State High Risk Pool Funding Extension Act of 2006
PL 109-172 (H.R.4519), enacted 02/10/2006

120 STAT. 185
PUBLIC LAW 109–172—FEB. 10, 2006
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 estab-
lished 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]
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120 STAT. 186
PUBLIC LAW 109–172—FEB. 10, 2006
‘‘(A) An amount equal to 40 percent of such appro-
priated 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 appro-
priated 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 unin-
sured individuals (as determined by the Secretary) in all
qualifying States that so apply.
‘‘(C) An amount equal to 30 percent of such appro-
priated 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
PRE-
MIUMS.—In the case of a qualified high risk pool of a State
which charges premiums that exceed 150 percent of the pre-
mium 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 sub-
section (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 individ-
uals eligible for coverage, such as through eliminating
waiting lists, increasing enrollment caps, or providing flexi-
bility in enrollment rules.
‘‘(D) Less stringent rules, or additional waiver
authority, with respect to coverage of pre-existing condi-
tions.
‘‘(E) Increased benefits.
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PUBLIC LAW 109–172—FEB. 10, 2006
‘‘(F) The establishment of disease management pro-
grams.
‘‘(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 para-
graph (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 sub-
section (b)(2); and
‘‘(B) one-third of the amount appropriated for a fiscal
year shall be made available for allotments under sub-
section (c)(3).
‘‘(3) AVAILABILITY.—Funds appropriated for purposes of car-
rying 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
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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.
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 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—
‘‘(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 tech-
niques; 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 Mar-
iana Islands.’’.
Approved February 10, 2006.
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