I 
109TH CONGRESS 
1ST SESSION H. R. 4519 
To amend the Public Health Service Act to extend funding for the operation 
of State high risk health insurance pools. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 13, 2005 
Mr. SHADEGG introduced the following bill; which was referred to the 
Committee on Energy and Commerce 
A BILL 
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 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 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 Exten-
sion Act of 2005 for the State’s costs of creation and ini-
tial 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 pre-
mium for applicable standard risk rates; 
‘‘(B) offers a choice of two or more cov-
erage 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 oper-
ation 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 appro-
priated under paragraphs (1)(B)(i) and (2)(A) of 
subsection (d) and allotted to the State under para-
graph (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: 
‘‘(A) An amount equal to 40 percent of 
such appropriated amount for the fiscal year 
shall be allotted in equal amounts to each quali-
fying 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 allot-
ted to such a State bears the same ratio to such 
appropriated amount as the number of unin-
sured 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 allot-
ted to a State bears the same ratio to such ap-
propriated 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 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 the 
State to carry out this subsection to reduce pre-
miums 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 CON-
SUMER 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 sub-
section (d) and allotted to the State under para-
graph (3), a grant to be used to provide supple-
mental consumer benefits to enrollees or potential 
enrollees (or defined subsets of such enrollees or po-
tential enrollees) in qualified high risk pools. 
‘‘(2) BENEFITS.—A State shall use amounts re-
ceived under a grant under this subsection to pro-
vide 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.
‘‘(D) Less stringent rules, or additional 
waiver authority, with respect to coverage of 
pre-existing conditions. 
‘‘(E) Increased benefits. 
‘‘(F) The establishment of disease manage-
ment 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 2005, is in the 
process of implementing a program to provide bene-
fits 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 appro-
priated shall be made available for allot-
ments under subsection (b)(2); and 
‘‘(ii) one-third of the amount appro-
priated shall be made available for allot-
ments under subsection (c)(3). 
‘‘(2) AUTHORIZATION OF APPROPRIATIONS FOR 
FISCAL YEARS 2007 THROUGH 2010.—There are au-
thorized 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 appro-
priated 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 al-
lotments under 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 remain-
ing 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 sec-
tion 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 appli-
cation 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 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 com-
ponent. 
‘‘(2) STANDARD RISK RATE.—The term ‘stand-
ard 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 insur-
ance coverage to individuals in the insurance 
market served; 
‘‘(B) that is established using reasonable 
actuarial techniques; and 
‘‘(C) that reflects anticipated claims expe-
rience and expenses for the coverage involved. 
‘‘(3) STATE.—The term ‘State’ means any of 
the 50 States and the District of Columbia and in-
cludes Puerto Rico, the Virgin Islands, Guam,
American Samoa, and the Northern Mariana Is-
lands.’’. 
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