A bill to amend title XXI of the Social Security Act to extend the availability of allotments to States for fiscal years 1998 through 2000, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Children's Health Protection and 
Eligibility Act of 2002''.

SEC. 2. RETENTION AND REDISTRIBUTION OF SCHIP ALLOTMENTS FOR FISCAL 
              YEARS 1998 THROUGH 2000.

    (a) Extension of Availability of Fiscal Years 1998 and 1999 
Allotments.--Section 2104(g) of the Social Security Act (42 U.S.C. 
1397dd(g)) is amended--
            (1) in paragraph (1)(B)(ii), by striking ``2002'' and 
        inserting ``2003'';
            (2) in paragraph (2)(A)(i), by striking ``2002'' and 
        inserting ``2003''; and
            (3) in paragraph (2)(A)(ii), by striking ``2002'' and 
        inserting ``2003''.
    (b) Application and Modification of BIPA Rule for Redistribution 
and Extended Availability to Allotments for Fiscal Year 2000.--Section 
2104(g) of the Social Security Act (42 U.S.C. 1397dd(g)), as amended by 
subsection (a), is amended--
            (1) in the subsection heading, by striking ``and 1999'' and 
        inserting ``, 1999, and 2000'';
            (2) in paragraph (1)--
                    (A) in subparagraph (A)--
                            (i) in the matter preceding clause (i)--
                                    (I) by inserting ``or for fiscal 
                                year 2000 by the end of fiscal year 
                                2002,'' after ``2001,''; and
                                    (II) by striking ``1998 or 1999'' 
                                and inserting ``1998, 1999, or 2000'';
                            (ii) in clause (i)--
                                    (I) in subclause (I), by striking 
                                ``or'' at the end;
                                    (II) in subclause (II), by striking 
                                the period and inserting ``; or''; and
                                    (III) by adding at the end the 
                                following:
                                    ``(III) the fiscal year 2000 
                                allotment, the amount by which the 
                                State's expenditures under this title 
                                in fiscal years 2000, 2001, and 2002 
                                exceed the State's allotment for fiscal 
                                year 2000 under subsection (b).''; and
                            (iii) in clause (ii), by striking ``1998 or 
                        1999'' and inserting ``1998, 1999, or 2000''; 
                        and
                    (B) in subparagraph (B), in the matter preceding 
                clause (i), by striking ``1998 or 1999'' and inserting 
                ``1998, 1999, or 2000'';
            (3) in paragraph (2)--
                    (A) in the paragraph heading, by striking ``1998 
                and 1999'' and inserting ``1998, 1999, and 2000''; and
                    (B) in subparagraph (A), by adding at the end the 
                following:
                            ``(iii) Fiscal year 2000 allotment.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), of the 
                                amounts allotted to a State pursuant to 
                                this section for fiscal year 2000 that 
                                were not expended by the State by the 
                                end of fiscal year 2002, the amount 
                                specified in subparagraph (B) for 
                                fiscal year 2000 for such State shall 
                                remain available for expenditure by the 
                                State through the end of fiscal year 
                                2003.
                                    ``(II) States with high 
                                unemployment.--In the case of a State 
                                for which the average rate of 
                                unemployment in the State for any 
                                consecutive 2 months of 2002 exceeds 6 
                                percent, as determined by the Secretary 
                                of Labor, the total amount allotted to 
                                the State pursuant to this section for 
                                fiscal year 2000 that was not expended 
                                by the State by the end of fiscal year 
                                2002 shall remain available for 
                                expenditure by the State through the 
                                end of fiscal year 2003 and shall not 
                                be subject to redistribution under 
                                paragraph (1).''; and
            (4) in paragraph (3)--
                    (A) by striking ``or fiscal year 1999'' and 
                inserting ``, fiscal year 1999, or fiscal year 2000''; 
                and
                    (B) by striking ``or November 30, 2001,'' and 
                inserting ``, November 30, 2001, or November 30, 
                2002,''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of section 801 of Medicare, 
Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 
(114 Stat. 2763A-578), as enacted into law by section 1(a)(6) of Public 
Law 106-554.

