A bill to amend title XXI of the Social Security Act to expand the provision of child health assistance to children with family income up to 300 percent of poverty.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``SCHIP Enhancement Act of 2001''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The State children's health insurance program (SCHIP) 
        established under title XXI of the Social Security Act (42 
        U.S.C. 1397aa et seq.) currently limits coverage of children 
        under that program to children whose family income does not 
        exceed 200 percent of the Federal poverty line or 50 percentage 
        points above the State's medicaid applicable income level.
            (2) Three million uninsured children (over 1 of every 4 
        such children) have family incomes that exceed 200 percent of 
        the Federal poverty line, and 1,400,000 of those uninsured 
        children would be provided health insurance coverage if the 
        income eligibility level for SCHIP were increased to 300 
        percent of the Federal poverty line.

SEC. 3. STATE OPTION TO EXPAND INCOME ELIGIBILITY UNDER SCHIP.

    (a) Definition of Low-Income Child.--Section 2110(c)(4) of the 
Social Security Act (42 U.S.C. 42 U.S.C. 1397jj(c)(4)) is amended--
            (1) by striking ``The term'' and inserting the following:
                    ``(A) In general.--The term''; and
            (2) by adding at the end the following new subparagraph:
                    ``(B) State option to expand eligibility.--
                            ``(i) In general.--A State may elect 
                        through a plan amendment to apply subparagraph 
                        (A) as if `300 percent' were substituted for 
                        `200 percent'.
                            ``(ii) No effect on determination of 
                        section 2104 allotments.--An election under 
                        clause (i) shall have no effect on the 
                        determination of a State's allotment under 
                        subsection (b) or (c) of section 2104.''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
child health assistance provided on or after October 1, 2001.

SEC. 4. ADDITIONAL ALLOTMENTS FOR STATES THAT EXPAND INCOME ELIGIBILITY 
              UNDER SCHIP.

    (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. ADDITIONAL ALLOTMENTS FOR STATES THAT OPT TO EXPAND INCOME 
              ELIGIBILITY.

    ``(a) Eligibility for Additional Allotments.--A State that, not 
later than December 31 of any fiscal year, meets the following 
requirements shall be eligible for the additional allotments determined 
for the State under subsection (b) for that fiscal year:
            ``(1) Increase in income eligibility.--The State submits to 
        the Secretary a certification by the chief executive officer of 
        the State that, during the fiscal year, the State child health 
        plan (whether implemented under title XIX or under this title) 
        will have an income standard for children that is at least--
                    ``(A) with respect to the additional allotment 
                determined under subsection (b)(1), 250 percent of the 
                poverty line; and
                    ``(B) with respect to the additional allotment 
                determined under subsection (b)(2), 300 percent of the 
                poverty line.
            ``(2) Submission of information required for certain uses 
        of the additional allotment.--In the case of a State that 
        intends to use the additional allotment provided under 
        subsection (b)(2) for the purpose described in subsection 
        (c)(3), the State submits to the Secretary a description of the 
        reasonable planning and implementation costs the State expects 
        to incur in providing premium assistance for family coverage 
        under an employer-sponsored group health plan in accordance 
        with subsection (d).
    ``(b) Determination of Additional Allotments.--
            ``(1) States that increase income standard to 250 
        percent.--With respect to $617,000,000 of the amount available 
        for the additional allotments under subsection (e) for a fiscal 
        year, the Secretary shall allot an amount to each State with a 
        State child health plan approved under this title that 
        satisfies the requirements of paragraph (1)(A) and, if 
        applicable, paragraph (2) of subsection (a)--
                    ``(A) in the case of such a State other than a 
                commonwealth or territory described in subparagraph 
                (B), an amount determined to bear the same ratio to 
                $617,000,000 as the State's allotment under section 
                2104(b) (determined without regard to section 2104(f)) 
                bears to 98.95 percent of the total amount of the 
                allotments determined under section 2104(b) for such 
                States for such fiscal year; and
                    ``(B) in the case of a commonwealth or territory 
                described in section 2104(c)(3), determined to bear the 
                same ratio to $617,000,000 as the commonwealth's or 
                territory's allotment under section 2104(c) (determined 
                without regard to section 2104(f)) bears to 1.05 
                percent of the total amount of the allotments 
                determined under section 2104(c) for commonwealths and 
                territories for such fiscal year.
            ``(2) States that increase income standard to 300 
        percent.--
                    ``(A) In general.--With respect to $383,000,000 of 
                the amount available for the additional allotments 
                under subsection (e) for a fiscal year, the Secretary 
                shall allot an amount to each State with a State child 
                health plan approved under this title that satisfies 
                the requirements of paragraph (1)(B) and, if 
                applicable, paragraph (2) of subsection (a) determined 
                in the same manner as the additional allotments under 
                paragraph (1).
                    ``(B) Allotments in addition to 250 percent 
                allotments.--The allotments provided under this 
                paragraph to a State shall be in addition to the 
                allotments provided to the State under paragraph (1).
            ``(3) Availability.--
                    ``(A) 3-year availability.--Except as provided in 
                subparagraph (B), amounts allotted to a State under 
                paragraph (1) and, if applicable, paragraph (2) for a 
                fiscal year shall remain available for expenditure by 
                the State through the end of the second succeeding 
                fiscal year.
                    ``(B) Return of unused allotments.--The allotments 
                set-aside under paragraphs (1) and (2) for a fiscal 
                year for any State that has not met the requirements of 
                subsection (a) on January 1 of that fiscal year shall 
                be returned to the Treasury.
    ``(c) Use of Additional Allotments.--The additional allotments 
provided under subsection (b) to a State for a fiscal year may be--
            ``(1) combined with the State's allotment for the fiscal 
        year determined under section 2104 and used to provide child 
        health assistance to all targeted low-income children under the 
        State child health plan; or
            ``(2) used for--
                    ``(A) a premium assistance program under which the 
                State pays part of the premiums for coverage of a child 
                who is eligible for child health assistance under group 
                health insurance or a group health plan in accordance 
                with subsection (d); and
                    ``(B) reasonable planning and implementation costs 
                specified by the State under subsection (a)(2) without 
                regard to the limitation on such costs under section 
                2105(c)(2)(A).
    ``(d) Premium Assistance for Family Coverage Under an Employer-
Sponsored Group Health Plan.--The additional allotments provided under 
subsection (b) to a State for a fiscal year may be used for a premium 
assistance program that meets the following requirements:
            ``(1) The premium assistance program is cost-effective.
            ``(2) The State provides assurances that a child provided 
        such assistance will receive the minimum benefits and cost-
        sharing protections established under this title either through 
        the employer-sponsored group health plan or as a supplement to 
        such coverage.
            ``(3) Employees eligible for employer-sponsored health 
        coverage apply for the full premium contribution available from 
        the employer.
            ``(4) The State evaluates the amount of substitution that 
        occurs as a result of the premium assistance program and the 
        effect of the program on access to health coverage.
    ``(e) Appropriation.--For the purpose of providing additional 
allotments under this section to States that meet the requirements of 
subsection (a), there is appropriated, out of any money in the Treasury 
not otherwise appropriated, for each of fiscal years 2002 through 2011, 
$1,000,000,000.''.

SEC. 5. EVALUATION AND REPORT ON PREMIUM ASSISTANCE FOR FAMILY 
              COVERAGE.

    (a) In General.--The Secretary of Health and Human Services shall 
conduct an evaluation of any premium assistance programs conducted with 
the allotments provided to States under section 2111(b) of the Social 
Security Act (as added by section 4). Such evaluation shall identify 
any implementation problems with the provision of such assistance and 
whether the assistance has supplanted health insurance coverage that 
otherwise would be provided to such children.
    (b) Report.--Not later than January 1, 2006, the Secretary of 
Health and Human Services shall submit to Congress a report on the 
evaluation conducted under subsection (a), together with any 
recommendations for legislation that the Secretary determines to be 
appropriate as a result of such evaluation.

Summary: SCHIP Enhancement Act of 2001 - Amends title XXI (SCHIP) of the Social Security Act (SSA) to give States the option to expand income eligibility under SCHIP to children whose family income totals up to 300 percent of the Federal poverty line. Provides for additional allotments for States that expand income eligibility under SCHIP, allowing such allotments to be used for premium assistance for family coverage under an employee-sponsored group health plan.