[109th Congress Public Law 172]
[From the U.S. Government Printing Office]


[DOCID: f:publ172.109]

[[Page 120 STAT. 185]]

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. <<NOTE: Feb. 10, 
                         2006 -  [H.R. 4519]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress <<NOTE: State High Risk Pool 
Funding Extension Act of 2006. 42 USC 201 note.>> 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 
        established 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:

[[Page 120 STAT. 186]]

                    ``(A) An amount equal to 40 percent of such 
                appropriated 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 
                appropriated 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 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 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 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 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 
        subsection (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 
                individuals eligible for coverage, such as through 
                eliminating waiting lists, increasing enrollment caps, 
                or providing flexibility in enrollment rules.
                    ``(D) Less stringent rules, or additional waiver 
                authority, with respect to coverage of pre-existing 
                conditions.
                    ``(E) Increased benefits.

[[Page 120 STAT. 187]]

                    ``(F) The establishment of disease management 
                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 
        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 
                subsection (b)(2); and
                    ``(B) one-third of the amount appropriated for a 
                fiscal year shall be made available for allotments 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 
        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

[[Page 120 STAT. 188]]

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 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 
                techniques; 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 Mariana 
        Islands.''.

    Approved February 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.

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