Announcement of Availability of Seed Grants to States to Create Qualified High-Risk Pools

Sponsored by The Centers for Medicare & Medicaid Services (CMS) of the Department of Health and Human Services (HHS)

(CFDA 93.779)

Purpose

The purpose of this grant program is to encourage states that currently do not have high-risk pools that meet the definition of a qualified-risk pool under 2744(c)(2) of the Public Health Service Act (PHS Act) to create such pools. Specifically, this program implements the provision of the Trade Act of 2002 (Trade Act) that provides funding for the creation and initial operation of qualified high-risk pools.

Background

The Trade Act provides funding to the states for the creation and initial operation of qualified high-risk pools. Section 201(b) amends the PHS Act by creating a new 2745 that provides for, among other things, seed grants to states that had not created a qualified high-risk pool by the time of enactment of the Trade Act. The grants can be for amounts up to $1,000,000 for the states cost of creation and initial operation of a pool. The total appropriation is $20,000,000 in Fiscal Year (FY) 2003. The Trade Act allows two years for CMS to obligate the funds (through FY 2004).

A qualified high-risk pool is defined in 2745 of the PHS Act as one that meets the criteria in 2744(c)(2) of that Act. These criteria are that a pool:

1. Makes available to all eligible individuals (as defined in 2741(b) of the PHS Act) health coverage that does not impose any pre-existing condition exclusion; and

2. Provides for premium rates and covered benefits consistent with the Health Plan for Uninsurables model regulation established by the National Association of Insurance Commissioners (NAIC), as in effect as of August 21, 1996, the date of enactment of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).