SEC. 3. AUTHORITY FOR QUALIFYING STATES TO USE SCHIP FUNDS FOR MEDICAID 
              EXPENDITURES.

    (a) Authority for Qualifying States To Use Portion of SCHIP Funds 
for Medicaid Expenditures.--Section 2105 of the Social Security Act 
(42 U.S.C. 1397ee) is amended by adding at the end the following:
    ``(g) Authority for Qualifying States To Use Certain Funds for 
Medicaid Expenditures.--
            ``(1) State option.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, with respect to fiscal year 2003, a 
                qualifying State (as defined in paragraph (2)) may 
                elect to use any or all of the aggregate amount of 
                funds available to the State under this title from 
                allotments made to the State (or redistributed to the 
                State) for fiscal years 1998 through 2000, plus an 
                amount equal to 10 percent of allotments made to the 
                State for each of fiscal years 2001 through 2003, for 
                payments for such fiscal years under title XIX in 
                accordance with subparagraph (B).
                    ``(B) Payments to states.--
                            ``(i) In general.--In the case of a 
                        qualifying State that has elected the option 
                        described in subparagraph (A), subject to the 
                        total amount of funds described with respect to 
                        the State in subparagraph (A), the Secretary 
                        shall pay the State an amount each quarter 
                        equal to the additional amount that would have 
                        been paid to the State under title XIX for 
                        expenditures of the State for the fiscal year 
                        described in clause (ii) if the enhanced FMAP 
                        (as determined under subsection (b)) had been 
                        substituted for the Federal medical assistance 
                        percentage (as defined in section 1905(b)) of 
                        such expenditures.
                            ``(ii) Expenditures described.--For 
                        purposes of clause (i), the expenditures 
                        described in this clause are expenditures for 
                        the fiscal year for providing medical 
                        assistance under title XIX to individuals who 
                        have not attained age 19 or who are pregnant 
                        women.
                    ``(C) Additional payments permitted for certain 
                states.--
                            ``(i) In general.--With respect to fiscal 
                        year 2004 and each fiscal year thereafter, a 
                        qualifying State that also has a State child 
                        health plan that (whether implemented under 
                        title XIX or this title) has the highest income 
                        eligibility standard permitted under this title 
                        as of January 1, 2001, may elect to have the 
                        Secretary pay the State from the allotment for 
                        the State for such fiscal year under subsection 
                        (b) or (c) of section 2104, an amount each 
                        quarter equal to the additional amount that 
                        would have been paid to the State under title 
                        XIX for expenditures of the State for the 
                        fiscal year described in clause (ii) if the 
                        enhanced FMAP (as determined under subsection 
                        (b)) had been substituted for the Federal 
                        medical assistance percentage (as defined in 
                        section 1905(b)) of such expenditures.
                            ``(ii) Expenditures described.--For 
                        purposes of clause (i), the expenditures 
                        described in this clause are expenditures for 
                        the fiscal year for providing medical 
                        assistance under title XIX to individuals who 
                        have not attained age 19 and whose family 
                        income exceeds the minimum income eligibility 
                        level the State is required to establish under 
                        section 1902(l) but does not exceed 200 percent 
                        of the poverty line.
            ``(2) Qualifying state.--In this subsection, the term 
        `qualifying State' means a State that satisfies the following:
                    ``(A) 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.
                    ``(B) 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.
                    ``(C) 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.
                    ``(D) 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.
                    ``(E) Additional requirements.--The State has 
                implemented 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.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if enacted on October 1, 2002.

Summary: Children's Health Protection and Eligibility Act of 2002 - Amends title XXI (SCHIP) of the Social Security Act to: (1) provide for the retention and redistribution through FY 2003 of SCHIP allotments for FY 1998 through 2000. And (2) authorize qualifying States to use SCHIP funds for Medicaid expenditures.