II

107TH CONGRESS

1ST SESSION S. 1244

To amend titles XIX and XXI of the Social Security Act to provide for

FamilyCare coverage for parents of enrolled children, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 25, 2001

Mr. KENNEDY (for himself, Ms. SNOWE, Mr. ROCKEFELLER, Mr. CHAFEE,

Ms. COLLINS, Mr. DASCHLE, Mr. BAUCUS, Mr. BREAUX, Mr.

TORRICELLI, Mrs. LINCOLN, Mr. GRAHAM, Mr. BINGAMAN, Mr. KERRY,

Mrs. CLINTON, and Mr. CORZINE) introduced the following bill; which

was read twice and referred to the Committee on Finance

A BILL

To amend titles XIX and XXI of the Social Security Act

to provide for FamilyCare coverage for parents of enrolled children, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE OF TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘FamilyCare Act of 2001’’.

6 (b) TABLE OF CONTENTS.—The table of contents of

7 this Act is as follows:

Sec. 1. Short title of title; table of contents.

Sec. 2. Renaming of title XXI program.
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Sec. 3. FamilyCare coverage of parents under the medicaid program and title

XXI.

Sec. 4. Automatic enrollment of children born to title XXI parents.

Sec. 5. Optional coverage of legal immigrants under the medicaid program and

title XXI.

Sec. 6. Optional coverage of children through age 20 under the medicaid program and title XXI.

Sec. 7. Application of simplified title XXI procedures under the medicaid program.

Sec. 8. Improving welfare-to-work transition under the medicaid program.

Sec. 9. Elimination of 100 hour rule and other AFDC-related eligibility restrictions.

Sec. 10. State grant program for market innovation.

Sec. 11. Limitations on conflicts of interest.

Sec. 12. Increase in CHIP allotment for each of fiscal years 2002 through

2004.

Sec. 13. Demonstration programs to improve medicaid and CHIP outreach to

homeless individuals and families.

Sec. 14. Technical and conforming amendments to authority to pay medicaid

expansion costs from title XXI appropriation.

Sec. 15. Additional CHIP revisions.

1 SEC. 2. RENAMING OF TITLE XXI PROGRAM.

2 (a) IN GENERAL.—The heading of title XXI of the

3 Social Security Act (42 U.S.C. 1397aa et seq.) is amended

4 to read as follows:

5 ‘‘TITLE XXI—FAMILYCARE PROGRAM’’.

6 (b) PROGRAM REFERENCES.—Any reference in any

7 provision of Federal law or regulation to ‘‘SCHIP’’ or

8 ‘‘State children’s health insurance program’’ under title

9 XXI of the Social Security Act shall be deemed a reference

10 to the FamilyCare program under such title.

11 SEC. 3. FAMILYCARE COVERAGE OF PARENTS UNDER THE

12 MEDICAID PROGRAM AND TITLE XXI.

13 (a) INCENTIVES TO IMPLEMENT FAMILYCARE COV14 ERAGE.—

15 (1) UNDER MEDICAID.—
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1 (A) ESTABLISHMENT OF NEW OPTIONAL

2 ELIGIBILITY CATEGORY.—Section

3 1902(a)(10)(A)(ii) of the Social Security Act

4 (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended—

5 (i) by striking ‘‘or’’ at the end of sub6 clause (XVII);

7 (ii) by adding ‘‘or’’ at the end of sub8 clause (XVIII); and

9 (iii) by adding at the end the fol10 lowing:

11 ‘‘(XIX) who are individuals de12 scribed in subsection (k)(1) (relating

13 to parents of categorically eligible chil14 dren);’’.

15 (B) PARENTS DESCRIBED.—Section 1902

16 of the Social Security Act is further amended

17 by inserting after subsection (j) the following:

18 ‘‘(k)(1)(A) Individuals described in this paragraph

19 are individuals—

20 ‘‘(i) who are the parents of an individual who

21 is under 19 years of age (or such higher age as the

22 State may have elected under section 1902(l)(1)(D))

23 and who is eligible for medical assistance under sub24 section (a)(10)(A);
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1 ‘‘(ii) who are not otherwise eligible for medical

2 assistance under such subsection, under section

3 1931, or under a waiver approved under section

4 1115 or otherwise (except under subsection

5 (a)(10)(A)(ii)(XIX)); and

6 ‘‘(iii) whose family income exceeds the income

7 level applicable under the State plan under part A

8 of title IV as in effect as of July 16, 1996, but does

9 not exceed the highest income level applicable to a

10 child in the family under this title.

11 ‘‘(B) In establishing an income eligibility level for in12 dividuals described in this paragraph, a State may vary

13 such level consistent with the various income levels estab14 lished under subsection (l)(2) based on the ages of chil15 dren described in subsection (l)(1) in order to ensure, to

16 the maximum extent possible, that such individuals shall

17 be enrolled in the same program as their children.

18 ‘‘(C) An individual may not be treated as being de19 scribed in this paragraph unless, at the time of the individ20 ual’s enrollment under this title, the child referred to in

21 subparagraph (A)(i) of the individual is also enrolled

22 under this title.

23 ‘‘(D) In this subsection, the term ‘parent’ includes

24 an individual treated as a caregiver for purposes of car25 rying out section 1931.
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1 ‘‘(2) In the case of a parent described in paragraph

2 (1) who is also the parent of a child who is eligible for

3 child health assistance under title XXI, the State may

4 elect (on a uniform basis) to cover all such parents under

5 section 2111 or under this title.’’.

6 (C) ENHANCED MATCHING FUNDS AVAIL7 ABLE IF CERTAIN CONDITIONS MET.—Section

8 1905 of the Social Security Act (42 U.S.C.

9 1396d) is amended—

10 (i) in the fourth sentence of sub11 section (b), by striking ‘‘or subsection

12 (u)(3)’’ and inserting ‘‘, (u)(3), or (u)(4)’’;

13 and

14 (ii) in subsection (u)—

15 (I) by redesignating paragraph

16 (4) as paragraph (6), and

17 (II) by inserting after paragraph

18 (3) the following:

19 ‘‘(4) For purposes of subsection (b) and section

20 2105(a)(1):

21 ‘‘(A) FAMILYCARE PARENTS.—The expendi22 tures described in this subparagraph are the expend23 itures described in the following clauses (i) and (ii):

24 ‘‘(i) PARENTS.—If the conditions described

25 in clause (iii) are met, expenditures for medical
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1 assistance for parents described in section

2 1902(k)(1) and for parents who would be de3 scribed in such section but for the fact that

4 they are eligible for medical assistance under

5 section 1931 or under a waiver approved under

6 section 1115.

7 ‘‘(ii) CERTAIN PREGNANT WOMEN.—Ex8 penditures for medical assistance for pregnant

9 women under section 1902(l)(1)(A) in a family

10 the income of which exceeds the income level

11 applicable under section 1902(l)(2)(A) to a

12 family of the size involved as of January 1,

13 2000.

14 ‘‘(iii) CONDITIONS.—The conditions de15 scribed in this clause are the following:

16 ‘‘(I) The State has a State child

17 health plan under title XXI which (wheth18 er implemented under such title or under

19 this title) has an effective income level for

20 children that is at least 200 percent of the

21 poverty line.

22 ‘‘(II) Such State child health plan

23 does not limit the acceptance of applica24 tions, does not use a waiting list for chil25 dren who meet eligibility standards to
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1 qualify for assistance, and provides bene2 fits to all children in the State who apply

3 for and meet eligibility standards.

4 ‘‘(III) The State plans under this title

5 and title XXI do not provide coverage for

6 parents with higher family income without

7 covering parents with a lower family in8 come.

9 ‘‘(IV) The State does not apply an in10 come level for parents that is lower than

11 the effective income level (expressed as a

12 percent of the poverty line) that has been

13 specified under the State plan under title

14 XIX (including under a waiver authorized

15 by the Secretary or under section

16 1902(r)(2)), as of January 1, 2000, to be

17 eligible for medical assistance as a parent

18 under this title.

19 ‘‘(iv) DEFINITIONS.—For purposes of this

20 subsection:

21 ‘‘(I) The term ‘parent’ has the mean22 ing given such term for purposes of section

23 1902(k)(1).
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1 ‘‘(II) The term ‘poverty line’ has the

2 meaning given such term in section

3 2110(c)(5).’’.

4 (D) APPROPRIATION FROM TITLE XXI AL5 LOTMENT FOR CERTAIN MEDICAID EXPANSION

6 COSTS.—Subparagraph (B) of section

7 2105(a)(1) of the Social Security Act, as

8 amended by section 14(a), is amended to read

9 as follows:

10 ‘‘(B) FAMILYCARE PARENTS.—Expendi11 tures for medical assistance that is attributable

12 to expenditures described in section

13 1905(u)(4)(A).’’.

