II 

109TH CONGRESS 

1ST SESSION S. 183 

To amend title XIX of the Social Security Act to provide families of disabled 

children with the opportunity to purchase coverage under the medicaid 

program for such children, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 26, 2005 

Mr. GRASSLEY (for himself and Mr. KENNEDY) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend title XIX of the Social Security Act to provide 

families of disabled children with the opportunity to purchase coverage under the medicaid program for such 

children, and for other purposes. 

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. 

4 This Act may be cited as the ‘‘Family Opportunity 

5 Act of 2005’’or the ‘‘Dylan Lee James Act’’. 

6 SEC. 2. REFERENCES; TABLE OF CONTENTS. 

7 (a) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex8 cept as otherwise specifically provided, whenever in this 
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1 title an amendment is expressed in terms of an amend2 ment to or repeal of a section or other provision, the ref3 erence shall be considered to be made to that section or 

4 other provision of the Social Security Act. 

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

6 this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. References; table of contents. 

Sec. 3. Opportunity for families of disabled children to purchase medicaid coverage for such children. 

Sec. 4. Demonstration projects regarding home and community-based alternative 

to psychiatric residential treatment facilities for children. 

Sec. 5. Development and support of family-to-family health information centers. 

Sec. 6. Restoration of medicaid eligibility for certain SSI beneficiaries. 

7 SEC. 3. OPPORTUNITY FOR FAMILIES OF DISABLED CHIL8 DREN TO PURCHASE MEDICAID COVERAGE 

9 FOR SUCH CHILDREN. 

10 (a) STATE OPTION TO ALLOW FAMILIES OF DIS11 ABLED CHILDREN TO PURCHASE MEDICAID COVERAGE

12 FOR SUCH CHILDREN.— 

13 (1) IN GENERAL.—Section 1902 (42 U.S.C. 

14 1396a) is amended— 

15 (A) in subsection (a)(10)(A)(ii)— 

16 (i) by striking ‘‘or’’ at the end of sub17 clause (XVII); 

18 (ii) by adding ‘‘or’’ at the end of sub19 clause (XVIII); and 

20 (iii) by adding at the end the fol21 lowing new subclause: 
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1 ‘‘(XIX) who are disabled children 

2 described in subsection (cc)(1);’’; and 

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

4 subsection: 

5 ‘‘(cc)(1) Individuals described in this paragraph are 

6 individuals— 

7 ‘‘(A) who are children who have not attained 19 

8 years of age and are born— 

9 ‘‘(i) on or after October 1, 1999 (or, at the 

10 option of a State, on or after an earlier date), 

11 in the case of fiscal year 2006; 

12 ‘‘(ii) on or after October 1, 1994 (or, at 

13 the option of a State, on or after an earlier 

14 date), in the case of fiscal year 2007; and 

15 ‘‘(iii) after October 1, 1988, in the case of 

16 fiscal year 2008 and any fiscal year thereafter; 

17 ‘‘(B) who would be considered disabled under 

18 section 1614(a)(3)(C) but for having earnings or 

19 deemed income or resources (as determined under 

20 title XVI for children) that exceed the requirements 

21 for receipt of supplemental security income benefits; 

22 and 

23 ‘‘(C) whose family income does not exceed such 

24 income level as the State establishes and does not 

25 exceed— 
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1 ‘‘(i) 300 percent of the poverty line (as de2 fined in section 2110(c)(5)) applicable to a fam3 ily of the size involved; or 

4 ‘‘(ii) such higher percent of such poverty 

5 line as a State may establish, except that— 

6 ‘‘(I) any medical assistance provided 

7 to an individual whose family income ex8 ceeds 300 percent of such poverty line may 

9 only be provided with State funds; and 

10 ‘‘(II) no Federal financial participa11 tion shall be provided under section 

12 1903(a) for any medical assistance pro13 vided to such an individual.’’. 

14 (2) INTERACTION WITH EMPLOYER-SPONSORED

15 FAMILY COVERAGE.—Section 1902(cc) (42 U.S.C. 

16 1396a(cc)), as added by paragraph (1)(B), is 

17 amended by adding at the end the following new 

18 paragraph: 

19 ‘‘(2)(A) If an employer of a parent of an individual 

20 described in paragraph (1) offers family coverage under 

21 a group health plan (as defined in section 2791(a) of the 

22 Public Health Service Act), the State shall— 

23 ‘‘(i) require such parent to apply for, enroll in, 

24 and pay premiums for such coverage as a condition 

25 of such parent’s child being or remaining eligible for 
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1 medical assistance under subsection 

2 (a)(10)(A)(ii)(XIX) if the parent is determined eligi3 ble for such coverage and the employer contributes 

4 at least 50 percent of the total cost of annual pre5 miums for such coverage; and 

6 ‘‘(ii) if such coverage is obtained— 

7 ‘‘(I) subject to paragraph (2) of section 

8 1916(h), reduce the premium imposed by the 

9 State under that section in an amount that rea10 sonably reflects the premium contribution made 

11 by the parent for private coverage on behalf of 

12 a child with a disability; and 

13 ‘‘(II) treat such coverage as a third party 

14 liability under subsection (a)(25). 

