109TH CONGRESS 
1ST SESSION H. R. 3204
AN ACT 
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 
appropriated $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
CONSTRUC-
TION.—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 section shall be construed as providing a 
State with an entitlement to a grant under this sec-
tion.’’. 
(b) CHANGE
IN REQUIREMENTS
FOR QUALIFIED 
HIGH RISK POOLS.—
(1) CHANGE
IN
REQUIREMENT
FOR
OPER-
ATIONAL GRANTS.—Subsection (b) of such section is 
amended—
(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 
percent’’; 
(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 
HIGHER PREMIUMS.—In the case of a qualified high 
risk pool of a State which charges premiums that ex-
ceed 150 percent of the premium for applicable 
standard risks, the State shall use at least 50 per-
cent of the amount of the grant provided to carry 
out this subsection to reduce premiums for enroll-
ees.’’. 
(2) CHANGE
IN
DEFINITION
OF
QUALIFIED 
HIGH RISK POOL.—Subsection (d) of such section is 
amended 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 pro-
viding for the enrollment of eligible individuals 
through an acceptable alternative mechanism (as de-
fined for purposes of section 2744) that includes a 
high risk pool as a component. 
‘‘(2) STANDARD RISK RATE.—The term ‘stand-
ard 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 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 uninsured individuals in the State 
bears to the total number of uninsured individ-
uals 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 individuals enrolled in health care 
coverage through the qualified high risk pool of 
the State bears to the total number of individ-
uals so enrolled through qualified high risk 
pools in all such States (as determined by the 
Secretary).’’. 
(d) ADMINISTRATIVE
PROVISIONS; ANNUAL
RE-
PORT.—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 sec-
tion shall be construed as providing a State with an 
entitlement to a grant under this section.
‘‘(3) ANNUAL
REPORT.—The Secretary shall 
submit to Congress an annual report on grants pro-
vided under this section. Each such report shall in-
clude information 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 avail-
able 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 CON-
SUMER BENEFITS.—
‘‘(1) IN GENERAL.—In the case of each State 
that has established a qualified high risk pool, the 
Secretary shall provide, from the funds made avail-
able under subsection (c)(2) to carry out this sub-
section, a grant to be used to provide supplemental 
consumer benefits to enrollees or potential enrollees
(or defined subsets of such enrollees or potential en-
rollees) 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, ac-
tual premiums, or other cost-sharing require-
ments. 
‘‘(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 
percent 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 eligible 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 remain-
ing amounts shall be made available and allot-
ted among qualifying States under subsection 
(b) for the fiscal year in accordance with the 
formula under subsection (b)(2).’’.
Passed the House of Representatives July 27, 2005. 
Attest:
Clerk.
109TH CONGRESS 
1ST SESSION 
H. R. 3204
AN ACT 
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.