14 (E) ONLY COUNTING ENHANCED PORTION

15 FOR COVERAGE OF ADDITIONAL PREGNANT

16 WOMEN.—Section 1905 of the Social Security

17 Act (42 U.S.C. 1396d) is amended—

18 (i) in the fourth sentence of sub19 section (b), by inserting ‘‘(except in the

20 case of expenditures described in sub21 section (u)(5))’’ after ‘‘do not exceed’’;

22 (ii) in subsection (u), by inserting

23 after paragraph (4) (as inserted by sub24 paragraph (C)), the following:
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1 ‘‘(5) For purposes of the fourth sentence of sub2 section (b) and section 2105(a), the following payments

3 under this title do not count against a State’s allotment

4 under section 2104:

5 ‘‘(A) REGULAR FMAP FOR EXPENDITURES FOR

6 PREGNANT WOMEN WITH INCOME ABOVE JANUARY

7 1, 2000 INCOME LEVEL AND BELOW 185 PERCENT OF

8 POVERTY.—The portion of the payments made for

9 expenditures described in paragraph (4)(A)(ii) that

10 represents the amount that would have been paid if

11 the enhanced FMAP had not been substituted for

12 the Federal medical assistance percentage.’’.

13 (2) UNDER TITLE XXI.—

14 (A) FAMILYCARE COVERAGE.—Title XXI

15 of the Social Security Act (42 U.S.C. 1397aa et

16 seq.) is amended by adding at the end the fol17 lowing:

18 ‘‘SEC. 2111. OPTIONAL FAMILYCARE COVERAGE OF PAR19 ENTS OF TARGETED LOW-INCOME CHILDREN.

20 ‘‘(a) OPTIONAL COVERAGE.—Notwithstanding any

21 other provision of this title, a State child health plan may

22 provide for coverage, through an amendment to its State

23 child health plan under section 2102, of FamilyCare as24 sistance for individuals who are targeted low-income par25 ents in accordance with this section, but only if—
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1 ‘‘(1) the State meets the conditions described in

2 section 1905(u)(4)(A)(iii); and

3 ‘‘(2) the State elects to provide medical assist4 ance under section 1902(a)(10)(A)(ii)(XIX), under

5 section 1931, or under a waiver under section 1115

6 to individuals described in section 1902(k)(1)(A)(i)

7 and elects an applicable income level for such indi8 viduals that consistent with paragraphs (1)(B) and

9 (2) of section 1902(k), ensures to the maximum ex10 tent possible, that those individuals shall be enrolled

11 in the same program as their children if their chil12 dren are eligible for coverage under title XIX (in13 cluding under a waiver authorized by the Secretary

14 or under section 1902(r)(2)).’’.

15 ‘‘(b) DEFINITIONS.—For purposes of this title:

16 ‘‘(1) FAMILYCARE ASSISTANCE.—The term

17 ‘FamilyCare assistance’ has the meaning given the

18 term child health assistance in section 2110(a) as if

19 any reference to targeted low-income children were

20 a reference to targeted low-income parents.

21 ‘‘(2) TARGETED LOW-INCOME PARENT.—The

22 term ‘targeted low-income parent’ has the meaning

23 given the term targeted low-income child in section

24 2110(b) as if the reference to a child were deemed
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1 a reference to a parent (as defined in paragraph (3))

2 of the child; except that in applying such section—

3 ‘‘(A) there shall be substituted for the in4 come level described in paragraph (1)(B)(ii)(I)

5 the applicable income level in effect for a tar6 geted low-income child;

7 ‘‘(B) in paragraph (3), January 1, 2000,

8 shall be substituted for July 1, 1997; and

9 ‘‘(C) in paragraph (4), January 1, 2000,

10 shall be substituted for March 31, 1997.

11 ‘‘(3) PARENT.—The term ‘parent’ includes an

12 individual treated as a caregiver for purposes of car13 rying out section 1931.

14 ‘‘(4) OPTIONAL TREATMENT OF PREGNANT

15 WOMEN AS PARENTS.—A State child health plan

16 may treat a pregnant woman who is not otherwise

17 a parent as a targeted low-income parent for pur18 poses of this section but only if the State has estab19 lished an income level under section 1902(l)(2)(A)(i)

20 for pregnant women that is at least 185 percent of

21 the income official poverty line described in such sec22 tion.

23 ‘‘(c) REFERENCES TO TERMS AND SPECIAL

24 RULES.—In the case of, and with respect to, a State pro25 viding for coverage of FamilyCare assistance to targeted
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1 low-income parents under subsection (a), the following

2 special rules apply:

3 ‘‘(1) Any reference in this title (other than sub4 section (b)) to a targeted low-income child is deemed

5 to include a reference to a targeted low-income par6 ent.

7 ‘‘(2) Any such reference to child health assist8 ance with respect to such parents is deemed a ref9 erence to FamilyCare assistance.

10 ‘‘(3) In applying section 2103(e)(3)(B) in the

11 case of a family provided coverage under this sec12 tion, the limitation on total annual aggregate cost13 sharing shall be applied to the entire family.

14 ‘‘(4) In applying section 2110(b)(4), any ref15 erence to ‘section 1902(l)(2) or 1905(n)(2) (as se16 lected by a State)’ is deemed a reference to the in17 come level applicable to parents under section 1931

18 or under a waiver approved under section 1115, or,

19 in the case of a pregnant woman described in sub20 section (b)(4), the income level established under

21 section 1902(l)(2)(A).

22 ‘‘(5) In applying section 2102(b)(3)(B), any

23 reference to children is deemed a reference to par24 ents.’’.
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1 (B) ADDITIONAL ALLOTMENT FOR STATES

2 PROVIDING FAMILYCARE.—

3 (i) IN GENERAL.—Section 2104 of the

4 Social Security Act (42 U.S.C. 1397dd) is

5 amended by inserting after subsection (c)

6 the following:

7 ‘‘(d) ADDITIONAL ALLOTMENTS FOR STATE PRO8 VIDING FAMILYCARE.—

9 ‘‘(1) APPROPRIATION; TOTAL ALLOTMENT.—

10 For the purpose of providing additional allotments

11 to States to provide FamilyCare coverage under sec12 tion 2111, there is appropriated, out of any money

13 in the Treasury not otherwise appropriated—

14 ‘‘(A) for fiscal year 2002, $2,000,000,000;

15 ‘‘(B) for fiscal year 2003, $2,000,000,000;

16 ‘‘(C) for fiscal year 2004, $3,000,000,000;

17 ‘‘(D) for fiscal year 2005, $3,000,000,000;

18 ‘‘(E) for fiscal year 2006, $6,000,000,000;

19 ‘‘(F) for fiscal year 2007, $7,000,000,000;

20 ‘‘(G) for fiscal year 2008, $8,000,000,000;

21 ‘‘(H) for fiscal year 2009, $9,000,000,000;

22 ‘‘(I) for fiscal year 2010, $10,000,000,000;

23 and

24 ‘‘(J) for fiscal year 2011 and each fiscal

25 year thereafter, the amount of the allotment
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1 provided under this paragraph for the preceding

2 fiscal year increased by the percentage increase

3 (if any) in the medical care expenditure cat4 egory of the Consumer Price Index for All

5 Urban Consumers (United States city average).

6 ‘‘(2) STATE AND TERRITORIAL ALLOTMENTS.—

7 ‘‘(A) IN GENERAL.—In addition to the al8 lotments provided under subsections (b) and

9 (c), subject to paragraphs (3) and (4), of the

10 amount available for the additional allotments

11 under paragraph (1) for a fiscal year, the Sec12 retary shall allot to each State with a State

13 child health plan approved under this title—

14 ‘‘(i) in the case of such a State other

15 than a commonwealth or territory de16 scribed in clause (ii), the same proportion

17 as the proportion of the State’s allotment

18 under subsection (b) (determined without

19 regard to subsection (f)) to 98.95 percent

20 of the total amount of the allotments

21 under such section for such States eligible

22 for an allotment under this subparagraph

23 for such fiscal year; and

24 ‘‘(ii) in the case of a commonwealth or

25 territory described in subsection (c)(3), the
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1 same proportion as the proportion of the

2 commonwealth’s or territory’s allotment

3 under subsection (c) (determined without

4 regard to subsection (f)) to 1.05 percent of

5 the total amount of the allotments under

6 such section for commonwealths and terri7 tories eligible for an allotment under this

8 subparagraph for such fiscal year.

9 ‘‘(B) AVAILABILITY AND REDISTRIBUTION

10 OF UNUSED ALLOTMENTS.—In applying sub11 sections (e) and (f) with respect to additional

12 allotments made available under this subsection,

13 the procedures established under such sub14 sections shall ensure such additional allotments

15 are only made available to States which have

16 elected to provide coverage under section 2111.