15 ‘‘(B) In the case of a parent to which subparagraph 

16 (A) applies, a State, subject to paragraph (1)(A)(iii)(II), 

17 may provide for payment of any portion of the annual pre18 mium for such family coverage that the parent is required 

19 to pay. Any payments made by the State under this sub20 paragraph shall be considered, for purposes of section 

21 1903(a), to be payments for medical assistance.’’. 

22 (b) STATE OPTION TO IMPOSE INCOME-RELATED

23 PREMIUMS.—Section 1916 (42 U.S.C. 1396o) is amend24 ed— 
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1 (1) in subsection (a), by striking ‘‘subsection 

2 (g)’’ and inserting ‘‘subsections (g) and (h)’’; and 

3 (2) by adding at the end the following new sub4 section: 

5 ‘‘(h)(1) With respect to disabled children provided 

6 medical assistance under section 1902(a)(10)(A)(ii)(XIX), 

7 subject to paragraph (2), a State may (in a uniform man8 ner for such children) require the families of such children 

9 to pay monthly premiums set on a sliding scale based on 

10 family income. 

11 ‘‘(2) A premium requirement imposed under para12 graph (1) may only apply to the extent that— 

13 ‘‘(A) in the case of a disabled child described in 

14 that paragraph whose family income— 

15 ‘‘(i) does not exceed 200 percent of the 

16 poverty line, the aggregate amount of such pre17 mium and any premium that the parent is re18 quired to pay for family coverage under section 

19 1902(cc)(2)(A)(i) and other cost sharing 

20 charges do not exceed 5 percent of the family’s 

21 income; and 

22 ‘‘(ii) exceeds 200, but does not exceed 300, 

23 percent of the poverty line, the aggregate 

24 amount of such premium and any premium that 

25 the parent is required to pay for family cov-
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1 erage under section 1902(cc)(2)(A)(i) and other 

2 cost sharing charges do not exceed 7.5 percent 

3 of the family’s income; and 

4 ‘‘(B) the requirement is imposed consistent with 

5 section 1902(cc)(2)(A)(ii)(I). 

6 ‘‘(3) A State shall not require prepayment of a pre7 mium imposed pursuant to paragraph (1) and shall not 

8 terminate eligibility of a child under section 

9 1902(a)(10)(A)(ii)(XIX) for medical assistance under this 

10 title on the basis of failure to pay any such premium until 

11 such failure continues for a period of at least 60 days from 

12 the date on which the premium became past due. The 

13 State may waive payment of any such premium in any 

14 case where the State determines that requiring such pay15 ment would create an undue hardship.’’. 

16 (c) CONFORMING AMENDMENTS.—(1) Section 

17 1903(f)(4) (42 U.S.C. 1396b(f)(4)) is amended in the 

18 matter preceding subparagraph (A), by inserting 

19 ‘‘1902(a)(10)(A)(ii)(XIX),’’ after 

20 ‘‘1902(a)(10)(A)(ii)(XVIII),’’. 

21 (2) Section 1905(u)(2)(B) (42 U.S.C. 

22 1396d(u)(2)(B)) is amended by adding at the end the fol23 lowing sentence: ‘‘Such term excludes any child eligible for 

24 medical assistance only by reason of section 

25 1902(a)(10)(A)(ii)(XIX).’’. 
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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to medical assistance for items and 

3 services furnished on or after October 1, 2005. 

4 SEC. 4. DEMONSTRATION PROJECTS REGARDING HOME 

5 AND COMMUNITY-BASED ALTERNATIVE TO 

6 PSYCHIATRIC RESIDENTIAL TREATMENT FA7 CILITIES FOR CHILDREN. 

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

9 Human Services (in this section referred to as the ‘‘Sec10 retary’’) is authorized to conduct, during each of fiscal 

11 years 2006 through 2010, demonstration projects (each 

12 in the section referred to as a ‘‘demonstration project’’) 

13 in accordance with this section under which up to 10 

14 States (as defined for purposes of title XIX of the Social 

15 Security Act) are awarded grants, on a competitive basis, 

16 to test the effectiveness in improving or maintaining a 

17 child’s functional level and cost-effectiveness of providing 

18 coverage of home and community-based alternatives to 

19 psychiatric residential treatment for children enrolled in 

20 the medicaid program under title XIX of such Act. 

