMITATION.—In allotting amounts under 

10 this subsection, the Secretary shall ensure that no 

11 State receives an amount that exceeds 10 percent of 

12 the amount appropriated for the fiscal year involved 

13 under subsection (d)(1)(B)(ii). 

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

15 subsection shall be construed to prohibit States that, 

16 on the date of enactment of the State High Risk Pool 

17 Funding Extension Act of 2005, are in the process of 

18 implementing programs to provide benefits of the type 

19 described in paragraph (2), from being eligible for a 

20 grant under this subsection. 

21 ‘‘(d) FUNDING.— 

22 ‘‘(1) IN GENERAL.—Out of any money in the 

23 Treasury of the United States not otherwise appro24 priated, there are authorized and appropriated— 
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1 ‘‘(A) $15,000,000 for the period of fiscal 

2 years 2005 and 2006 to carry out subsection (a); 

3 and 

4 ‘‘(B) $75,000,000 for each of fiscal years 

5 2005 through 2009, of which— 

6 ‘‘(i) two-thirds of the amount appro7 priated for a fiscal year shall be made 

8 available for allotments under subsection 

9 (b)(2); and 

10 ‘‘(ii) one-third of the amount appro11 priated for a fiscal year shall be made 

12 available for allotments under subsection 

13 (c)(2). 

14 ‘‘(2) AVAILABILITY.—Funds appropriated under 

15 this subsection for a fiscal year shall remain available 

16 for obligation through the end of the following fiscal 

17 year. 

18 ‘‘(3) REALLOTMENT.—If, on June 30 of each fis19 cal year, the Secretary determines that all amounts 

20 appropriated under paragraph (1)(B)(ii) for the fis21 cal year are not allotted, such remaining amounts 

22 shall be allotted among States receiving grants under 

23 subsection (b) for the fiscal year in amounts deter24 mined appropriate by the Secretary. 
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1 ‘‘(4) NO ENTITLEMENT.—Nothing in this section 

2 shall be construed as providing a State with an enti3 tlement to a grant under this section. 

4 ‘‘(e) APPLICATIONS.—To be eligible for a grant under 

5 this section, a State shall submit to the Secretary an appli6 cation at such time, in such manner, and containing such 

7 information as the Secretary may require. 

8 ‘‘(f) DEFINITIONS.—In this section: 

9 ‘‘(1) QUALIFIED HIGH RISK POOL.— 

10 ‘‘(A) IN GENERAL.—The term ‘qualified 

11 high risk pool’ has the meaning given such term 

12 in section 2744(c)(2), except that with respect to 

13 subparagraph (A) of such section a State may 

14 elect to provide for the enrollment of eligible in15 dividuals through— 

16 ‘‘(i) a combination of a qualified high 

17 risk pool and an acceptable alternative 

18 mechanism; or 

19 ‘‘(ii) other health insurance coverage 

20 described in subparagraph (B). 

21 ‘‘(B) HEALTH INSURANCE COVERAGE.— 

22 Health insurance coverage described in this sub23 paragraph is individual health insurance cov24 erage— 
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1 ‘‘(i) that meets the requirements of sec2 tion 2741; 

3 ‘‘(ii) that is subject to limits on the 

4 rates charged to individuals; 

5 ‘‘(iii) that is available to all individ6 uals eligible for health insurance coverage 

7 under this title who are not able to partici8 pate in a qualified high risk pool; and 

9 ‘‘(iv) the defined rate limit of which 

10 does not exceed the limit allowed for a 

11 qualified risk pool that is otherwise eligible 

12 to receive assistance under a grant under 

13 this section. 

14 ‘‘(C) OTHER COVERAGE.—In addition to 

15 coverage described in subparagraph (B), a State 

16 may provide for the offering of health insurance 

17 coverage that provides first dollar coverage, lim18 its on cost-sharing, and comprehensive medical, 

19 hospital and surgical coverage, if the limits on 

20 rates for such coverage do not exceed 125 percent 

21 of the limit described in subparagraph (B)(iv). 

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

23 risk rate’ means a rate— 

24 ‘‘(A) determined under the State high risk 

25 pool by considering the premium rates charged 
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1 by other health insurers offering health insurance 

2 coverage to individuals in the insurance market 

3 served; 

4 ‘‘(B) that is established using reasonable ac5 tuarial techniques; and 

6 ‘‘(C) that reflects anticipated claims experi7 ence and expenses for the coverage involved. 

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

9 50 States and the District of Columbia.’’. 

Calendar No. 2 

109TH CONGRESS 

1ST SESSION S. 288 

A BILL 

To extend Federal funding for operation of State 

high risk health insurance pools. 

FEBRUARY 10, 2005 

Reported with an amendment