§300gg–45 Relief for High Risk Pools

Summary

Gives money to states to set up and run "high risk" health insurance pools for people who have trouble getting coverage. Each state that had not created such a pool by February 10, 2006 can get up to $1,000,000 to start one. States that already have a qualified pool and that limit premiums to no more than 200% of the state's "standard risk" rate, offer two or more plan choices, and have a plan to keep funding after the grant ends can get payments to cover operating losses. For operational grants, yearly appropriations are split so two-thirds go to these loss payments and one-third to bonus grants for extra consumer benefits. Of the money for losses, 40% is divided equally among qualifying 50 States and DC that apply, 30% is split based on each State’s share of uninsured people, and 30% is split based on each State’s share of pool enrollees. Territories together can receive no more than $1,000,000 in a year. If a pool charges more than 150% of the standard rate, at least half of its grant must be used to lower premiums. Bonus grants (from the one-third) can pay for things like low-income subsidies, lower premiums or cost-sharing, broader eligibility, better benefits, or disease management. A State’s bonus grant cannot exceed 10% of the funds set aside that year. Money is authorized for FY2006 ($15,000,000 for starts and $75,000,000 for grants) and $75,000,000 each year for 2007–2010. States must apply for grants. The federal official in charge must report to Congress each year on who got money and how it was used. Grants are not a guaranteed entitlement. Definitions: - Qualified high risk pool: a state program that helps insure high-risk people (or an approved alternative that includes such a pool). - Standard risk rate: the normal premium level set by the state using actuarial methods and market rates. - State: the 50 States and DC, plus Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.