21 (b) APPLICATION OF TERMS AND CONDITIONS.— 

22 (1) IN GENERAL.—Subject to the provisions of 

23 this section, for the purposes of the demonstration 

24 projects, and only with respect to children enrolled 

25 under such demonstration projects, a psychiatric res-
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1 idential treatment facility (as defined in section 

2 483.352 of title 42 of the Code of Federal Regula3 tions) shall be deemed to be a facility specified in 

4 section 1915(c) of the Social Security Act (42 

5 U.S.C. 1396n(c)), and to be included in each ref6 erence in such section 1915(c) to hospitals, nursing 

7 facilities, and intermediate care facilities for the 

8 mentally retarded. 

9 (2) STATE OPTION TO ASSURE CONTINUITY OF

10 MEDICAID COVERAGE.—Upon the termination of a 

11 demonstration project under this section, the State 

12 that conducted the project may elect, only with re13 spect to a child who is enrolled in such project on 

14 the termination date, to continue to provide medical 

15 assistance for coverage of home and community16 based alternatives to psychiatric residential treat17 ment for the child in accordance with section 

18 1915(c) of the Social Security Act (42 U.S.C. 

19 1396n(c)), as modified through the application of 

20 paragraph (1). Expenditures incurred for providing 

21 such medical assistance shall be treated as a home 

22 and community-based waiver program under section 

23 1915(c) of the Social Security Act (42 U.S.C. 

24 1396n(c)) for purposes of payment under section 

25 1903 of such Act (42 U.S.C. 1396b). 
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1 (c) TERMS OF DEMONSTRATION PROJECTS.— 

2 (1) IN GENERAL.—Except as otherwise pro3 vided in this section, a demonstration project shall 

4 be subject to the same terms and conditions as apply 

5 to a waiver under section 1915(c) of the Social Se6 curity Act (42 U.S.C. 1396n(c)), including the waiv7 er of certain requirements under the first sentence 

8 of paragraph (3) of such section but not applying 

9 the second sentence of such paragraph. 

10 (2) BUDGET NEUTRALITY.—In conducting the 

11 demonstration projects under this section, the Sec12 retary shall ensure that the aggregate payments 

13 made by the Secretary under title XIX of the Social 

14 Security Act (42 U.S.C. 1396 et seq.) do not exceed 

15 the amount by which the Secretary estimates would 

16 have been paid under that title if the demonstration 

17 projects under this section had not been imple18 mented. 

19 (3) EVALUATION.—The application for a dem20 onstration project shall include an undertaking to 

21 provide for such interim and final evaluations of the 

22 demonstration project by independent third parties, 

23 and for such interim and final reports to the Sec24 retary, as the Secretary may require. 
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1 (d) PAYMENTS TO STATES; LIMITATIONS TO SCOPE

2 AND FUNDING.— 

3 (1) IN GENERAL.—Subject to paragraph (2), a 

4 demonstration project approved by the Secretary 

5 under this section shall be treated as a home and 

6 community-based waiver program under section 

7 1915(c) of the Social Security Act (42 U.S.C. 

8 1396n(c)) for purposes of payment under section 

9 1903 of such Act (42 U.S.C. 1396b). 

10 (2) LIMITATION.—In no case may the amount 

11 of payments made by the Secretary under this sec12 tion for State demonstration projects for a fiscal 

13 year exceed the amount available under subsection 

14 (f)(2)(A) for such fiscal year. 

15 (e) SECRETARY’S EVALUATION AND REPORT.—The 

16 Secretary shall conduct an interim and final evaluation of 

17 State demonstration projects under this section and shall 

18 report to the President and Congress the conclusions of 

19 such evaluations within 12 months of completing such 

20 evaluations. 

21 (f) FUNDING.— 

22 (1) IN GENERAL.—For the purpose of carrying 

23 out this section, there are appropriated, from 

24 amounts in the Treasury not otherwise appropriated, 
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1 for fiscal years 2006 through 2010 a total of 

2 $218,000,000, of which— 

3 (A) the amount specified in paragraph (2) 

4 shall be available for each of fiscal years 2006 

5 through 2010; and 

6 (B) a total of $1,000,000 shall be available 

7 to the Secretary for the evaluations and report 

8 under subsection (f). 

9 (2) FISCAL YEAR LIMIT.— 

10 (A) IN GENERAL.—For purposes of para11 graph (1), the amount specified in this para12 graph for a fiscal year is the amount specified 

13 in subparagraph (B) for the fiscal year plus the 

14 difference, if any, between the total amount 

15 available under this paragraph for prior fiscal 

16 years and the total amount previously expended 

17 under paragraph (1)(A) for such prior fiscal 

18 years. 

