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. 
Be it enacted by the Senate and House of Representa-
tives 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 2005’’. 
SEC. 2. EXTENSION OF FUNDING FOR ESTABLISHMENT AND 
OPERATION OF STATE HIGH RISK HEALTH IN-
SURANCE POOLS. 
(a) AUTHORIZATION
OF
APPROPRIATIONS.—Sub-
section (c) of section 2745 of the Public Health Service Act 
(42 U.S.C. 300gg–45) is amended to read as follows: 
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.— 
‘‘(1) SEED GRANTS.—For the purpose of car-
rying out subsection (a), there is authorized to be ap-
propriated $15,000,000 for fiscal year 2005. 
‘‘(2) OPERATION OF POOLS.—For the purpose of 
carrying out subsection (b), there is authorized to be 
appropriated $50,000,000 for each of the fiscal years 
2005 through 2009. 
‘‘(3) AVAILABILITY; RULE OF CONSTRUCTION.— 
Funds appropriated under this subsection for a fiscal 
year shall remain available for obligation through the 
end of the following fiscal year. Nothing in this sec-
tion shall be construed as providing a State with an 
entitlement to a grant under this section.’’. 
(b) CHANGE IN REQUIREMENTS FOR QUALIFIED HIGH 
RISK POOLS.—
(1) CHANGE IN REQUIREMENT FOR OPERATIONAL 
GRANTS.—Subsection (b) of such section is amend-
ed— 
(A) in paragraph (1)(A), by inserting ‘‘(or 
200 percent in the case of a State that meets the 
requirements of paragraph (3))’’ after ‘‘150 per-
cent’’; 
(B) in paragraph (1)(C), by striking ‘‘after 
the end of fiscal year 2004’’ and inserting ‘‘after 
the end of the last fiscal year for which a grant 
is provided under this paragraph’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(3) SPECIAL RULE FOR POOLS CHARGING HIGH-
ER 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 carry out this sub-
section to reduce premiums for enrollees.’’. 
(2) CHANGE IN DEFINITION OF QUALIFIED HIGH 
RISK POOL.—Subsection (d) of such section is amend-
ed to read as follows: 
‘‘(d) DEFINITIONS.—In this section:
‘‘(1) QUALIFIED
HIGH
RISK
POOL.—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 pur-
poses of section 2744) that includes a high risk pool 
as a component. 
‘‘(2) STANDARD RISK RATE.—The term ‘standard 
risk rate’ means a rate that— 
‘‘(A) is 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 insur-
ance market served; 
‘‘(B) is established using reasonable actu-
arial techniques; and 
‘‘(C) 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.’’.
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to grants for fiscal 
years beginning with fiscal year 2005. 
(c) CHANGE
IN ALLOTMENT FORMULA
FOR OPER-
ATIONAL GRANTS.—Subsection (b)(2) of such section is 
amended— 
(1) by inserting ‘‘(before fiscal year 2005)’’ after 
‘‘for a fiscal year’’; and 
(2) by adding at the end the following: ‘‘The 
amount appropriated under subsection (c)(2) for a 
fiscal year beginning with fiscal year 2005 (less the 
portion of such amount made available to carry out 
subsection (f)) shall be made available to the States 
(including entities that operate the high risk pool 
under applicable State law in a State) that qualify 
for a grant under subsection (b) as follows: 
‘‘(A) An amount equal to 1⁄3 of such amount 
shall be allocated in equal amounts among such 
qualifying States. 
‘‘(B) An amount equal to 1⁄3 of such amount 
shall be allocated among such States so that the 
amount provided to a State bears the same ratio 
to such available amount as the number of unin-
sured individuals in the State bears to the total
number of uninsured individuals in all such 
States (as determined by the Secretary). 
‘‘(C) An amount equal to 1⁄3 of such amount 
shall be allocated among such States so that the 
amount provided to a State bears the same ratio 
to such available amount as the number of indi-
viduals 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 in all such 
States (as determined by the Secretary).’’. 
(d) ADMINISTRATIVE PROVISIONS; ANNUAL REPORT.— 
Such section is amended by adding at the end the following 
new subsection: 
‘‘(e) ADMINISTRATIVE
PROVISIONS; ANNUAL
RE-
PORT.— 
‘‘(1) APPLICATIONS.—To be eligible for a grant 
under this section, a State shall submit to the Sec-
retary an application at such time, in such manner, 
and containing such information as the Secretary 
may require. 
‘‘(2) NO ENTITLEMENT.—Nothing in this section 
shall be construed as providing a State with an enti-
tlement to a grant under this section.
‘‘(3) ANNUAL REPORT.—The Secretary shall sub-
mit to Congress an annual report on grants provided 
under this section. Each such report shall include in-
formation on the distribution of such grants among 
the States and the use of grant funds by States.’’. 
(e) BONUS GRANTS FOR SUPPLEMENTAL CONSUMER 
BENEFITS.—Such section is further amended— 
(1) in subsection (c)(2), as added by subsection 
(a), by adding at the end the following: ‘‘Of the 
amount appropriated under the preceding sentence for 
fiscal year 2005, up to 50 percent shall be available 
for the purpose of carrying out subsection (f).’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(f) BONUS GRANTS FOR SUPPLEMENTAL CONSUMER 
BENEFITS.— 
‘‘(1) IN GENERAL.—In the case of each State that 
has established a qualified high risk pool, the Sec-
retary shall provide, from the funds made available 
under subsection (c)(2) to carry out this subsection, 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.—Funds provided to a State 
under paragraph (1) may be used only 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 en-
rollment caps, or providing flexibility in enroll-
ment rules. 
‘‘(3) LIMITATION.—In no case shall the amount 
of a grant under this subsection to a State, from the 
amount made available under subsection (c)(2) for a 
fiscal year to carry out this subsection, exceed 10 per-
cent of the amount so made available. 
‘‘(4) RULE OF CONSTRUCTION.—Nothing in this 
subsection shall be construed to prohibit a State that, 
on the date of enactment of this subsection, is in the 
process of implementing programs to provide benefits 
of the type described in paragraph (2), from being eli-
gible for a grant under this subsection. 
‘‘(5) FUNDING.— 
‘‘(A) AVAILABILITY.—Funds appropriated 
under this subsection for a fiscal year shall re-
main available for obligation through the end of 
the following fiscal year. 
‘‘(B) REALLOTMENT.—If, on June 30 of a 
fiscal year for which funds are made available 
under this subsection, the Secretary determines 
that the full amounts will not be made available 
for grants under this subsection, such remaining 
amounts shall be made available and allotted 
among qualifying States under subsection (b) for 
the fiscal year in accordance with the formula 
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 
Act to extend Federal funding for the establish-
ment and operation of State high risk health in-
surance pools. 
JULY 27, 2005 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed