A bill to amend title XIX of the Social Security Act to provide families of disabled children with the opportunity to purchase coverage under the medicaid program for such children, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Family Opportunity Act of 2005''or 
the ``Dylan Lee James Act''.

SEC. 2. REFERENCES; TABLE OF CONTENTS.

    (a) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this title an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference shall be considered to be made to that section or other 
provision of the Social Security Act.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title.
Sec. 2. References; table of contents.
Sec. 3. Opportunity for families of disabled children to purchase 
                            medicaid coverage for such children.
Sec. 4. Demonstration projects regarding home and community-based 
                            alternative to psychiatric residential 
                            treatment facilities for children.
Sec. 5. Development and support of family-to-family health information 
                            centers.
Sec. 6. Restoration of medicaid eligibility for certain SSI 
                            beneficiaries.

SEC. 3. OPPORTUNITY FOR FAMILIES OF DISABLED CHILDREN TO PURCHASE 
              MEDICAID COVERAGE FOR SUCH CHILDREN.

    (a) State Option To Allow Families of Disabled Children To Purchase 
Medicaid Coverage for Such Children.--
            (1) In general.--Section 1902 (42 U.S.C. 1396a) is 
        amended--
                    (A) in subsection (a)(10)(A)(ii)--
                            (i) by striking ``or'' at the end of 
                        subclause (XVII);
                            (ii) by adding ``or'' at the end of 
                        subclause (XVIII); and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(XIX) who are disabled children 
                                described in subsection (cc)(1);''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(cc)(1) Individuals described in this paragraph are individuals--
            ``(A) who are children who have not attained 19 years of 
        age and are born--
                    ``(i) on or after October 1, 1999 (or, at the 
                option of a State, on or after an earlier date), in the 
                case of fiscal year 2006;
                    ``(ii) on or after October 1, 1994 (or, at the 
                option of a State, on or after an earlier date), in the 
                case of fiscal year 2007; and
                    ``(iii) after October 1, 1988, in the case of 
                fiscal year 2008 and any fiscal year thereafter;
            ``(B) who would be considered disabled under section 
        1614(a)(3)(C) but for having earnings or deemed income or 
        resources (as determined under title XVI for children) that 
        exceed the requirements for receipt of supplemental security 
        income benefits; and
            ``(C) whose family income does not exceed such income level 
        as the State establishes and does not exceed--
                    ``(i) 300 percent of the poverty line (as defined 
                in section 2110(c)(5)) applicable to a family of the 
                size involved; or
                    ``(ii) such higher percent of such poverty line as 
                a State may establish, except that--
                            ``(I) any medical assistance provided to an 
                        individual whose family income exceeds 300 
                        percent of such poverty line may only be 
                        provided with State funds; and
                            ``(II) no Federal financial participation 
                        shall be provided under section 1903(a) for any 
                        medical assistance provided to such an 
                        individual.''.
            (2) Interaction with employer-sponsored family coverage.--
        Section 1902(cc) (42 U.S.C. 1396a(cc)), as added by paragraph 
        (1)(B), is amended by adding at the end the following new 
        paragraph:
    ``(2)(A) If an employer of a parent of an individual described in 
paragraph (1) offers family coverage under a group health plan (as 
defined in section 2791(a) of the Public Health Service Act), the State 
shall--
            ``(i) require such parent to apply for, enroll in, and pay 
        premiums for such coverage as a condition of such parent's 
        child being or remaining eligible for medical assistance under 
        subsection (a)(10)(A)(ii)(XIX) if the parent is determined 
        eligible for such coverage and the employer contributes at 
        least 50 percent of the total cost of annual premiums for such 
        coverage; and
            ``(ii) if such coverage is obtained--
                    ``(I) subject to paragraph (2) of section 1916(h), 
                reduce the premium imposed by the State under that 
                section in an amount that reasonably reflects the 
                premium contribution made by the parent for private 
                coverage on behalf of a child with a disability; and
                    ``(II) treat such coverage as a third party 
                liability under subsection (a)(25).
    ``(B) In the case of a parent to which subparagraph (A) applies, a 
State, subject to paragraph (1)(A)(iii)(II), may provide for payment of 
any portion of the annual premium for such family coverage that the 
parent is required to pay. Any payments made by the State under this 
subparagraph shall be considered, for purposes of section 1903(a), to 
be payments for medical assistance.''.
    (b) State Option To Impose Income-Related Premiums.--Section 1916 
(42 U.S.C. 1396o) is amended--
            (1) in subsection (a), by striking ``subsection (g)'' and 
        inserting ``subsections (g) and (h)''; and
            (2) by adding at the end the following new subsection:
    ``(h)(1) With respect to disabled children provided medical 
assistance under section 1902(a)(10)(A)(ii)(XIX), subject to paragraph 
(2), a State may (in a uniform manner for such children) require the 
families of such children to pay monthly premiums set on a sliding 
scale based on family income.
    ``(2) A premium requirement imposed under paragraph (1) may only 
apply to the extent that--
            ``(A) in the case of a disabled child described in that 
        paragraph whose family income--
                    ``(i) does not exceed 200 percent of the poverty 
                line, the aggregate amount of such premium and any 
                premium that the parent is required to pay for family 
                coverage under section 1902(cc)(2)(A)(i) and other cost 
                sharing charges do not exceed 5 percent of the family's 
                income; and
                    ``(ii) exceeds 200, but does not exceed 300, 
                percent of the poverty line, the aggregate amount of 
                such premium and any premium that the parent is 
                required to pay for family coverage under section 
                1902(cc)(2)(A)(i) and other cost sharing charges do not 
                exceed 7.5 percent of the family's income; and
            ``(B) the requirement is imposed consistent with section 
        1902(cc)(2)(A)(ii)(I).
    ``(3) A State shall not require prepayment of a premium imposed 
pursuant to paragraph (1) and shall not terminate eligibility of a 
child under section 1902(a)(10)(A)(ii)(XIX) for medical assistance 
under this title on the basis of failure to pay any such premium until 
such failure continues for a period of at least 60 days from the date 
on which the premium became past due. The State may waive payment of 
any such premium in any case where the State determines that requiring 
such payment would create an undue hardship.''.
    (c) Conforming Amendments.--(1) Section 1903(f)(4) (42 U.S.C. 
1396b(f)(4)) is amended in the matter preceding subparagraph (A), by 
inserting ``1902(a)(10)(A)(ii)(XIX),'' after 
``1902(a)(10)(A)(ii)(XVIII),''.
    (2) Section 1905(u)(2)(B) (42 U.S.C. 1396d(u)(2)(B)) is amended by 
adding at the end the following sentence: ``Such term excludes any 
child eligible for medical assistance only by reason of section 
1902(a)(10)(A)(ii)(XIX).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to medical assistance for items and services furnished on or 
after October 1, 2005.

SEC. 4. DEMONSTRATION PROJECTS REGARDING HOME AND COMMUNITY-BASED 
              ALTERNATIVE TO PSYCHIATRIC RESIDENTIAL TREATMENT 
              FACILITIES FOR CHILDREN.

    (a) In General.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') is authorized to 
conduct, during each of fiscal years 2006 through 2010, demonstration 
projects (each in the section referred to as a ``demonstration 
project'') in accordance with this section under which up to 10 States 
(as defined for purposes of title XIX of the Social Security Act) are 
awarded grants, on a competitive basis, to test the effectiveness in 
improving or maintaining a child's functional level and cost-
effectiveness of providing coverage of home and community-based 
alternatives to psychiatric residential treatment for children enrolled 
in the medicaid program under title XIX of such Act.
    (b) Application of Terms and Conditions.--
            (1) In general.--Subject to the provisions of this section, 
        for the purposes of the demonstration projects, and only with 
        respect to children enrolled under such demonstration projects, 
        a psychiatric residential treatment facility (as defined in 
        section 483.352 of title 42 of the Code of Federal Regulations) 
        shall be deemed to be a facility specified in section 1915(c) 
        of the Social Security Act (42 U.S.C. 1396n(c)), and to be 
        included in each reference in such section 1915(c) to 
        hospitals, nursing facilities, and intermediate care facilities 
        for the mentally retarded.
            (2) State option to assure continuity of medicaid 
        coverage.--Upon the termination of a demonstration project 
        under this section, the State that conducted the project may 
        elect, only with respect to a child who is enrolled in such 
        project on the termination date, to continue to provide medical 
        assistance for coverage of home and community-based 
        alternatives to psychiatric residential treatment for the child 
        in accordance with section 1915(c) of the Social Security Act 
        (42 U.S.C. 1396n(c)), as modified through the application of 
        paragraph (1). Expenditures incurred for providing such medical 
        assistance shall be treated as a home and community-based 
        waiver program under section 1915(c) of the Social Security Act 
        (42 U.S.C. 1396n(c)) for purposes of payment under section 1903 
        of such Act (42 U.S.C. 1396b).
    (c) Terms of Demonstration Projects.--
            (1) In general.--Except as otherwise provided in this 
        section, a demonstration project shall be subject to the same 
        terms and conditions as apply to a waiver under section 1915(c) 
        of the Social Security Act (42 U.S.C. 1396n(c)), including the 
        waiver of certain requirements under the first sentence of 
        paragraph (3) of such section but not applying the second 
        sentence of such paragraph.
            (2) Budget neutrality.--In conducting the demonstration 
        projects under this section, the Secretary shall ensure that 
        the aggregate payments made by the Secretary under title XIX of 
        the Social Security Act (42 U.S.C. 1396 et seq.) do not exceed 
        the amount by which the Secretary estimates would have been 
        paid under that title if the demonstration projects under this 
        section had not been implemented.
            (3) Evaluation.--The application for a demonstration 
        project shall include an undertaking to provide for such 
        interim and final evaluations of the demonstration project by 
        independent third parties, and for such interim and final 
        reports to the Secretary, as the Secretary may require.
    (d) Payments to States; Limitations to Scope and Funding.--
            (1) In general.--Subject to paragraph (2), a demonstration 
        project approved by the Secretary under this section shall be 
        treated as a home and community-based waiver program under 
        section 1915(c) of the Social Security Act (42 U.S.C. 1396n(c)) 
        for purposes of payment under section 1903 of such Act (42 
        U.S.C. 1396b).
            (2) Limitation.--In no case may the amount of payments made 
        by the Secretary under this section for State demonstration 
        projects for a fiscal year exceed the amount available under 
        subsection (f)(2)(A) for such fiscal year.
    (e) Secretary's Evaluation and Report.--The Secretary shall conduct 
an interim and final evaluation of State demonstration projects under 
this section and shall report to the President and Congress the 
conclusions of such evaluations within 12 months of completing such 
evaluations.
    (f) Funding.--
            (1) In general.--For the purpose of carrying out this 
        section, there are appropriated, from amounts in the Treasury 
        not otherwise appropriated, for fiscal years 2006 through 2010 
        a total of $218,000,000, of which--
                    (A) the amount specified in paragraph (2) shall be 
                available for each of fiscal years 2006 through 2010; 
                and
                    (B) a total of $1,000,000 shall be available to the 
                Secretary for the evaluations and report under 
                subsection (f).
            (2) Fiscal year limit.--
                    (A) In general.--For purposes of paragraph (1), the 
                amount specified in this paragraph for a fiscal year is 
                the amount specified in subparagraph (B) for the fiscal 
                year plus the difference, if any, between the total 
                amount available under this paragraph for prior fiscal 
                years and the total amount previously expended under 
                paragraph (1)(A) for such prior fiscal years.
                    (B) Fiscal year amounts.--The amount specified in 
                this subparagraph for--
                            (i) fiscal year 2006 is $21,000,000;
                            (ii) fiscal year 2007 is $37,000,000;
                            (iii) fiscal year 2008 is $49,000,000;
                            (iv) fiscal year 2009 is $53,000,000; and
                            (v) fiscal year 2010 is $57,000,000.

SEC. 5. DEVELOPMENT AND SUPPORT OF FAMILY-TO-FAMILY HEALTH INFORMATION 
              CENTERS.

    Section 501 (42 U.S.C. 701) is amended by adding at the end the 
following new subsection:
    ``(c)(1)(A) For the purpose of enabling the Secretary (through 
grants, contracts, or otherwise) to provide for special projects of 
regional and national significance for the development and support of 
family-to-family health information centers described in paragraph 
(2)--
            ``(i) there is appropriated to the Secretary, out of any 
        money in the Treasury not otherwise appropriated--
                    ``(I) $3,000,000 for fiscal year 2006;
                    ``(II) $4,000,000 for fiscal year 2007; and
                    ``(III) $5,000,000 for fiscal year 2008; and
            ``(ii) there is authorized to be appropriated to the 
        Secretary, $5,000,000 for each of fiscal years 2009 and 2010.
    ``(B) Funds appropriated or authorized to be appropriated under 
subparagraph (A) shall--
            ``(i) be in addition to amounts appropriated under 
        subsection (a) and retained under section 502(a)(1) for the 
        purpose of carrying out activities described in subsection 
        (a)(2); and
            ``(ii) remain available until expended.
    ``(2) The family-to-family health information centers described in 
this paragraph are centers that--
            ``(A) assist families of children with disabilities or 
        special health care needs to make informed choices about health 
        care in order to promote good treatment decisions, cost-
        effectiveness, and improved health outcomes for such children;
            ``(B) provide information regarding the health care needs 
        of, and resources available for, such children;
            ``(C) identify successful health delivery models for such 
        children;
            ``(D) develop with representatives of health care 
        providers, managed care organizations, health care purchasers, 
        and appropriate State agencies a model for collaboration 
        between families of such children and health professionals;
            ``(E) provide training and guidance regarding caring for 
        such children;
            ``(F) conduct outreach activities to the families of such 
        children, health professionals, schools, and other appropriate 
        entities and individuals; and
            ``(G) are staffed--
                    ``(i) by such families who have expertise in 
                Federal and State public and private health care 
                systems; and
                    ``(ii) by health professionals.
    ``(3) The Secretary shall develop family-to-family health 
information centers described in paragraph (2) in accordance with the 
following:
            ``(A) With respect to fiscal year 2006, such centers shall 
        be developed in not less than 25 States.
            ``(B) With respect to fiscal year 2007, such centers shall 
        be developed in not less than 40 States.
            ``(C) With respect to fiscal year 2008, such centers shall 
        be developed in all States.
    ``(4) The provisions of this title that are applicable to the funds 
made available to the Secretary under section 502(a)(1) apply in the 
same manner to funds made available to the Secretary under paragraph 
(1)(A).
    ``(5) For purposes of this subsection, the term `State' means each 
of the 50 States and the District of Columbia.''.

SEC. 6. RESTORATION OF MEDICAID ELIGIBILITY FOR CERTAIN SSI 
              BENEFICIARIES.

    (a) In General.--Section 1902(a)(10)(A)(i)(II) (42 U.S.C. 
1396a(a)(10)(A)(i)(II)) is amended--
            (1) by inserting ``(aa)'' after ``(II)'';
            (2) by striking ``) and'' and inserting ``and'';
            (3) by striking ``section or who are'' and inserting 
        ``section), (bb) who are''; and
            (4) by inserting before the comma at the end the following: 
        ``, or (cc) who are under 21 years of age and with respect to 
        whom supplemental security income benefits would be paid under 
        title XVI if subparagraphs (A) and (B) of section 1611(c)(7) 
        were applied without regard to the phrase `the first day of the 
        month following'''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to medical assistance for items and services furnished on or 
after January 1, 2006.

Summary: Family Opportunity Act of 2005 or Dylan Lee James Act - Amends title XIX (Medicaid) of the Social Security Act (SSA) to give States the option of allowing families of disabled children to purchase Medicaid coverage for such children. Authorizes the Secretary of Health and Human Services to conduct demonstration projects under which up to ten States are awarded grants, on a competitive basis, to test the effectiveness in improving or maintaining a child's functional level and cost-effectiveness of providing coverage of home and community-based alternatives to psychiatric resident treatment for children enrolled in the Medicaid program. Amends SSA title V to make appropriations to the Secretary for special projects of regional and national significance for development and support of family-to-family health information centers. Amends SSA title XIX to provide for the restoration of Medicaid eligibility to certain SSI beneficiaries under age 21.