42 U.S.C. § 300gg–45 — Relief for high risk pools

(a) Seed grants to States: The Secretary must give up to $1,000,000 to each state that, as of February 10, 2006, has not yet set up a qualified high-risk pool. The money covers the state's cost of creating and starting the pool. (b) Grants for operational losses (1) In general: If a state has a qualified high-risk pool that (A) charges no more than 200% of the standard risk premium, (B) offers at least two coverage options, and (C) has a plan to keep funding pool losses after the grant money runs out, the Secretary must give the state a grant covering the pool's operating losses. (2) Allotment: Subject to paragraph (4), the money is divided among qualifying states this way: (A) 40% is split equally among the 50 states and D.C. that apply; (B) 30% is split based on each applying state's share of the total uninsured population among applying states; (C) 30% is split based on each applying state's share of total high-risk-pool enrollment among applying states. (3) Special rule for pools charging higher premiums: If a state's pool charges more than 150% of the standard risk premium, the state must spend at least half its grant money reducing premiums for enrollees. (4) Limitation for territories: Territories other than the 50 states and D.C. can't receive, in total, more than $1,000,000 per year under this allotment. (c) Bonus grants for supplemental consumer benefits (1) In general: A state that is one of the 50 states or D.C., has a qualified high-risk pool, and is receiving a (b)(1) grant can also get a bonus grant to provide extra consumer benefits to pool enrollees or potential enrollees. (2) Benefits: The state must use the money for one or more of: (A) low-income premium subsidies; (B) reducing premium trends, actual premiums, or cost-sharing; (C) expanding who can enroll — for example, ending waiting lists, raising enrollment caps, or adding enrollment flexibility; (D) looser preexisting-condition rules or added waiver authority; (E) increased benefits; or (F) starting disease management programs. (3) Allotment; limitation: The Secretary decides how to allot this money among qualifying states, but no state can get more than 10% of the amount appropriated for the year. (4) Rule of construction: A state already implementing this kind of benefit program as of February 10, 2006 can still qualify for a bonus grant. (d) Funding (1) Appropriation for fiscal year 2006: Congress authorized $15,000,000 for the seed grants in (a), and $75,000,000 more, split (subject to paragraph (4)) two-thirds for the operating-loss grants in (b) and one-third for the bonus grants in (c). (2) Authorization of appropriations for fiscal years 2007 through 2010: Congress authorized $75,000,000 for each year from 2007 through 2010, split the same way — two-thirds for (b) allotments, one-third for (c) allotments, subject to paragraph (4). (3) Availability: Money appropriated for a fiscal year stays available for obligation through the end of the next fiscal year. (4) Reallotment: If, by June 30 of a fiscal year, the Secretary finds that not all money appropriated under (1)(B) or (2) has been allotted or made available, the leftover is allotted among the states already getting (b) grants for that year, using the (b) allotment formula. (5) No entitlement: Nothing in this section guarantees any state a grant. (e) Applications: To be eligible, a state must apply to the Secretary in whatever form, timing, and with whatever information the Secretary requires. (f) Annual report: The Secretary must report to Congress each year on the grants given under this section, including how they were distributed among states and how states used the funds. (g) Definitions (1) Qualified high risk pool: Has the meaning given in section 300gg–44(c)(2), except a state may meet the "coverage for all eligible individuals" requirement by enrolling eligible individuals through an acceptable alternative mechanism (as defined for section 300gg–44) that includes a high-risk pool as one component. (2) Standard risk rate: A rate that (A) the state's high-risk pool sets by looking at premiums other insurers charge in that market, (B) is set using reasonable actuarial methods, and (C) reflects expected claims experience and expenses for that coverage. (3) State: The 50 states and D.C., plus Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.