17 ‘‘(3) USE OF ADDITIONAL ALLOTMENT.—Addi18 tional allotments provided under this subsection are

19 not available for amounts expended before October

20 1, 2001. Such amounts are available for amounts ex21 pended on or after such date for child health assist22 ance for targeted low-income children, as well as for

23 FamilyCare assistance.

24 ‘‘(4) REQUIRING ELECTION TO PROVIDE

25 FAMILYCARE COVERAGE.—No payments may be
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1 made to a State under this title from an allotment

2 provided under this subsection unless the State has

3 made an election to provide FamilyCare assist4 ance.’’.

5 (ii) CONFORMING AMENDMENTS.—

6 Section 2104 of the Social Security Act

7 (42 U.S.C. 1397dd) is amended—

8 (I) in subsection (a), by inserting

9 ‘‘subject to subsection (d),’’ after

10 ‘‘under this section,’’;

11 (II) in subsection (b)(1), by in12 serting ‘‘and subsection (d)’’ after

13 ‘‘Subject to paragraph (4)’’; and

14 (III) in subsection (c)(1), by in15 serting ‘‘subject to subsection (d),’’

16 after ‘‘for a fiscal year,’’.

17 (C) NO COST-SHARING FOR PREGNANCY18 RELATED BENEFITS.—Section 2103(e)(2) of

19 the Social Security Act (42 U.S.C.

20 1397cc(e)(2)) is amended—

21 (i) in the heading, by inserting ‘‘AND

22 PREGNANCY-RELATED SERVICES’’ after

23 ‘‘PREVENTIVE SERVICES’’; and
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1 (ii) by inserting before the period at

2 the end the following: ‘‘and for pregnancy3 related services’’.

4 (3) EFFECTIVE DATE.—The amendments made

5 by this subsection apply to items and services fur6 nished on or after October 1, 2001, whether or not

7 regulations implementing such amendments have

8 been issued.

9 (b) RULES FOR IMPLEMENTATION BEGINNING WITH

10 FISCAL YEAR 2005.—

11 (1) REQUIRED COVERAGE OF FAMILYCARE PAR12 ENTS.—Section 1902(a)(10)(A)(i) of the Social Se13 curity Act (42 U.S.C. 1396a(a)(10)(A)(i)) is

14 amended—

15 (A) by striking ‘‘or’’ at the end of sub16 clause (VI);

17 (B) by striking the semicolon at the end of

18 subclause (VII) and insert ‘‘, or’’; and

19 (C) by adding at the end the following:

20 ‘‘(VIII) who are described in sub21 section (k)(1) (or would be described

22 if subparagraph (A)(ii) of such sub23 section did not apply) and who are in

24 families with incomes that do not ex25 ceed 100 percent of the poverty line
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1 applicable to a family of the size in2 volved;’’.

3 (2) EXPANSION OF AVAILABILITY OF EN4 HANCED MATCH UNDER MEDICAID FOR PRE-CHIP

5 EXPANSIONS.—Paragraph (4) of section 1905(u) of

6 the Social Security Act (42 U.S.C. 1396d(u)), as in7 serted by subsection (a)(1)(C), is amended—

8 (A) by amending clause (ii) of subpara9 graph (A) to read as follows:

10 ‘‘(ii) CERTAIN PREGNANT WOMEN.—Ex11 penditures for medical assistance for pregnant

12 women under section 1902(l)(1)(A) in a family

13 the income of which exceeds the 133 percent of

14 the income official poverty line.’’; and

15 (B) by adding at the end the following:

16 ‘‘(B) CHILDREN IN FAMILIES WITH INCOME

17 ABOVE MEDICAID MANDATORY LEVEL NOT PRE18 VIOUSLY DESCRIBED.—The expenditures described

19 in this subparagraph are expenditures (other than

20 expenditures described in paragraph (2) or (3)) for

21 medical assistance made available to any child who

22 is eligible for assistance under section

23 1902(a)(10)(A) (other than under clause (i)) and

24 the income of whose family exceeds the minimum in25 come level required under subsection 1902(l)(2) (or,
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1 if higher, the minimum level required under section

2 1931 for that State) for a child of the age involved

3 (treating any child who is 19 or 20 years of age as

4 being 18 years of age).’’.

5 (3) OFFSET OF ADDITIONAL EXPENDITURES

6 FOR ENHANCED MATCH FOR PRE-CHIP EXPANSION;

7 ELIMINATION OF OFFSET FOR REQUIRED COVERAGE

8 OF FAMILYCARE PARENTS.—

9 (A) IN GENERAL.—Section 1905(u)(5) of

10 the Social Security Act (42 U.S.C.

11 1396d(u)(5)), as added by subsection (a)(1)(E),

12 is amended—

13 (i) by amending subparagraph (A) to

14 read as follows:

15 ‘‘(A) REGULAR FMAP FOR EXPENDITURES FOR

16 PREGNANT WOMEN WITH INCOME ABOVE 133 PER17 CENT OF POVERTY.—The portion of the payments

18 made for expenditures described in paragraph

19 (4)(A)(ii) that represents the amount that would

20 have been paid if the enhanced FMAP had not been

21 substituted for the Federal medical assistance per22 centage.’’; and

23 (ii) by adding at the end the fol24 lowing:
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1 ‘‘(B) FAMILYCARE PARENTS UNDER 100 PER2 CENT OF POVERTY.—Payments for expenditures de3 scribed in paragraph (4)(A)(i) in the case of parents

4 whose income does not exceed 100 percent of the in5 come official poverty line applicable to a family of

6 the size involved.

7 ‘‘(C) REGULAR FMAP FOR EXPENDITURES FOR

8 CERTAIN CHILDREN IN FAMILIES WITH INCOME

9 ABOVE MEDICAID MANDATORY LEVEL.—The portion

10 of the payments made for expenditures described in

11 paragraph (4)(B) that represents the amount that

12 would have been paid if the enhanced FMAP had

13 not been substituted for the Federal medical assist14 ance percentage.’’.

15 (B) CONFORMING AMENDMENTS.—Sub16 paragraph (B) of section 2105(a)(1) of the So17 cial Security Act, as amended by section 14(a)

18 and subsection (a)(1)(D), is amended to read as

19 follows:

20 ‘‘(B) CERTAIN FAMILYCARE PARENTS AND

21 OTHERS.—Expenditures for medical assistance

22 that is attributable to expenditures described in

23 section 1905(u)(4), except as provided in sec24 tion 1905(u)(5).’’.
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1 (4) EFFECTIVE DATE.—The amendments made

2 by this subsection apply as of October 1, 2004, to

3 fiscal years beginning on or after such date and to

4 expenditures under the State plan on and after such

5 date, whether or not regulations implementing such

6 amendments have been issued.

7 (c) MAKING TITLE XXI BASE ALLOTMENTS PERMA8 NENT.—Section 2104(a) of the Social Security Act (42

9 U.S.C. 1397dd(a)) is amended—

10 (1) by striking ‘‘and’’ at the end of paragraph

11 (9);

12 (2) by striking the period at the end of para13 graph (10) and inserting ‘‘; and’’; and

14 (3) by adding at the end the following:

15 ‘‘(11) for fiscal year 2008 and each fiscal year

16 thereafter, the amount of the allotment provided

17 under this subsection for the preceding fiscal year

18 increased by the percentage increase (if any) in the

19 medical care expenditure category of the Consumer

20 Price Index for All Urban Consumers (United States

21 city average).’’.

22 (d) OPTIONAL APPLICATION OF PRESUMPTIVE ELI23 GIBILITY PROVISIONS TO PARENTS.—Section 1920A of

24 the Social Security Act (42 U.S.C. 1396r–1a) is amended

25 by adding at the end the following:
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1 ‘‘(e) A State may elect to apply the previous provi2 sions of this section to provide for a period of presumptive

3 eligibility for medical assistance for a parent (as defined

4 for purposes of section 1902(k)(1)) of a child with respect

5 to whom such a period is provided under this section.’’.

6 (e) CONFORMING AMENDMENTS.—

7 (1) ELIGIBILITY CATEGORIES.—Section

8 1905(a) of the Social Security Act (42 U.S.C.

9 1396d(a)) is amended, in the matter before para10 graph (1)—

11 (A) by striking ‘‘or’’ at the end of clause

12 (xii);

13 (B) by inserting ‘‘or’’ at the end of clause

14 (xiii); and

15 (C) by inserting after clause (xiii) the fol16 lowing:

17 ‘‘(xiv) who are parents described (or treated as

18 if described) in section 1902(k)(1),’’.