19 (B) FISCAL YEAR AMOUNTS.—The amount 

20 specified in this subparagraph for— 

21 (i) fiscal year 2006 is $21,000,000; 

22 (ii) fiscal year 2007 is $37,000,000; 

23 (iii) fiscal year 2008 is $49,000,000; 

24 (iv) fiscal year 2009 is $53,000,000; 

25 and 
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1 (v) fiscal year 2010 is $57,000,000. 

2 SEC. 5. DEVELOPMENT AND SUPPORT OF FAMILY-TO-FAM3 ILY HEALTH INFORMATION CENTERS. 

4 Section 501 (42 U.S.C. 701) is amended by adding 

5 at the end the following new subsection: 

6 ‘‘(c)(1)(A) For the purpose of enabling the Secretary 

7 (through grants, contracts, or otherwise) to provide for 

8 special projects of regional and national significance for 

9 the development and support of family-to-family health in10 formation centers described in paragraph (2)— 

11 ‘‘(i) there is appropriated to the Secretary, out 

12 of any money in the Treasury not otherwise appro13 priated— 

14 ‘‘(I) $3,000,000 for fiscal year 2006; 

15 ‘‘(II) $4,000,000 for fiscal year 2007; and 

16 ‘‘(III) $5,000,000 for fiscal year 2008; and 

17 ‘‘(ii) there is authorized to be appropriated to 

18 the Secretary, $5,000,000 for each of fiscal years 

19 2009 and 2010. 

20 ‘‘(B) Funds appropriated or authorized to be appro21 priated under subparagraph (A) shall— 

22 ‘‘(i) be in addition to amounts appropriated 

23 under subsection (a) and retained under section 

24 502(a)(1) for the purpose of carrying out activities 

25 described in subsection (a)(2); and 
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1 ‘‘(ii) remain available until expended. 

2 ‘‘(2) The family-to-family health information centers 

3 described in this paragraph are centers that— 

4 ‘‘(A) assist families of children with disabilities 

5 or special health care needs to make informed 

6 choices about health care in order to promote good 

7 treatment decisions, cost-effectiveness, and improved 

8 health outcomes for such children; 

9 ‘‘(B) provide information regarding the health 

10 care needs of, and resources available for, such chil11 dren; 

12 ‘‘(C) identify successful health delivery models 

13 for such children; 

14 ‘‘(D) develop with representatives of health care 

15 providers, managed care organizations, health care 

16 purchasers, and appropriate State agencies a model 

17 for collaboration between families of such children 

18 and health professionals; 

19 ‘‘(E) provide training and guidance regarding 

20 caring for such children; 

21 ‘‘(F) conduct outreach activities to the families 

22 of such children, health professionals, schools, and 

23 other appropriate entities and individuals; and 

24 ‘‘(G) are staffed— 
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1 ‘‘(i) by such families who have expertise in 

2 Federal and State public and private health 

3 care systems; and 

4 ‘‘(ii) by health professionals. 

5 ‘‘(3) The Secretary shall develop family-to-family 

6 health information centers described in paragraph (2) in 

7 accordance with the following: 

8 ‘‘(A) With respect to fiscal year 2006, such cen9 ters shall be developed in not less than 25 States. 

10 ‘‘(B) With respect to fiscal year 2007, such 

11 centers shall be developed in not less than 40 States. 

12 ‘‘(C) With respect to fiscal year 2008, such cen13 ters shall be developed in all States. 

14 ‘‘(4) The provisions of this title that are applicable 

15 to the funds made available to the Secretary under section 

16 502(a)(1) apply in the same manner to funds made avail17 able to the Secretary under paragraph (1)(A). 

18 ‘‘(5) For purposes of this subsection, the term ‘State’ 

19 means each of the 50 States and the District of Colum20 bia.’’. 

21 SEC. 6. RESTORATION OF MEDICAID ELIGIBILITY FOR CER22 TAIN SSI BENEFICIARIES. 

23 (a) IN GENERAL.—Section 1902(a)(10)(A)(i)(II) (42 

24 U.S.C. 1396a(a)(10)(A)(i)(II)) is amended— 

25 (1) by inserting ‘‘(aa)’’ after ‘‘(II)’’; 
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1 (2) by striking ‘‘) and’’ and inserting ‘‘and’’; 

2 (3) by striking ‘‘section or who are’’ and insert3 ing ‘‘section), (bb) who are’’; and 

4 (4) by inserting before the comma at the end 

5 the following: ‘‘, or (cc) who are under 21 years of 

6 age and with respect to whom supplemental security 

7 income benefits would be paid under title XVI if 

8 subparagraphs (A) and (B) of section 1611(c)(7) 

9 were applied without regard to the phrase ‘the first 

10 day of the month following’ ’’. 

11 (b) EFFECTIVE DATE.—The amendments made by 

12 subsection (a) shall apply to medical assistance for items 

13 and services furnished on or after January 1, 2006. 

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