To amend title XXI of the Social Security Act to extend through fiscal year 2012 funding under the State Children's Health Insurance Program (SCHIP).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``SCHIP Full Funding Extension Act of 
2008''.

SEC. 2. EXTENDING SCHIP FUNDING THROUGH FISCAL YEAR 2012.

    (a) Through Fiscal Year 2012.--
            (1) In general.--Section 2104 of the Social Security Act 
        (42 U.S.C. 1397dd), as amended by section 201 of the Medicare, 
        Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-173), 
        is amended--
                    (A) in subsection (a)(11), by striking ``and 2009'' 
                and inserting ``, 2009, 2010, 2011, and 2012''; and
                    (B) in subsection (c)(4)(B), by striking ``through 
                2009'' and inserting ``through 2012''.
            (2) Availability of extended funding.--Funds made available 
        from any allotment made from funds appropriated under 
        subsection (a)(11) or (c)(4)(B) of section 2104 of the Social 
        Security Act (42 U.S.C. 1397dd) for fiscal year 2009, 2010, 
        2011, or 2012 shall not be available for child health 
        assistance for items and services furnished after September 30, 
        2012.
    (b) Extension of Treatment of Qualifying States.--
            (1) In general.--Section 2105(g)(1)(A) of the Social 
        Security Act (42 U.S.C. 1397ee(g)(1)(A)), as amended by section 
        201(b) of the Medicare, Medicaid, and SCHIP Extension Act of 
        2007 (Public Law 110-173), is amended by striking ``or 2009'' 
        and inserting ``2009, 2010, 2011, or 2012''.
            (2) Conforming amendment.--Section 201(b) of such Public 
        Law is amended by striking paragraph (2).
    (c) Additional Allotments To Maintain SCHIP Programs Through Fiscal 
Year 2012.--Section 2104 of the Social Security Act (42 U.S.C. 1397dd) 
is amended by striking subsection (l) and inserting the following new 
subsections:
    ``(l) Additional Allotments To Maintain SCHIP Programs for Fiscal 
Year 2009.--
            ``(1) Appropriation; allotment authority.--For the purpose 
        of providing additional allotments described in subparagraphs 
        (A) and (B) of paragraph (3), there is appropriated, out of any 
        money in the Treasury not otherwise appropriated, such sums as 
        may be necessary, not to exceed $2,000,000,000 for fiscal year 
        2009.
            ``(2) Shortfall states described.--For purposes of 
        paragraph (3), a shortfall State described in this paragraph is 
        a State with a State child health plan approved under this 
        title for which the Secretary estimates, on the basis of the 
        most recent data available to the Secretary, that the Federal 
        share amount of the projected expenditures under such plan for 
        such State for fiscal year 2009 will exceed the sum of--
                    ``(A) the amount of the State's allotments for each 
                of fiscal years 2007 and 2008 that will not be expended 
                by the end of fiscal year 2008;
                    ``(B) the amount, if any, that is to be 
                redistributed to the State during fiscal year 2009 in 
                accordance with subsection (i); and
                    ``(C) the amount of the State's allotment for 
                fiscal year 2009.
            ``(3) Allotments.--In addition to the allotments provided 
        under subsections (b) and (c), subject to paragraph (4), of the 
        amount available for the additional allotments under paragraph 
        (1) for fiscal year 2009, the Secretary shall allot--
                    ``(A) to each shortfall State described in 
                paragraph (2) not described in subparagraph (B), such 
                amount as the Secretary determines will eliminate the 
                estimated shortfall described in such paragraph for the 
                State; and
                    ``(B) to each commonwealth or territory described 
                in subsection (c)(3), an amount equal to the percentage 
                specified in subsection (c)(2) for the commonwealth or 
                territory multiplied by 1.05 percent of the sum of the 
                amounts determined for each shortfall State under 
                subparagraph (A).
            ``(4) Proration rule.--If the amounts available for 
        additional allotments under paragraph (1) are less than the 
        total of the amounts determined under subparagraphs (A) and (B) 
        of paragraph (3), the amounts computed under such subparagraphs 
        shall be reduced proportionally.
            ``(5) Retrospective adjustment.--The Secretary may adjust 
        the estimates and determinations made to carry out this 
        subsection as necessary on the basis of the amounts reported by 
        States not later than November 30, 2008, on CMS Form 64 or CMS 
        Form 21, as the case may be, and as approved by the Secretary.
            ``(6) One-year availability; no redistribution of 
        unexpended additional allotments.--Notwithstanding subsections 
        (e) and (f), amounts allotted to a State pursuant to this 
        subsection for fiscal year 2009, subject to paragraph (5), 
        shall only remain available for expenditure by the State 
        through September 30, 2009. Any amounts of such allotments that 
        remain unexpended as of such date shall not be subject to 
        redistribution under subsection (f).
    ``(m) Additional Allotments To Maintain SCHIP Programs for Fiscal 
Year 2010.--
            ``(1) Appropriation; allotment authority.--For the purpose 
        of providing additional allotments described in subparagraphs 
        (A) and (B) of paragraph (3), there is appropriated, out of any 
        money in the Treasury not otherwise appropriated, such sums as 
        may be necessary, not to exceed $3,000,000,000 for fiscal year 
        2010.
            ``(2) Shortfall states described.--For purposes of 
        paragraph (3), a shortfall State described in this paragraph is 
        a State with a State child health plan approved under this 
        title for which the Secretary estimates, on the basis of the 
        most recent data available to the Secretary, that the Federal 
        share amount of the projected expenditures under such plan for 
        such State for fiscal year 2010 will exceed the sum of--
                    ``(A) the amount of the State's allotments for each 
                of fiscal years 2008 and 2009 that will not be expended 
                by the end of fiscal year 2009;
                    ``(B) the amount, if any, that is to be 
                redistributed to the State during fiscal year 2010 in 
                accordance with subsection (f); and
                    ``(C) the amount of the State's allotment for 
                fiscal year 2010.
            ``(3) Allotments.--In addition to the allotments provided 
        under subsections (b) and (c), subject to paragraph (4), of the 
        amount available for the additional allotments under paragraph 
        (1) for fiscal year 2010, the Secretary shall allot--
                    ``(A) to each shortfall State described in 
                paragraph (2) not described in subparagraph (B) such 
                amount as the Secretary determines will eliminate the 
                estimated shortfall described in such paragraph for the 
                State; and
                    ``(B) to each commonwealth or territory described 
                in subsection (c)(3), an amount equal to the percentage 
                specified in subsection (c)(2) for the commonwealth or 
                territory multiplied by 1.05 percent of the sum of the 
                amounts determined for each shortfall State under 
                subparagraph (A).
            ``(4) Proration rule.--If the amounts available for 
        additional allotments under paragraph (1) are less than the 
        total of the amounts determined under subparagraphs (A) and (B) 
        of paragraph (3), the amounts computed under such subparagraphs 
        shall be reduced proportionally.
            ``(5) Retrospective adjustment.--The Secretary may adjust 
        the estimates and determinations made to carry out this 
        subsection as necessary on the basis of the amounts reported by 
        States not later than November 30, 2010, on CMS Form 64 or CMS 
        Form 21, as the case may be, and as approved by the Secretary.
            ``(6) Availability; no redistribution of unexpended 
        additional allotments.--Notwithstanding subsections (e) and 
        (f), amounts allotted to a State pursuant to this subsection 
        for fiscal year 2010, subject to paragraph (5), shall only 
        remain available for expenditure by the State through September 
        30, 2010. Any amounts of such allotments that remain unexpended 
        as of such date shall not be subject to redistribution under 
        subsection (f).
    ``(n) Application to Fiscal Years 2011 and 2012.--
            ``(1) In general.--Subject to paragraph (2), subsection (m) 
        shall apply to each of fiscal years 2011 and 2012 in the same 
        manner such subsection applies to fiscal year 2010.
            ``(2) Application.--In applying subsection (m) under 
        paragraph (1) with respect to--
                    ``(A) fiscal year 2011--
                            ``(i) each reference to a year or date in 
                        such subsection shall be deemed a reference to 
                        the following year or to one year after such 
                        date, respectively; and
                            ``(ii) the reference to `$3,000,000,000' in 
                        paragraph (1) of such subsection shall be 
                        deemed a reference to `$4,000,000,000'; and
                    ``(B) fiscal year 2012--
                            ``(i) each reference to a year or date in 
                        such subsection shall be deemed a reference to 
                        the second following year or to two year after 
                        such date, respectively; and
                            ``(ii) the reference to `$3,000,000,000' in 
                        paragraph (1) of such subsection shall be 
                        deemed a reference to `$5,000,000,000'.''.

