To amend title XXI of the Social Security Act to require States to provide priority under the State Children's Health Insurance Program (SCHIP) to children in families with gross income below 200 percent of the Federal poverty level.

Summary: SCHIP Expansion for Kids in Need Act of 2009 - Amends title XXI (State Children's Health Insurance Program) (SCHIP) to require states to provide SCHIP priority to children in families with gross income below 200% of the federal poverty level.

Declares that no state child health plan shall be considered approved for a fiscal year unless the state has developed and submitted to the Secretary of Health and Human Services a plan to assure that all qualified low-income children are covered by creditable health coverage, such a plan has been approved, and the state implements it beginning with FY2010.

Declares that no payment to a state that increases its state child health plan income eligibility level above the one in effect as of the enactment of this Act shall be made for any amount expended for an individual whose family income exceeds the unincreased income eligibility level unless no more than 10% percent of qualified low-income children residing in the state are still not covered under creditable health coverage.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``SCHIP Expansion for Kids in Need Act 
of 2009''.

SEC. 2. REQUIRING PRIORITY FOR SCHIP COVERAGE OF CHILDREN IN FAMILIES 
              WITH INCOME UNDER 200 PERCENT OF THE FEDERAL POVERTY 
              LEVEL.

    (a) Data Collection Requirement.--Section 2108 of the Social 
Security Act (42 U.S.C. 1397hh) is amended by adding at the end the 
following new subsection:
    ``(e) Inclusion of Certain Income-Related Data.--
            ``(1) In general.--Each annual report under this section 
        for each fiscal year (beginning with fiscal year 2010) shall 
        include information, consistent with regulations promulgated 
        under paragraph (2), on the success of the State in providing 
        health insurance coverage for children at various family income 
        levels.
            ``(2) Regulations.--In order to provide consistency in the 
        reporting of information under paragraph (1), the Secretary 
        shall promulgate, not later than September 30, 2009, standards 
        for data collection and statistical methodologies that must be 
        used in submitting such information. Such standards shall 
        provide for family income levels to be determined based on 
        gross income relative to percentages of the poverty line for a 
        family of the size involved.''.
    (b) Plan for Coverage of Low Income Children.--Section 2101 of such 
Act (42 U.S.C. 1397aa) is amended by adding at the end the following 
new subsection:
    ``(e) Inclusion of Plan for Coverage of Low Income Children.--
            ``(1) Development.--No State child health plan shall be 
        considered approved under section 2106 for a fiscal year 
        (beginning with fiscal year 2010) unless--
                    ``(A) the State has developed and submitted to the 
                Secretary, not later than 6 months after the date of 
                the enactment of this subsection, a plan to assure that 
                all qualified low-income children (as defined in 
                paragraph (3)) are covered by creditable health 
                coverage;
                    ``(B) such a plan has been approved under paragraph 
                (2); and
                    ``(C) the State implements such plan beginning with 
                fiscal year 2010.
            ``(2) Review and approval.--The Secretary shall--
                    ``(A) promptly review plans submitted under 
                paragraph (1)(A);
                    ``(B) approve such plan if the Secretary determines 
                that the plan is reasonably designed to assure the 
                coverage described in such paragraph, effective as for 
                the plan year beginning in fiscal year 2010; or
                    ``(C) disapprove such plan if the Secretary 
                determines that the plan is not so reasonably designed.
            ``(3) Opportunity for resubmittal.--If the Secretary 
        disapproves a plan under paragraph (2)(C), the Secretary shall 
        provide the State with an opportunity to resubmit a modified 
        plan under paragraph (1)(A) that meets the requirement of 
        paragraph (2)(B).
            ``(4) Notification.--The Secretary shall promptly notify 
        the State involved of the approval or disapproval of a plan 
        submitted under paragraph (1)(A), or resubmitted under 
        paragraph (3).
            ``(5) Qualified low-income children.--In this subsection 
        and section 2105(c)(8), the term `qualified low-income child' 
        means a child--
                    ``(A) the gross income of whose family does not 
                exceed 200 percent of the poverty line for a family of 
                the size involved; and
                    ``(B) who meets all eligibility requirements, other 
                than those related to income, to be a targeted low-
                income child.''.
    (c) Limitation on Use of SCHIP Funds.--Section 2105(c) of such Act 
(42 U.S.C. 1397ee(c)) is amended by adding at the end the following new 
paragraph:
            ``(8) Limitation based on increases in income 
        eligibility.--
                    ``(A) In general.--Subject to subparagraph (B), in 
                the case of a State that increases its income 
                eligibility level under its State child health plan 
                above the level in effect as of the date of the 
                enactment of this paragraph, payment shall not be made 
                to a State under this section for any amount expended 
                for an individual whose family income exceeds the 
                income eligibility level under its State child health 
                plan as of such date unless the State demonstrates to 
                the satisfaction of the Secretary that no more than 10 
                percent of qualified low-income children (as defined in 
                section 2101(e)(5)) residing in the State are not 
                covered under creditable health coverage.
                    ``(B) Safe harbor for qualified low-income children 
                and currently eligible children.--Subparagraph (A) 
                shall not apply to limit payment under this section for 
                amounts expended for--
                            ``(i) qualified low-income children (as so 
                        defined); or
                            ``(ii) any child who meets eligibility 
                        standards under the State child health plan as 
                        in effect as of the date of the enactment of 
                        this paragraph.''.