19 (2) INCOME LIMITATIONS.—Section 1903(f)(4)

20 of the Social Security Act (42 U.S.C. 1396b(f)(4))

21 is amended—

22 (A) effective October 1, 2004, by inserting

23 ‘‘1902(a)(10)(A)(i)(VIII),’’ after

24 ‘‘1902(a)(10)(A)(i)(VII),’’; and
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1 (B) by inserting

2 ‘‘1902(a)(10)(A)(ii)(XIX),’’ after

3 ‘‘1902(a)(10)(A)(ii)(XVIII),’’.

4 (3) CONFORMING AMENDMENT RELATING TO

5 NO WAITING PERIOD FOR PREGNANT WOMEN.—Sec6 tion 2102(b)(1)(B) of the Social Security Act (42

7 U.S.C. 1397bb(b)(1)(B)) is amended—

8 (A) by striking ‘‘, and’’ at the end of

9 clause (i) and inserting a semicolon;

10 (B) by striking the period at the end of

11 clause (ii) and inserting ‘‘; and’’; and

12 (C) by adding at the end the following:

13 ‘‘(iii) may not apply a waiting period

14 (including a waiting period to carry out

15 paragraph (3)(C)) in the case of a targeted

16 low-income parent who is pregnant.’’.

17 SEC. 4. AUTOMATIC ENROLLMENT OF CHILDREN BORN TO

18 TITLE XXI PARENTS.

19 Section 2102(b)(1) of the Social Security Act (42

20 U.S.C. 1397bb(b)(1)) is amended by adding at the end

21 the following:

22 ‘‘(C) AUTOMATIC ELIGIBILITY OF CHIL23 DREN BORN TO A PARENT BEING PROVIDED

24 FAMILYCARE.—Such eligibility standards shall

25 provide for automatic coverage of a child born
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1 to an individual who is provided assistance

2 under this title in the same manner as medical

3 assistance would be provided under section

4 1902(e)(4) to a child described in such sec5 tion.’’.

6 SEC. 5. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS

7 UNDER THE MEDICAID PROGRAM AND TITLE

8 XXI.

9 (a) MEDICAID PROGRAM.—Section 1903(v) of the

10 Social Security Act (42 U.S.C. 1396b(v)) is amended—

11 (1) in paragraph (1), by striking ‘‘paragraph

12 (2)’’ and inserting ‘‘paragraphs (2) and (4)’’; and

13 (2) by adding at the end the following:

14 ‘‘(4)(A) A State may elect (in a plan amendment

15 under this title) to provide medical assistance under this

16 title, notwithstanding sections 401(a), 402(b), 403, and

17 421 of the Personal Responsibility and Work Opportunity

18 Reconciliation Act of 1996, for aliens who are lawfully re19 siding in the United States (including battered aliens de20 scribed in section 431(c) of such Act) and who are other21 wise eligible for such assistance, within any of the fol22 lowing eligibility categories:

23 ‘‘(i) PREGNANT WOMEN.—Women during preg24 nancy (and during the 60-day period beginning on

25 the last day of the pregnancy).
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1 ‘‘(ii) CHILDREN.—Children (as defined under

2 such plan), including optional targeted low-income

3 children described in section 1905(u)(2)(B).

4 ‘‘(iii) PARENTS.—If the State has elected the

5 eligibility category described in clause (ii), caretaker

6 relatives who are parents (including individuals

7 treated as a caregiver for purposes of carrying out

8 section 1931) of children (described in such clause

9 or otherwise) who are eligible for medical assistance

10 under the plan.

11 ‘‘(B) In the case of a State that has elected to provide

12 medical assistance to a category of aliens under subpara13 graph (A), no debt shall accrue under an affidavit of sup14 port against any sponsor of such an alien on the basis

15 of provision of assistance to such category and the cost

16 of such assistance shall not be considered as an unreim17 bursed cost.’’.

18 (b) TITLE XXI.—Section 2107(e)(1) of the Social

19 Security Act (42 U.S.C. 1397gg(e)(1)) is amended by add20 ing at the end the following:

21 ‘‘(E) Section 1903(v)(4) (relating to op22 tional coverage of categories of lawful resident

23 alien children and parents), but only with re24 spect to an eligibility category under this title,
26

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1 if the same eligibility category has been elected

2 under such section for purposes of title XIX.’’.

3 (c) EFFECTIVE DATE.—The amendments made by

4 this section take effect on October 1, 2001, and apply to

5 medical assistance and child health assistance furnished

6 on or after such date, whether or not regulations imple7 menting such amendments have been issued.

8 SEC. 6. OPTIONAL COVERAGE OF CHILDREN THROUGH AGE

9 20 UNDER THE MEDICAID PROGRAM AND

10 TITLE XXI.

11 (a) MEDICAID.—

12 (1) IN GENERAL.—Section 1902(l)(1)(D) of the

13 Social Security Act (42 U.S.C. 1396a(l)(1)(D)) is

14 amended by inserting ‘‘(or, at the election of a

15 State, 20 or 21 years of age)’’ after ‘‘19 years of

16 age’’.

17 (2) CONFORMING AMENDMENTS.—

18 (A) Section 1902(e)(3)(A) of the Social Se19 curity Act (42 U.S.C. 1396a(e)(3)(A)) is

20 amended by inserting ‘‘(or 1 year less than the

21 age the State has elected under subsection

22 (l)(1)(D))’’ after ‘‘18 years of age’’.

23 (B) Section 1902(e)(12) of the Social Se24 curity Act (42 U.S.C. 1396a(e)(12)) is amend25 ed by inserting ‘‘or such higher age as the State
27

•S 1244 IS

1 has elected under subsection (l)(1)(D)’’ after

2 ‘‘19 years of age’’.

3 (C) Section 1920A(b)(1) of the Social Se4 curity Act (42 U.S.C. 1396r–1a(b)(1)) is

5 amended by inserting ‘‘or such higher age as

6 the State has elected under section

7 1902(l)(1)(D)’’ after ‘‘19 years of age’’.

8 (D) Section 1928(h)(1) of the Social Secu9 rity Act (42 U.S.C. 1396s(h)(1)) is amended by

10 inserting ‘‘or 1 year less than the age the State

11 has elected under section 1902(l)(1)(D)’’ before

12 the period at the end.

13 (E) Section 1932(a)(2)(A) of the Social

14 Security Act (42 U.S.C. 1396u–2(a)(2)(A)) is

15 amended by inserting ‘‘(or such higher age as

16 the State has elected under section

17 1902(l)(1)(D))’’ after ‘‘19 years of age’’.

18 (b) TITLE XXI.—Section 2110(c)(1) of the Social

19 Security Act (42 U.S.C. 1397jj(c)(1)) is amended by in20 serting ‘‘(or such higher age as the State has elected under

21 section 1902(l)(1)(D))’’.

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section take effect on October 1, 2001, and apply to

24 medical assistance and child health assistance provided on
28

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1 or after such date, whether or not regulations imple2 menting such amendments have been issued.

3 SEC. 7. APPLICATION OF SIMPLIFIED TITLE XXI PROCE4 DURES UNDER THE MEDICAID PROGRAM.

5 (a) APPLICATION UNDER MEDICAID.—

6 (1) IN GENERAL.—Section 1902(l) of the Social

7 Security Act (42 U.S.C. 1396a(l)) is amended—

8 (A) in paragraph (3), by inserting ‘‘subject

9 to paragraph (5)’’, after ‘‘Notwithstanding sub10 section (a)(17),’’; and

11 (B) by adding at the end the following:

12 ‘‘(5) With respect to determining the eligibility of in13 dividuals under 19 years of age (or such higher age as

14 the State has elected under paragraph (1)(D)) for medical

15 assistance under subsection (a)(10)(A) and, separately,

16 with respect to determining the eligibility of individuals

17 for medical assistance under subsection

18 (a)(10)(A)(i)(VIII) or (a)(10)(A)(ii)(XIX), notwith19 standing any other provision of this title, if the State has

20 established a State child health plan under title XXI—

21 ‘‘(A) the State may not apply a resource stand22 ard;

23 ‘‘(B) the State shall use the same simplified eli24 gibility form (including, if applicable, permitting ap25 plication other than in person) as the State uses
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1 under such State child health plan with respect to

2 such individuals;

3 ‘‘(C) the State shall provide for initial eligibility

4 determinations and redeterminations of eligibility

5 using verification policies, forms, and frequency that

6 are no less restrictive than the policies, forms, and

7 frequency the State uses for such purposes under

8 such State child health plan with respect to such in9 dividuals; and

10 ‘‘(D) the State shall not require a face-to-face

11 interview for purposes of initial eligibility determina12 tions and redeterminations unless the State requires

13 such an interview for such purposes under such child

14 health plan with respect to such individuals.’’.

15 (2) EFFECTIVE DATE.—The amendments made

16 by paragraph (1) apply to determinations of eligi17 bility made on or after the date that is 1 year after

18 the date of the enactment of this Act, whether or

19 not regulations implementing such amendments have

20 been issued.

