SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Family Health Insurance Program Act 
of 2001''.

SEC. 2. STATE OPTION TO PROVIDE HEALTH BENEFITS COVERAGE FOR PARENTS OF 
              CHILDREN ELIGIBLE FOR CHILD HEALTH ASSISTANCE UNDER THE 
              STATE CHILDREN'S HEALTH INSURANCE PROGRAM.

    (a) In General.--Title XXI of the Social Security Act (42 U.S.C. 
1397aa et seq.) is amended by adding at the end the following new 
section:

``SEC. 2111. OPTIONAL COVERAGE OF PARENTS OF TARGETED LOW-INCOME 
              CHILDREN.

    ``(a) Optional Coverage.--
            ``(1) In general.--Notwithstanding any other provision of 
        this title, a State that meets the requirements of paragraph 
        (2) may provide for coverage, through an amendment to its State 
        child health plan under section 2102, of parent health 
        assistance for targeted low-income parents in accordance with 
        this section.
            ``(2) Requirements.--A State may not receive payment under 
        section 2105 for coverage provided under this subsection (or 
        payment under section 1903 for medical assistance provided to 
        parents described in section 1902(a)(10)(A)(ii)(XIV)) unless 
        the State provides assurances satisfactory to the Secretary 
        that--
                    ``(A) targeted low-income parents in families with 
                higher income are only made eligible (under title XIX 
                or this title) if targeted low-income parents in 
                families with lower income are also eligible; and
                    ``(B) parents are enrolled in the same program 
                (whether under this title or title XIX) as a child of 
                the parents.
    ``(b) Definitions.--In this section:
            ``(1) Parent health assistance.--The term `parent health 
        assistance' has the meaning given the term child health 
        assistance in section 2110(a) as if any reference to targeted 
        low-income children were a reference to targeted low-income 
        parents.
            ``(2) Targeted low-income parent.--The term `targeted low-
        income parent' means an individual who--
                    ``(A) is a parent of a targeted low-income child; 
                and
                    ``(B) otherwise satisfies the requirements for a 
                child to be a targeted low-income child (as described 
                in section 2110(b)).
            ``(3) Parent.--The term `parent' means an individual who is 
        a caretaker relative of a child described in paragraph (2)(A). 
        Such term includes parents, stepparents with whom the child 
        resides, appointed guardians, grandparents, and other 
        relatives.
    ``(c) References to Terms and Special Rules.--In the case of, and 
with respect to, a State providing for coverage of parent health 
assistance to targeted low-income parents under subsection (a), the 
following special rules apply:
            ``(1) Any reference in this title (other than in subsection 
        (b)) to a targeted low-income child is deemed to include a 
        reference to a targeted low-income parent.
            ``(2) Any such reference to child health assistance with 
        respect to such a parent is deemed a reference to parent health 
        assistance.
            ``(3) Any such reference to a child (other than in section 
        2104(b)) is deemed a reference to a parent of such child.
            ``(4) The medicaid applicable income level is the level 
        applicable to the child of that parent.
            ``(5) In applying section 2103(e)(3)(B) in the case of a 
        parent provided parent health assistance under this section, 
        the limitation on total annual aggregate cost-sharing shall be 
        applied to the entire family.
            ``(6) Section 2105(c)(3) shall be applied without regard to 
        subparagraph (A).
    ``(d) Rules of Construction.--Nothing in this section shall be 
construed--
            ``(1) as affecting--
                    ``(A) the total amount available for allotments 
                under section 2104(a); or
                    ``(B) the amount of the allotment provided to a 
                State under subsection (b) or (c) of section 2104; or
            ``(2) as requiring a State to provide parent health 
        assistance to all targeted low-income parents.''.
    (b) Medicaid Conforming Amendments.--
            (1) Section 1902(a)(10)(A)(ii)(XIV) of the Social Security 
        Act (42 U.S.C. 1396a(a)(10)(A)(ii)(XIV)) is amended by 
        inserting ``or who are optional targeted low-income parents 
        described in section 1905(u)(2)(C), but only if the State 
        provides medical assistance for such optional targeted low-
        income children'' before the semicolon.
            (2) Section 1905(u)(2) of the Social Security Act (42 
        U.S.C. 1396d(u)(2)) is amended--
                    (A) in subparagraph (A), by inserting ``and for 
                optional targeted low-income parents described in 
                subparagraph (C)'' before the period; and
                    (B) by adding at the end the following new 
                subparagraph:
    ``(C) For purposes of this paragraph, the term ``optional targeted 
low-income parent'' means an individual--
            ``(i) who is a parent of an optional targeted low-income 
        child;
            ``(ii) who otherwise satisfies the requirements for a child 
        to be a targeted low-income child (as described in section 
        2110(b) but determined without regard to that portion of 
        paragraph (1)(C) of such section concerning eligibility for 
        medical assistance under this title); and
            ``(iii) who are not otherwise eligible for medical 
        assistance under section 1902(a)(10)(A) or section 1931.''.
    (c) Effective Date.--The amendments made by this section apply to 
parent health assistance and medical assistance furnished on or after 
October 1, 2001.
Family Health Insurance Program Act of 2001 - Amends title XXI (State Children's Health Insurance Program) (SCHIP) of the Social Security Act to give States the option to provide for coverage of parent health assistance for targeted low-income parents under SCHIP.
A bill to amend titles XIX and XXI of the Social Security Act to allow States to provide health benefits coverage for parents of children eligible for child health assistance under the State children's health insurance program.