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Panel Votes to Renew Grants to Support High-Risk Insurance Pools

JULY 14, 2005 -- A bill to extend a grant program for states that create health insurance pools for high-risk individuals was approved Thursday by the House Energy and Commerce Health Subcommittee.

The bill (HR 3204), sponsored by John Shadegg, R-Ariz., and approved by voice vote, would reauthorize $15 million in leftover grants for fiscal 2005 to states that establish high-risk pools. It also would extend and increase funding for states that already have risk pools, authorizing $50 million a year in operating grants through 2009.

"It's one step in the right direction for high-risk individuals," said Shadegg.

Ranking Democrat Sherrod Brown of Ohio said that state high-risk pools are not a viable long-term solution for insuring people with serious chronic health problems. "In many states, high-risk insurance pools are the only option for individuals who fall through the cracks of our patchwork health insurance system," he said. But he added, "High-risk pools are not a solution, they are an emergency shelter, and a shaky one at that."

Funded and operated by the states, the insurance programs help people who are unable to obtain insurance in the private market because of existing medical conditions or limited income. The premiums in state pools are capped at a percentage of market premiums to keep them affordable.

The pool program was created in 2002 as part of a law (PL 107-210) that revived fast-track procedures for congressional action on trade agreements. The law also included several provisions designed to ease the burdens of American workers who suffered because of liberalized trade.
The trade law authorized $20 million in seed grants for fiscal year 2003 to encourage states to launch the high-risk pools, but some state officials said the requirements were too cumbersome. Authorization for the program expired in September 2004.

Allocation of the grants would be determined by the proportion of uninsured residents in a state, the number of people enrolled in a state's high-risk pool and a set amount distributed equally among states.

The Senate Health, Education, Labor and Pensions Committee approved its version of the legislation (S 288) by voice vote Feb. 9.

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