21 (b) PRESUMPTIVE ELIGIBILITY.—

22 (1) IN GENERAL.—Section 1920A(b)(3)(A)(i) of

23 the Social Security Act (42 U.S.C. 1396r–

24 1a(b)(3)(A)(i)) is amended by inserting ‘‘a child care
30

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1 resource and referral agency,’’ after ‘‘a State or trib2 al child support enforcement agency,’’.

3 (2) APPLICATION TO PRESUMPTIVE ELIGIBILITY

4 FOR PREGNANT WOMEN UNDER MEDICAID.—Section

5 1920(b) of the Social Security Act (42 U.S.C.

6 1396r–1(b)) is amended by adding at the end after

7 and below paragraph (2) the following flush sen8 tence:

9 ‘‘The term ‘qualified provider’ includes a qualified entity

10 as defined in section 1920A(b)(3).’’.

11 (3) APPLICATION UNDER TITLE XXI.—

12 (A) IN GENERAL.—Section 2107(e)(1)(D)

13 of the Social Security Act (42 U.S.C.

14 1397gg(e)(1)) is amended to read as follows:

15 ‘‘(D) Sections 1920 and 1920A (relating to

16 presumptive eligibility).’’.

17 (B) CONFORMING ELIMINATION OF RE18 SOURCE TEST.—Section 2102(b)(1)(A) of such

19 Act (42 U.S.C. 1397bb(b)(1)(A)) is amended—

20 (i) by striking ‘‘ and resources (in21 cluding any standards relating to

22 spenddowns and disposition of resources)’’;

23 and

24 (ii) by adding at the end the fol25 lowing: ‘‘Effective 1 year after the date of
31

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1 the enactment of the FamilyCare Act of

2 2001, such standards may not include the

3 application of a resource standard or

4 test.’’.

5 (c) AUTOMATIC REASSESSMENT OF ELIGIBILITY FOR

6 TITLE XXI AND MEDICAID BENEFITS FOR CHILDREN

7 LOSING MEDICAID OR TITLE XXI ELIGIBILITY.—

8 (1) LOSS OF MEDICAID ELIGIBILITY.—Section

9 1902(a) of the Social Security Act (42 U.S.C.

10 1396a(a)) is amended—

11 (A) by striking the period at the end of

12 paragraph (65) and inserting ‘‘; and’’, and

13 (B) by inserting after paragraph (65) the

14 following:

15 ‘‘(66) provide, in the case of a State with a

16 State child health plan under title XXI, that before

17 medical assistance to a child (or a parent of a child)

18 is discontinued under this title, a determination of

19 whether the child (or parent) is eligible for benefits

20 under title XXI shall be made and, if determined to

21 be so eligible, the child (or parent) shall be auto22 matically enrolled in the program under such title

23 without the need for a new application.’’.
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1 (2) LOSS OF TITLE XXI ELIGIBILITY AND CO2 ORDINATION WITH MEDICAID.—Section 2102(b) (42

3 U.S.C. 1397bb(b)) is amended—

4 (A) in paragraph (3), by redesignating

5 subparagraphs (D) and (E) as subparagraphs

6 (E) and (F), respectively, and by inserting after

7 subparagraph (C) the following:

8 ‘‘(D) that before health assistance to a

9 child (or a parent of a child) is discontinued

10 under this title, a determination of whether the

11 child (or parent) is eligible for benefits under

12 title XIX is made and, if determined to be so

13 eligible, the child (or parent) is automatically

14 enrolled in the program under such title with15 out the need for a new application;’’;

16 (B) by redesignating paragraph (4) as

17 paragraph (5); and

18 (C) by inserting after paragraph (3) the

19 following new paragraph:

20 ‘‘(4) COORDINATION WITH MEDICAID.—The

21 State shall coordinate the screening and enrollment

22 of individuals under this title and under title XIX

23 consistent with the following:

24 ‘‘(A) Information that is collected under

25 this title or under title XIX which is needed to
33

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1 make an eligibility determination under the

2 other title shall be transmitted to the appro3 priate administering entity under such other

4 title in a timely manner so that coverage is not

5 delayed and families do not have to submit the

6 same information twice. Families shall be pro7 vided the information they need to complete the

8 application process for coverage under both ti9 tles and be given appropriate notice of any de10 terminations made on their applications for

11 such coverage.

12 ‘‘(B) If a State does not use a joint appli13 cation under this title and such title, the State

14 shall—

15 ‘‘(i) promptly inform a child’s parent

16 or caretaker in writing and, if appropriate,

17 orally, that a child has been found likely to

18 be eligible under title XIX;

19 ‘‘(ii) provide the family with an appli20 cation for medical assistance under such

21 title and offer information about what (if

22 any) further information, documentation,

23 or other steps are needed to complete such

24 application process;
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1 ‘‘(iii) offer assistance in completing

2 such application process; and

3 ‘‘(iv) promptly transmit the separate

4 application under this title or the informa5 tion obtained through such application,

6 and all other relevant information and doc7 umentation, including the results of the

8 screening process, to the State agency

9 under title XIX for a final determination

10 on eligibility under such title.

11 ‘‘(C) Applicants are notified in writing

12 of—

13 ‘‘(i) benefits (including restrictions on

14 cost-sharing) under title XIX; and

15 ‘‘(ii) eligibility rules that prohibit chil16 dren who have been screened eligible for

17 medical assistance under such title from

18 being enrolled under this title, other than

19 provisional temporary enrollment while a

20 final eligibility determination is being made

21 under such title.

22 ‘‘(D) If the agency administering this title

23 is different from the agency administering a

24 State plan under title XIX, such agencies shall
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1 coordinate the screening and enrollment of ap2 plicants for such coverage under both titles.

3 ‘‘(E) The coordination procedures estab4 lished between the program under this title and

5 under title XIX shall apply not only to the ini6 tial eligibility determination of a family but also

7 to any renewals or redeterminations of such eli8 gibility.’’.

9 (3) EFFECTIVE DATE.—The amendments made

10 by paragraphs (1) and (2) apply to individuals who

11 lose eligibility under the medicaid program under

12 title XIX, or under a State child health insurance

13 plan under title XXI, respectively, of the Social Se14 curity Act on or after October 1, 2001 (or, if later,

15 60 days after the date of the enactment of this Act),

16 whether or not regulations implementing such

17 amendments have been issued.

18 (d) PROVISION OF MEDICAID AND CHIP APPLICA19 TIONS AND INFORMATION UNDER THE SCHOOL LUNCH

20 PROGRAM.—Section 9(b)(2)(B) of the Richard B. Russell

21 National School Lunch Act (42 U.S.C. 1758(b)(2)(B)) is

22 amended—

23 (1) by striking ‘‘(B) Applications’’ and inserting

24 ‘‘(B)(i) Applications’’; and

25 (2) by adding at the end the following:
36

•S 1244 IS

1 ‘‘(ii)(I) Applications for free and reduced price

2 lunches that are distributed pursuant to clause (i) to par3 ents or guardians of children in attendance at schools par4 ticipating in the school lunch program under this Act shall

5 also contain information on the availability of medical as6 sistance under title XIX of the Social Security Act (42

7 U.S.C. 1396 et seq.) and of child health and FamilyCare

8 assistance under title XXI of such Act, including informa9 tion on how to obtain an application for assistance under

10 such programs.

11 ‘‘(II) Information on the programs referred to in sub12 clause (I) shall be provided on a form separate from the

13 application form for free and reduced price lunches under

14 clause (i).’’.

15 (e) 12-MONTHS CONTINUOUS ELIGIBILITY.—

16 (1) MEDICAID.—Section 1902(e)(12) of the So17 cial Security Act (42 U.S.C. 1396a(e)(12)) is

18 amended—

19 (A) by striking ‘‘At the option of the State,

20 the plan may’’ and inserting ‘‘The plan shall’’;

21 (B) by striking ‘‘an age specified by the

22 State (not to exceed 19 years of age)’’ and in23 serting ‘‘19 years of age (or such higher age as

24 the State has elected under subsection

25 (l)(1)(D)) or, at the option of the State, who is
37

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1 eligible for medical assistance as the parent of

2 such a child’’; and

3 (C) in subparagraph (A), by striking ‘‘a

4 period (not to exceed 12 months) ’’ and insert5 ing ‘‘the 12-month period beginning on the

6 date’’.

7 (2) TITLE XXI.—Section 2102(b)(2) of such

8 Act (42 U.S.C. 1397bb(b)(2)) is amended by adding

9 at the end the following: ‘‘Such methods shall pro10 vide 12-months continuous eligibility for children

11 under this title in the same manner that section

12 1902(e)(12) provides 12-months continuous eligi13 bility for children described in such section under

14 title XIX. If a State has elected to apply section

15 1902(e)(12) to parents, such methods may provide

16 12-months continuous eligibility for parents under

17 this title in the same manner that such section pro18 vides 12-months continuous eligibility for parents

19 described in such section under title XIX.’’.

