SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicaid and SCHIP Abuse Prevention 
Act of 2008''.

SEC. 2. SCHIP AND MEDICAID GROSS INCOME ELIGIBILITY CEILING.

    (a) Application of SCHIP Eligibility Ceiling.--
            (1) In general.--Section 2110 of the Social Security Act 
        (42 U.S.C. 1397jj) is amended--
                    (A) in subsection (b)(1)--
                            (i) by striking ``and'' at the end of 
                        subparagraph (B);
                            (ii) by striking the period at the end of 
                        subparagraph (C) and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(D) whose gross family income (as defined in 
                subsection (c)(9)) does not exceed 250 percent of the 
                poverty line.''; and
                    (B) in subsection (c), by adding at the end the 
                following new paragraph:
            ``(9) Gross family income.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                term `gross family income' means, with respect to an 
                individual, gross income (as defined by the Secretary 
                in regulations) for the members of the individual's 
                family. For purposes of the previous sentence, in 
                defining `gross income' the Secretary shall, to the 
                maximum extent practicable, include income from 
                whatever source, other than amounts deducted under 
                section 62(a)(1) of the Internal Revenue Code of 1986.
                    ``(B) Income disregards authorized.--A State may 
                provide, through a State plan amendment and with the 
                approval of the Secretary, for the disregard from gross 
                family income of one or more amounts so long as the 
                total amount of such disregards for a family does not 
                exceed $250 per month, or $3,000 per year.''.
            (2) Denial of federal matching payments for state schip 
        expenditures for individuals with gross family income above 250 
        percent of the poverty line.--Section 2105(c) of the Social 
        Security Act (42 U.S.C. 1397ee(c)) is amended by adding at the 
        end the following new paragraph:
            ``(8) Denial of payments for expenditures for child health 
        assistance for individuals whose gross family income exceeds 
        250 percent of the poverty line.--No payment may be made under 
        this section, for any expenditures for providing child health 
        assistance or health benefits coverage under a State child 
        health plan under this title, including under a waiver under 
        section 1115, with respect to an individual whose gross family 
        income (as defined in section 2110(c)(9)) exceeds 250 percent 
        of the poverty line.''.
            (3) Conforming amendment to maintenance of effort.--Section 
        2105(d)(1) of such Act (42 U.S.C. 1397ee(d)(1)) is amended by 
        inserting before the period at the end the following: ``, 
        unless such income standards were adopted in order to comply 
        with the requirements of section 1939''.
    (b) Medicaid Gross Income Eligibility Ceiling.--
            (1) In general.--Title XIX of the Social Security Act is 
        amended by redesignating section 1939 as section 1940 and by 
        inserting after section 1940 the following new section:

``SEC. 1939. INCOME ELIGIBILITY LIMITATION.

    ``Notwithstanding any other provision of this title, no individual 
with gross family income (as defined in section 2110(c)(9)) that 
exceeds 250 percent of the poverty line shall be eligible to receive 
medical assistance under a State plan under this title, including under 
a waiver under section 1915 or 1115.''.
            (2) Denial of federal matching payments for state 
        expenditures for medical assistance for individuals whose gross 
        family income exceeds 250 percent of the federal poverty 
        line.--Section 1903(i) of such Act (42 U.S.C. 1396b(i)) is 
        amended--
                    (A) in paragraph (22) by striking ``or'' at the 
                end;
                    (B) in paragraph (23) by striking the period at the 
                end and inserting ``; or''; and
                    (C) by inserting after paragraph (23) the following 
                new paragraph:
            ``(24) if a State fails to comply with the provisions of 
        section 1939, with respect to amounts expended by a State for 
        medical assistance for individuals to whom the income 
        eligibility limitation under such section applies.''.
            (3) Medicaid state plan requirements.--Section 1902(a) of 
        such Act (42 U.S.C. 1396a(a)) is amended--
                    (A) in paragraph (69) by striking ``and'' at the 
                end;
                    (B) in paragraph (70) by striking the period at the 
                end and inserting ``; and''; and
                    (C) by inserting after paragraph (70) the following 
                new paragraph:
            ``(71) provide that the State complies with the 
        requirements of section 1939.''.
            (4) Conforming amendment relating to income eligibility.--
        Section 1903(f)(1)(A) of such Act (42 U.S.C. 1396b(f)(1)(A)) is 
        amended by inserting before the period at the end the 
        following: ``, if such payments are not otherwise prohibited 
        under subsection (i)(24),''.
    (c) Effective Date; Transition.--
            (1) In general.--Subject to paragraph (2), the amendments 
        made by this section shall apply to payments made for items and 
        services furnished on or after the first day of the first 
        calendar quarter beginning more than 90 days after the date of 
        the enactment of this Act.
            (2) Transition.--The amendments made by--
                    (A)(i) subsection (a)(1) shall not apply to an 
                individual who was receiving, or was determined 
                eligible to receive, child health assistance or health 
                benefits coverage under a State child health plan under 
                title XXI of the Social Security Act, including under a 
                waiver under section 1115 of such Act, as of the day 
                before the date of the enactment of this Act, until 
                such date as the individual is determined ineligible 
                using income standards or methodologies in place as of 
                the day before the date of the enactment of this Act; 
                and
                    (ii) subsection (a)(2) shall not apply to payment 
                for items and services furnished to an individual 
                described in clause (i);
                    (B)(i) subsection (b)(1) shall not apply to an 
                individual who was receiving, or was determined 
                eligible to receive, medical assistance or health 
                benefits coverage under a State plan under title XIX of 
                the Social Security Act, including under a waiver under 
                section 1115 of such Act, as of the day before the date 
                of the enactment of this Act, until such date as the 
                individual is determined ineligible using income 
                standards or methodologies in place as of the day 
                before the date of the enactment of this Act; and
                    (ii) subsection (b)(2) shall not apply to payment 
                for items and services furnished to an individual 
                described in clause (i).
Medicaid and SCHIP Abuse Prevention Act of 2008 - Amends titles XIX (Medicaid) and XXI (State Children's Health Insurance) (SCHIP) of the Social Security Act to place a ceiling on an invidiual's eligibility for Medicaid and SCHIP benefits at a gross family income that is not more than 250% of the poverty level.
To amend titles XIX and XXI of the Social Security Act to place a general eligibility ceiling of 250 percent of the poverty level on gross income for eligibility for benefits under Medicaid and SCHIP.