SEC. 3. OPTION FOR QUALIFYING STATES TO RECEIVE THE ENHANCED PORTION OF 
              THE SCHIP MATCHING RATE FOR MEDICAID COVERAGE OF CERTAIN 
              CHILDREN.

    Section 2105(g) of the Social Security Act (42 U.S.C. 1397ee(g)) is 
amended--
            (1) in paragraph (1)(A), by inserting ``subject to 
        paragraph (4),'' after ``Notwithstanding any other provision of 
        law,''; and
            (2) by adding at the end the following new paragraph:
            ``(4) Option for certain allotments.--
                    ``(A) Payment of enhanced portion of matching rate 
                for certain expenditures.--In the case of expenditures 
                described in subparagraph (B), a qualifying State (as 
                defined in paragraph (2)) may elect to be paid from the 
                State's allotment made under section 2104 for any 
                fiscal year (beginning with fiscal year 2009) (insofar 
                as the allotment is available to the State under 
                subsection (e) of such section) an amount each quarter 
                equal to the additional amount that would have been 
                paid to the State under title XIX with respect to such 
                expenditures if the enhanced FMAP (as determined under 
                subsection (b)) had been substituted for the Federal 
                medical assistance percentage (as defined in section 
                1905(b)).
                    ``(B) Expenditures described.--For purposes of 
                subparagraph (A), the expenditures described in this 
                subparagraph are expenditures made after the date of 
                the enactment of this paragraph and during the period 
                in which funds are available to the qualifying State 
                for use under subparagraph (A), for the provision of 
                medical assistance to individuals residing in the State 
                who are eligible for medical assistance under the State 
                plan under title XIX or under a waiver of such plan and 
                who have not attained age 19, and whose family income 
                equals or exceeds 133 percent of the poverty line but 
                does not exceed the Medicaid applicable income 
                level.''.

Summary: SCHIP Full Funding Extension Act of 2008 - Amends title XXI (SCHIP) of the Social Security Act to extend through FY2012 funding under the SCHIP program, including additional allotments to maintain SCHIP funding for such fiscal years in shortfall states. Grants qualifying states the option to receive the enhanced portion of the SCHIP matching rate for Medicaid coverage of certain children.