20 (3) EFFECTIVE DATE.—

21 (A) IN GENERAL.—The amendments made

22 by this subsection shall take effect on October

23 1, 2001 (or, if later, 60 days after the date of

24 the enactment of this Act), whether or not reg-
38

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1 ulations implementing such amendments have

2 been issued.

3 SEC. 8. IMPROVING WELFARE-TO-WORK TRANSITION

4 UNDER THE MEDICAID PROGRAM.

5 (a) MAKING PROVISION PERMANENT.—

6 (1) IN GENERAL.—Subsection (f) of section

7 1925 of the Social Security Act (42 U.S.C. 1396r–

8 6) is repealed.

9 (2) CONFORMING AMENDMENT.—Section

10 1902(e)(1) of the Social Security Act (42 U.S.C.

11 1396a(e)(1)) is repealed.

12 (b) STATE OPTION OF INITIAL 12-MONTH ELIGI13 BILITY.—Section 1925 of the Social Security Act (42

14 U.S.C. 1396r–6) is amended—

15 (1) in subsection (a), by adding at the end the

16 following:

17 ‘‘(5) OPTION OF 12-MONTH INITIAL ELIGIBILITY

18 PERIOD.—A State may elect to treat any reference

19 in this subsection to a 6-month period (or 6 months)

20 as a reference to a 12-month period (or 12 months).

21 In the case of such an election, subsection (b) shall

22 not apply.’’; and

23 (2) in subsection (b)(1), by inserting ‘‘and sub24 section (a)(5)’’ after ‘‘paragraph (3)’’.

25 (c) SIMPLIFICATION.—
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1 (1) REMOVAL OF ADMINISTRATIVE REPORTING

2 REQUIREMENTS FOR ADDITIONAL 6-MONTH EXTEN3 SION.—Section 1925(b)(2) of the Social Security Act

4 (42 U.S.C. 1396r–6(b)(2)) is amended—

5 (A) by striking subparagraph (B);

6 (B) in subparagraph (A)(i)—

7 (i) in the heading, by striking ‘‘AND

8 REQUIREMENTS’’;

9 (ii) by striking ‘‘(I)’’ and all that fol10 lows through ‘‘(II)’’ and inserting ‘‘(i)’’;

11 (iii) by striking ‘‘, and (III)’’ and in12 serting ‘‘and (ii)’’;

13 (iv) by redesignating such subpara14 graph as subparagraph (A) (with appro15 priate indentation); and

16 (C) in subparagraph (A)(ii)—

17 (i) in the heading, by striking ‘‘RE18 PORTING REQUIREMENTS AND’’;

19 (ii) by striking ‘‘notify the family of

20 the reporting requirement under subpara21 graph (B)(ii) and’’ and inserting ‘‘provide

22 the family with notification of’’; and

23 (iii) by redesignating such subpara24 graph as subparagraph (B) (with appro25 priate indentation).
40

•S 1244 IS

1 (2) REMOVAL OF REQUIREMENT FOR PREVIOUS

2 RECEIPT OF MEDICAL ASSISTANCE.—Section

3 1925(a)(1) of the Social Security Act (42 U.S.C.

4 1396r–6(a)(1)) is amended—

5 (A) by inserting ‘‘but subject to subpara6 graph (B)’’ after ‘‘any other provision of this

7 title’’;

8 (B) by redesignating the matter after ‘‘RE9 QUIREMENT.—’’ as a subparagraph (A) with

10 the heading ‘‘IN GENERAL.—’’ and with the

11 same indentation as subparagraph (B) (as

12 added by subparagraph (C)); and

13 (C) by adding at the end the following:

14 ‘‘(B) STATE OPTION TO WAIVE REQUIRE15 MENT FOR 3 MONTHS PREVIOUS RECEIPT OF

16 MEDICAL ASSISTANCE.—A State may, at its op17 tion, elect also to apply subparagraph (A) in

18 the case of a family that had applied for and

19 was eligible for such aid for fewer than 3

20 months during the 6 immediately preceding

21 months described in such subparagraph.’’.

22 (3) PERMITTING INCREASE OR WAIVER OF 185

23 PERCENT OF POVERTY EARNING LIMIT.—Section

24 1925(b)(3)(A)(iii)(III) of the Social Security Act (42

25 U.S.C. 1396r–6(b)(3)(A)(iii)(III)) is amended—
41

•S 1244 IS

1 (A) by inserting ‘‘(at its option)’’ after

2 ‘‘the State’’; and

3 (B) by inserting ‘‘(or such higher percent

4 as the State may specify)’’ after ‘‘185 percent’’.

5 (4) EXEMPTION FOR STATES COVERING NEEDY

6 FAMILIES UP TO 185 PERCENT OF POVERTY.—Sec7 tion 1925 of the Social Security Act (42 U.S.C.

8 1396r–6), as amended by subsection (a), is

9 amended—

10 (A) in each of subsections (a)(1) and

11 (b)(1), by inserting ‘‘but subject to subsection

12 (f),’’ after ‘‘Notwithstanding any other provi13 sion of this title,’’; and

14 (B) by adding at the end the following:

15 ‘‘(f) EXEMPTION FOR STATE COVERING NEEDY

16 FAMILIES UP TO 185 PERCENT OF POVERTY.—

17 ‘‘(1) IN GENERAL.—At State option, the provi18 sions of this section shall not apply to a State that

19 uses the authority under section

20 1902(a)(10)(A)(ii)(XIX), section 1931(b)(2)(C), or

21 otherwise to make medical assistance available under

22 the State plan under this title to eligible individuals

23 described in section 1902(k)(1), or all individuals de24 scribed in section 1931(b)(1), and who are in fami25 lies with gross incomes (determined without regard
42

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1 to work-related child care expenses of such individ2 uals) at or below 185 percent of the income official

3 poverty line (as defined by the Office of Manage4 ment and Budget, and revised annually in accord5 ance with section 673(2) of the Omnibus Budget

6 Reconciliation Act of 1981) applicable to a family of

7 the size involved.

8 ‘‘(2) APPLICATION TO OTHER PROVISIONS OF

9 THIS TITLE.—The State plan of a State described in

10 paragraph (1) shall be deemed to meet the require11 ments of section 1902(a)(10)(A)(i)(I).’’.

12 (d) EFFECTIVE DATE.—The amendments made by

13 this section take effect on October 1, 2001, whether or

14 not regulations implementing such amendments have been

15 issued.

16 SEC. 9. ELIMINATION OF 100 HOUR RULE AND OTHER

17 AFDC-RELATED ELIGIBILITY RESTRICTIONS.

18 (a) IN GENERAL.—Section 1931(b)(1)(A)(ii) of the

19 Social Security Act (42 U.S.C. 1396u–1(b)(1)(A)(ii)) is

20 amended by inserting ‘‘other than the requirement that

21 the child be deprived of parental support or care by reason

22 of the death, continued absence from the home, incapacity,

23 or unemployment of a parent,’’ after ‘‘section 407(a),’’.

24 (b) CONFORMING AMENDMENT.—Section 1905(a) of

25 the Social Security Act (42 U.S.C. 1396d(a)) is amended,
43

•S 1244 IS

1 in the matter before paragraph (1), in clause (ii), by strik2 ing ‘‘if such child is (or would, if needy, be) a dependent

3 child under part A of title IV’’.

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section apply to eligibility determinations made on or

6 after October 1, 2001, whether or not regulations imple7 menting such amendments have been issued.

8 SEC. 10. STATE GRANT PROGRAM FOR MARKET INNOVA9 TION.

10 (a) IN GENERAL.—The Secretary of Health and

11 Human Services (in this section referred to as the ‘‘Sec12 retary’’) shall establish a program (in this section referred

13 to as the ‘‘program’’) to award demonstration grants

14 under this section to States to allow States to demonstrate

15 the effectiveness of innovative ways to increase access to

16 health insurance through market reforms and other inno17 vative means. Such innovative means may include any of

18 the following:

19 (1) Alternative group purchasing or pooling ar20 rangements, such as purchasing cooperatives for

21 small businesses, reinsurance pools, or high risk

22 pools.

23 (2) Individual or small group market reforms.

24 (3) Consumer education and outreach.
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1 (4) Subsidies to individuals, employers, or both,

2 in obtaining health insurance.

3 (b) SCOPE; DURATION.—The program shall be lim4 ited to not more than 10 States and to a total period of

5 5 years, beginning on the date the first demonstration

6 grant is made.

