SECTION 1. AUTHORITY FOR QUALIFYING STATES TO USE ALL OR ANY PORTION OF 
              THEIR SCHIP ALLOTMENTS FOR CERTAIN MEDICAID EXPENDITURES.

    (a) In General.--Section 2105(g)(1)(A) of the Social Security Act 
(42 U.S.C. 1397ee(g)(1)(A)) is amended by striking ``not more than 20 
percent of any allotment under section 2104 for fiscal year 1998, 1999, 
2000, 2001, 2004, or 2005'' and inserting ``all or any portion of any 
allotment made to the State under section 2104 for a fiscal year''.
    (b) Additional Requirements.--Section 2105(g)(2) of such Act (42 
U.S.C. 1397ee(g)(2)) is amended--
            (1) by striking ``a State, that, on'' and inserting ``a 
        State that is described in subparagraph (A) and satisfies all 
        of the requirements of subparagraph (B).
                    ``(A) State described.--A State described in this 
                subparagraph is a State that, on''; and
            (2) by adding at the end the following:
                    ``(B) Requirements.--The requirements of this 
                subparagraph are the following:
                            ``(i) No reduction in medicaid or schip 
                        income eligibility.--Since January 1, 2001, the 
                        State has not reduced the income, assets, or 
                        resource requirements for eligibility for 
                        medical assistance under title XIX or for child 
                        health assistance under this title.
                            ``(ii) No waiting list imposed.--The State 
                        does not impose any numerical limitation, 
                        waiting list, or similar limitation on the 
                        eligibility of children for medical assistance 
                        under title XIX or child health assistance 
                        under this title and does not limit the 
                        acceptance of applications for such assistance.
                            ``(iii) Provides assistance to all children 
                        who apply and qualify.--The State provides 
                        medical assistance under title XIX or child 
                        health assistance under this title to all 
                        children in the State who apply for and meet 
                        the eligibility standards for such assistance.
                            ``(iv) Protection against inability to pay 
                        premiums or copayments.--The State ensures that 
                        no child loses coverage under title XIX or this 
                        title, or is denied needed care, as a result of 
                        the child's parents' inability to pay any 
                        premiums or cost-sharing required under such 
                        title.
                            ``(v) Additional requirements.--The State 
                        has implemented at least 3 of the following 
                        policies and procedures (relating to coverage 
                        of children under title XIX and this title):
                                    ``(I) Simplified application 
                                form.--With respect to children who are 
                                eligible for medical assistance under 
                                title XIX, the State uses the same 
                                simplified application form (including, 
                                if applicable, permitting application 
                                other than in person) for purposes of 
                                establishing eligibility for assistance 
                                under title XIX and this title.
                                    ``(II) Elimination of asset test.--
                                The State does not apply any asset test 
                                for eligibility under title XIX or this 
                                title with respect to children.
                                    ``(III) Adoption of 12-month 
                                continuous enrollment.--The State 
                                provides that eligibility shall not be 
                                regularly redetermined more often than 
                                once every year under this title or for 
                                children eligible for medical 
                                assistance under title XIX.
                                    ``(IV) Same verification and 
                                redetermination policies; automatic 
                                reassessment of eligibility.--With 
                                respect to children who are eligible 
                                for medical assistance under section 
                                1902(a)(10)(A), the State provides for 
                                initial eligibility determinations and 
                                redeterminations of eligibility using 
                                the same verification policies 
                                (including with respect to face-to-face 
                                interviews), forms, and frequency as 
                                the State uses for such purposes under 
                                this title, and, as part of such 
                                redeterminations, provides for the 
                                automatic reassessment of the 
                                eligibility of such children for 
                                assistance under title XIX and this 
                                title.
                                    ``(V) Outstationing enrollment 
                                staff.--The State provides for the 
                                receipt and initial processing of 
                                applications for benefits under this 
                                title and for children under title XIX 
                                at facilities defined as 
                                disproportionate share hospitals under 
                                section 1923(a)(1)(A) and Federally-
                                qualified health centers described in 
                                section 1905(l)(2)(B) consistent with 
                                section 1902(a)(55).''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2006, and shall apply to expenditures described in 
section 2105(g)(1)(B)(ii) of the Social Security Act (42 U.S.C. 
1397ee(g)(1)(B)(ii)) that are made after that date.
Amends title XXI (State Children's Health Insurance) (SCHIP) of the Social Security Act (SSA) to allow qualifying states to use all or any portion (currently, up to 20%) of their allotments under SCHIP for certain Medicaid (SSA title XIX) expenditures.

Requires qualifying states to meet at least three of certain policies and procedures, including: (1) a simplified application process; (2) elimination of any asset test; (3) twelve-month continuous eligibility; and (4) easy access to enrollment staff.
A bill to amend title XXI of the Social Security Act to allow qualifying States to use all or any portion of their allotments under the State Children's Health Insurance Program for certain Medicaid expenditures.