7 (c) CONDITIONS FOR DEMONSTRATION GRANTS.—

8 (1) IN GENERAL.—The Secretary may not pro9 vide for a demonstration grant to a State under the

10 program unless the Secretary finds that under the

11 proposed demonstration grant—

12 (A) the State will provide for demonstrated

13 increase of access for some portion of the exist14 ing uninsured population through a market in15 novation (other than merely through a financial

16 expansion of a program initiated before the

17 date of the enactment of this Act);

18 (B) the State will comply with applicable

19 Federal laws;

20 (C) the State will not discriminate among

21 participants on the basis of any health status22 related factor (as defined in section 2791(d)(9)

23 of the Public Health Service Act (42 U.S.C.

24 300gg–91(d)(9)), except to the extent a State

25 wishes to focus on populations that otherwise
45

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1 would not obtain health insurance because of

2 such factors; and

3 (D) the State will provide for such evalua4 tion, in coordination with the evaluation re5 quired under subsection (d), as the Secretary

6 may specify.

7 (2) APPLICATION.—The Secretary shall not

8 provide a demonstration grant under the program to

9 a State unless—

10 (A) the State submits to the Secretary

11 such an application, in such a form and man12 ner, as the Secretary specifies;

13 (B) the application includes information

14 regarding how the demonstration grant will ad15 dress issues such as governance, targeted popu16 lation, expected cost, and the continuation after

17 the completion of the demonstration grant pe18 riod; and

19 (C) the Secretary determines that the dem20 onstration grant will be used consistent with

21 this section.

22 (3) FOCUS.—A demonstration grant proposal

23 under this section need not cover all uninsured indi24 viduals in a State or all health care benefits with re25 spect to such individuals.
46

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1 (d) EVALUATION.—The Secretary shall enter into a

2 contract with an appropriate entity outside the Depart3 ment of Health and Human Services to conduct an overall

4 evaluation of the program at the end of the program pe5 riod. Such evaluation shall include an analysis of improve6 ments in access, costs, quality of care, or choice of cov7 erage, under different demonstration grants.

8 (e) OPTION TO PROVIDE FOR INITIAL PLANNING

9 GRANTS.—Notwithstanding the previous provisions of this

10 section, under the program the Secretary may provide for

11 a portion of the amounts appropriated under subsection

12 (f) (not to exceed $5,000,000) to be made available to any

13 State for initial planning grants to permit States to de14 velop demonstration grant proposals under the previous

15 provisions of this section.

16 (f) AUTHORIZATION OF APPROPRIATIONS.—There

17 are authorized to be appropriated $100,000,000 for each

18 fiscal year to carry out this section. Amounts appropriated

19 under this subsection shall remain available until ex20 pended.

21 (g) STATE DEFINED.—In this section, the term

22 ‘‘State’’ has the meaning given such term for purposes of

23 title XIX of the Social Security Act (42 U.S.C. 1396 et

24 seq.).
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1 SEC. 11. LIMITATIONS ON CONFLICTS OF INTEREST.

2 (a) LIMITATION ON CONFLICTS OF INTEREST IN

3 MARKETING ACTIVITIES.—

4 (1) TITLE XXI.—Section 2105(c) of the Social

5 Security Act (42 U.S.C. 300aa–5(c)) is amended by

6 adding at the end the following:

7 ‘‘(8) LIMITATION ON EXPENDITURES FOR MAR8 KETING ACTIVITIES.—Amounts expended by a State

9 for the use of an administrative vendor in marketing

10 health benefits coverage to low-income children

11 under this title shall not be considered, for purposes

12 of subsection (a)(2)(D), to be reasonable costs to ad13 minister the plan unless the following conditions are

14 met with respect to the vendor:

15 ‘‘(A) The vendor is independent of any en16 tity offering the coverage in the same area of

17 the State in which the vendor is conducting

18 marketing activities.

19 ‘‘(B) No person who is an owner, em20 ployee, consultant, or has a contract with the

21 vendor either has any direct or indirect finan22 cial interest with such an entity or has been ex23 cluded from participation in the program under

24 this title or title XVIII or XIX or debarred by

25 any Federal agency, or subject to a civil money

26 penalty under this Act.’’.
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1 (b) PROHIBITION OF AFFILIATION WITH DEBARRED

2 INDIVIDUALS.—

3 (1) MEDICAID.—Section 1903(i) of the Social

4 Security Act (42 U.S.C. 1396b(i))is amended—

5 (A) by striking the period at the end of

6 paragraph (20) and inserting ‘‘; or’’; and

7 (B) by inserting after paragraph (20) the

8 following:

9 ‘‘(21) with respect to any amounts expended for

10 an entity that receives payments under the plan

11 unless—

12 ‘‘(A) no person with an ownership or con13 trol interest (as defined in section 1124(a)(3))

14 in the entity is a person that is debarred, sus15 pended, or otherwise excluded from partici16 pating in procurement or non-procurement ac17 tivities under the Federal Acquisition Regula18 tion; and

19 ‘‘(B) such entity has not entered into an

20 employment, consulting, or other agreement for

21 the provision of items or services that are mate22 rial to such entity’s obligations under the plan

23 with a person described in subparagraph (A).’’.

24 (2) TITLE XXI.—Section 2107(e)(1) of the So25 cial Security Act (42 U.S.C. 1397gg(e)(1)), as
49

•S 1244 IS

1 amended by sections 5(b) and 7(b)(3), is further

2 amended—

3 (A) in subparagraph (B), by striking ‘‘and

4 (17)’’ and inserting ‘‘(17), and (21)’’; and

5 (B) by adding at the end the following:

6 ‘‘(F) Section 1902(a)(67) (relating to pro7 hibition of affiliation with debarred individ8 uals).’’.

9 (c) EFFECTIVE DATE.—The amendments made by

10 this section shall apply to expenditures made on or after

11 October 1, 2001, whether or not regulations implementing

12 such amendments have been issued.

13 SEC. 12. INCREASE IN CHIP ALLOTMENT FOR EACH OF FIS14 CAL YEARS 2002 THROUGH 2004.

15 Paragraphs (5), (6), and (7) of section 2104(a) of

16 the Social Security Act (42 U.S.C. 1397dd(a)) are amend17 ed by striking ‘‘$3,150,000,000’’ each place it appears and

18 inserting ‘‘$4,150,000,000’’.

19 SEC. 13. DEMONSTRATION PROGRAMS TO IMPROVE MED20 ICAID AND CHIP OUTREACH TO HOMELESS

21 INDIVIDUALS AND FAMILIES.

22 (a) AUTHORITY.—The Secretary of Health and

23 Human Services may award demonstration grants to not

24 more than 7 States (or other qualified entities) to conduct

25 innovative programs that are designed to improve out-
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1 reach to homeless individuals and families under the pro2 grams described in subsection (b) with respect to enroll3 ment of such individuals and families under such pro4 grams and the provision of services (and coordinating the

5 provision of such services) under such programs.

6 (b) PROGRAMS FOR HOMELESS DESCRIBED.—The

7 programs described in this subsection are as follows:

8 (1) MEDICAID.—The program under title XIX

9 of the Social Security Act (42 U.S.C. 1396 et seq.).

10 (2) CHIP.—The program under title XXI of

11 the Social Security Act (42 U.S.C. 1397aa et seq.).

12 (3) TANF.—The program under part of A of

13 title IV of the Social Security Act (42 U.S.C. 601

14 et seq.).

15 (4) SAMHSA BLOCK GRANTS.—The program

16 of grants under part B of title XIX of the Public

17 Health Service Act (42 U.S.C. 300x–1 et seq.).

18 (5) FOOD STAMP PROGRAM.—The program

19 under the Food Stamp Act of 1977 (7 U.S.C. 2011

20 et seq.).

21 (6) WORKFORCE INVESTMENT ACT.—The pro22 gram under the Workforce Investment Act of 1999

23 (29 U.S.C. 2801 et seq.).
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1 (7) WELFARE-TO-WORK.—The welfare-to-work

2 program under section 403(a)(5) of the Social Secu3 rity Act (42 U.S.C. 603(a)(5)).

4 (8) OTHER PROGRAMS.—Other public and pri5 vate benefit programs that serve low-income individ6 uals.

7 (c) APPROPRIATIONS.—For the purposes of carrying

8 out this section, there is appropriated for fiscal year 2002,

9 out of any funds in the Treasury not otherwise appro10 priated, $10,000,000, to remain available until expended.

11 SEC. 14. TECHNICAL AND CONFORMING AMENDMENTS TO

12 AUTHORITY TO PAY MEDICAID EXPANSION

13 COSTS FROM TITLE XXI APPROPRIATION.

14 (a) AUTHORITY TO PAY MEDICAID EXPANSION

15 COSTS FROM TITLE XXI APPROPRIATION.—Section

16 2105(a) of the Social Security Act (42 U.S.C. 1397ee(a))

17 is amended to read as follows:

18 ‘‘(a) ALLOWABLE EXPENDITURES.—

19 ‘‘(1) IN GENERAL.—Subject to the succeeding

20 provisions of this section, the Secretary shall pay to

21 each State with a plan approved under this title,

22 from its allotment under section 2104, an amount

23 for each quarter equal to the enhanced FMAP of the

24 following expenditures in the quarter:
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•S 1244 IS

1 ‘‘(A) CHILD HEALTH ASSISTANCE UNDER

2 MEDICAID.—Expenditures for child health as3 sistance under the plan for targeted low-income

4 children in the form of providing medical assist5 ance for expenditures described in the fourth

6 sentence of section 1905(b).

7 ‘‘(B) RESERVED.—[reserved].

8 ‘‘(C) CHILD HEALTH ASSISTANCE UNDER

9 THIS TITLE.—Expenditures for child health as10 sistance under the plan for targeted low-income

11 children in the form of providing health benefits

12 coverage that meets the requirements of section

13 2103.

14 ‘‘(D) ASSISTANCE AND ADMINISTRATIVE

15 EXPENDITURES SUBJECT TO LIMIT.—Expendi16 tures only to the extent permitted consistent

17 with subsection (c)—

18 ‘‘(i) for other child health assistance

19 for targeted low-income children;

20 ‘‘(ii) for expenditures for health serv21 ices initiatives under the plan for improv22 ing the health of children (including tar23 geted low-income children and other low24 income children);
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1 ‘‘(iii) for expenditures for outreach ac2 tivities as provided in section 2102(c)(1)

3 under the plan; and

4 ‘‘(iv) for other reasonable costs in5 curred by the State to administer the plan.

6 ‘‘(2) ORDER OF PAYMENTS.—Payments under a

7 subparagraph of paragraph (1) from a State’s allot8 ment for expenditures described in each such sub9 paragraph shall be made on a quarterly basis in the

10 order of such subparagraph in such paragraph.

11 ‘‘(3) NO DUPLICATIVE PAYMENT.—In the case

12 of expenditures for which payment is made under

13 paragraph (1), no payment shall be made under title

14 XIX.’’.

15 (b) CONFORMING AMENDMENTS.—

16 (1) SECTION 1905(u).—Section 1905(u)(1)(B)

17 of the Social Security Act (42 U.S.C.

18 1396d(u)(1)(B)) is amended by inserting ‘‘and sec19 tion 2105(a)(1)’’ after ‘‘subsection (b)’’.

20 (2) SECTION 2105(c).—Section 2105(c)(2)(A) of

21 the Social Security Act (42 U.S.C. 1397ee(c)(2)(A))

22 is amended by striking ‘‘subparagraphs (A), (C),

23 and (D) of’’.

24 (c) EFFECTIVE DATE.—The amendments made by

25 this section shall be effective as if included in the enact-
54

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1 ment of the Balanced Budget Act of 1997 (Public Law

2 105–33; 111 Stat. 251), whether or not regulations imple3 menting such amendments have been issued.

4 SEC. 15. ADDITIONAL CHIP REVISIONS.

5 (a) LIMITING COST-SHARING TO 2.5 PERCENT FOR

6 FAMILIES WITH INCOME BELOW 150 PERCENT OF POV7 ERTY.—Section 2103(e)(3)(A) of the Social Security Act

8 (42 U.S.C. 1397cc(e)(3)(A)) is amended—

9 (1) by striking ‘‘and’’ at the end of clause (i);

10 (2) by striking the period at the end of clause

11 (ii) and inserting ‘‘; and’’; and

12 (3) by adding at the end the following new

13 clause:

14 ‘‘(iii) total annual aggregate cost15 sharing described in clauses (i) and (ii)

16 with respect to all such targeted low-in17 come children in a family under this title

18 that exceeds 2.5 percent of such family’s

19 income for the year involved.’’.

20 (b) REPORTING OF ENROLLMENT DATA.—

21 (1) QUARTERLY REPORTS.—Section 2107(b)(1)

22 of such Act (42 U.S.C. 1397gg(b)(1)) is amended by

23 adding at the end the following: ‘‘In quarterly re24 ports on enrollment required under this paragraph,

25 a State shall include information on the age, gender,
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1 race, ethnicity, service delivery system, and family

2 income of individuals enrolled.’’.

3 (2) ANNUAL REPORTS.—Section

4 2108(b)(1)(B)(i) of such Act (42 U.S.C.

5 1397hh(b)(1)(B)(i)) is amended by inserting ‘‘pri6 mary language of enrollees,’’ after ‘‘family income,’’.

7 (c) EMPLOYER COVERAGE WAIVER CHANGES.—Sec8 tion 2105(c)(3) of such Act (42 U.S.C. 1397ee(c)(3)) is

9 amended—

10 (1) by redesignating subparagraphs (A) and

11 (B) as clauses (i) and (ii) and indenting appro12 priately;

13 (2) by designating the matter beginning with

14 ‘‘Payment may be made’’ as a subparagraph (A)

15 with the heading ‘‘IN GENERAL’’ and indenting ap16 propriately; and

17 (3) by adding at the end the following new sub18 paragraphs:

19 ‘‘(B) APPLICATION OF REQUIREMENTS.—

20 In carrying out subparagraph (A)—

21 ‘‘(i) the Secretary shall not require a

22 minimum employer contribution level that

23 is separate from the requirement of cost24 effectiveness under subparagraph (A)(i),

25 but a State shall identify a reasonable min-
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1 imum employer contribution level that is

2 based on data demonstrating that such a

3 level is representative to the employer4 sponsored insurance market in the State

5 and shall monitor employer contribution

6 levels over time to determine whether sub7 stitution is occurring and report the find8 ings in annual reports under section

9 2108(a);

10 ‘‘(ii) the State shall establish a wait11 ing period of at least 6 months without

12 group health coverage, but may establish

13 reasonable exceptions to such period and

14 shall not apply such a waiting period to a

15 child who is provided coverage under a

16 group health plan under section 1906;

17 ‘‘(iii) subject to clause (iv), the State

18 shall provide satisfactory assurances that

19 the minimum benefits and cost-sharing

20 protections established under this title are

21 provided, either through the coverage

22 under subparagraph (A) or as a supple23 ment to such coverage; and

24 ‘‘(iv) coverage under such subpara25 graph shall not be considered to violate
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1 clause (iii) because it does not comply with

2 requirements relating to reviews of health

3 service decisions if the enrollee involved is

4 provided the option of being provided bene5 fits directly under this title.

6 ‘‘(C) ACCESS TO EXTERNAL REVIEW PROC7 ESS.—In carrying out subparagraph (A), if a

8 State provides coverage under a group health

9 plan that does not meet the following external

10 review requirements, the State must give appli11 cants and enrollees (at initial enrollment and at

12 each redetermination of eligibility) the option to

13 obtain health benefits coverage other than

14 through that group health plan:

15 ‘‘(i) The enrollee has an opportunity

16 for external review of a—

17 ‘‘(I) delay, denial, reduction, sus18 pension, or termination of health serv19 ices, in whole or in part, including a

20 determination about the type or level

21 of services; and

22 ‘‘(II) failure to approve, furnish,

23 or provide payment for health services

24 in a timely manner.
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1 ‘‘(ii) The external review is conducted

2 by the State or a impartial contractor

3 other than the contractor responsible for

4 the matter subject to external review.

5 ‘‘(iii) The external review decision is

6 made on a timely basis in accordance with

7 the medical needs of the patient. If the

8 medical needs of the patient do not dictate

9 a shorter time frame, the review must be

10 completed—

11 ‘‘(I) within 90 calendar days of

12 the date of the request for internal or

13 external review; or

14 ‘‘(II) within 72 hours if the en15 rollee’s physician or plan determines

16 that the deadline under subclause (I)

17 could seriously jeopardize the enroll18 ee’s life or health or ability to attain,

19 maintain, or regain maximum func20 tion (except that a State may extend

21 the 72-hour deadline by up to 14 days

22 if the enrollee requests an extension).

23 ‘‘(iv) The external review decision

24 shall be in writing.
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1 ‘‘(v) Applicants and enrollees have an

2 opportunity—

3 ‘‘(I) to represent themselves or

4 have representatives of their choosing

5 in the review process;

6 ‘‘(II) timely review their files and

7 other applicable information relevant

8 to the review of the decision; and

9 ‘‘(III) fully participate in the re10 view process, whether the review is

11 conducted in person or in writing, in12 cluding by presenting supplemental

13 information during the review proc14 ess.’’.

15 (d) EFFECTIVE DATE.—The amendments made by

16 this section apply as of October 1, 2001, whether or not

17 regulations implementing such amendments have been

18 issued.

Æ