I 

111TH CONGRESS 

1ST SESSION H. R. 3823 

To amend titles XIX and XXI of the Social Security Act to make certain 

changes to the State Children’s Health Insurance Program and the 

Medicaid Program. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 15, 2009 

Mr. DEAL of Georgia (for himself, Mr. PITTS, Mr. BLUNT, Mr. BARTON of 

Texas, and Mr. BUYER) introduced the following bill; which was referred 

to the Committee on Energy and Commerce 

A BILL 

To amend titles XIX and XXI of the Social Security Act 

to make certain changes to the State Children’s Health 

Insurance Program and the Medicaid Program. 

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 ‘‘Medicaid and SCHIP 

5 Beneficiary Choice Improvement Act of 2009’’. 


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1 SEC. 2. EASING ADMINISTRATIVE BARRIERS TO STATE CO2 OPERATION WITH EMPLOYER-SPONSORED 

3 INSURANCE COVERAGE. 

4 (a) REQUIRING SOME COVERAGE FOR EMPLOYER5 SPONSORED INSURANCE.— 

6 (1) IN GENERAL.—Section 2102(a) of the So7 cial Security Act (42 U.S.C. 1397b(a)) is amend8 ed— 

9 (A) in paragraph (6), by striking ‘‘and’’ at 

10 the end; 

11 (B) in paragraph (7), by striking the pe12 riod at the end and inserting ‘‘; and’’; and 

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

14 paragraph: 

15 ‘‘(8) effective for plan years beginning on or 

16 after October 1, 2010, how the plan will provide for 

17 child health assistance with respect to targeted low18 income children who have access to coverage under 

19 a group health plan.’’. 

20 (2) EFFECTIVE DATE.—The amendments made 

21 by paragraph (1) shall apply beginning on October 

22 1, 2010. 

23 (b) FEDERAL FINANCIAL PARTICIPATION FOR EM24 PLOYER-SPONSORED INSURANCE.—Section 2105 of such 

25 Act (42 U.S.C. 1397d) is amended— 


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1 (1) in subsection (a)(1)(C), by inserting before 

2 the semicolon at the end the following: ‘‘and, subject 

3 to paragraph (3)(C) of subsection (c), in the form of 

4 payment of the premiums for coverage under a 

5 group health plan that includes coverage of targeted 

6 low-income children and benefits supplemental to 

7 such coverage’’; and 

8 (2) by amending paragraph (3) of subsection 

9 (c) to read as follows: 

10 ‘‘(3) PURCHASE OF EMPLOYER-SPONSORED IN11 SURANCE.— 

12 ‘‘(A) IN GENERAL.—Payment may be 

13 made to a State under subsection (a)(1)(C), 

14 subject to the provisions of this paragraph, for 

15 the purchase of family coverage under a group 

16 health plan that includes coverage of targeted 

17 low-income children unless such coverage would 

18 otherwise substitute for coverage that would be 

19 provided to such children but for the purchase 

20 of family coverage. 

21 ‘‘(B) WAIVER OF CERTAIN PROVISIONS.— 

22 With respect to coverage described in subpara23 graph (A)— 

24 ‘‘(i) notwithstanding section 2102, no 

25 minimum benefits requirement (other than 


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1 those otherwise applicable with respect to 

2 services within the categories of basic serv3 ices described in section 2103(c)(1) and 

4 emergency services) under this title shall 

5 apply; and 

6 ‘‘(ii) no limitation on beneficiary cost7 sharing otherwise applicable under this 

8 title or title XIX shall apply. 

9 ‘‘(C) REQUIRED PROVISION OF SUPPLE10 MENTAL BENEFITS.—If the coverage described 

11 in subparagraph (A) does not provide coverage 

12 for the services in each of the categories of 

13 basic services described in section 2103(c)(1) 

14 and for emergency services, the State child 

15 health plan shall provide coverage of such serv16 ices as supplemental benefits. 

17 ‘‘(D) LIMITATION ON FFP.—The amount 

18 of the payment under subsection (a)(1)(C) for 

19 coverage described in subparagraph (A) (and 

20 supplemental benefits under subparagraph (C) 

21 for individuals so covered) during a fiscal year 

22 may not exceed the product of— 

23 ‘‘(i) the national per capita expendi24 ture under this title (taking into account 

25 both Federal and State expenditures) for 


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1 the previous fiscal year (as determined by 

2 the Secretary using the best available 

3 data); 

4 ‘‘(ii) the enhanced FMAP for the 

5 State and fiscal year involved; and 

6 ‘‘(iii) the number of targeted low-in7 come children for whom such coverage is 

8 provided. 

9 ‘‘(E) VOLUNTARY ENROLLMENT.—A State 

10 child health plan— 

11 ‘‘(i) may not require a targeted low12 income child to enroll in family coverage 

13 described in subparagraph (A) in order to 

14 obtain child health assistance under this 

15 title; 

16 ‘‘(ii) before providing such child 

17 health assistance for such coverage of a 

18 child, shall make available (which may be 

19 through an Internet website or other 

20 means) to the parent or guardian of the 

21 child information on the coverage available 

22 under this title, including benefits and 

23 cost-sharing; and 

24 ‘‘(iii) shall provide at least one oppor25 tunity per fiscal year for beneficiaries to 


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1 switch coverage under this title from cov2 erage described in subparagraph (A) to the 

3 coverage that is otherwise made available 

4 under this title. 

5 ‘‘(F) INFORMATION ON COVERAGE OP6 TIONS.—A State child health plan shall— 

7 ‘‘(i) describe how the State will notify 

8 potential beneficiaries of coverage de9 scribed in subparagraph (A); 

10 ‘‘(ii) provide such notification in writ11 ing at least during the initial application 

12 for enrollment under this title and during 

13 redeterminations of eligibility if the indi14 vidual was enrolled before October 1, 2010; 

15 and 

16 ‘‘(iii) post a description of these cov17 erage options on any official Internet 

18 website that may be established by the 

19 State in connection with the plan. 

20 ‘‘(G) SEMIANNUAL VERIFICATION OF COV21 ERAGE.—If coverage described in subparagraph 

22 (A) is provided under a group health plan with 

23 respect to a targeted low-income child, the 

24 State child health plan shall provide for the col25 lection, at least once every six months, of proof 


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1 from the plan that the child is enrolled in such 

2 coverage. 

3 ‘‘(H) RULE OF CONSTRUCTION.—Nothing 

4 in this section is to be construed to prohibit a 

5 State from— 

6 ‘‘(i) offering wrap around benefits in 

7 order for a group health plan to meet any 

8 State-established minimum benefit require9 ments; 

10 ‘‘(ii) establishing a cost-effectiveness 

11 test to qualify for coverage under such a 

12 plan; 

13 ‘‘(iii) establishing limits on beneficiary 

14 cost-sharing under such a plan; 

15 ‘‘(iv) paying all or part of a bene16 ficiary’s cost-sharing requirements under 

17 such a plan; 

18 ‘‘(v) paying less than the full cost of 

19 the employee’s share of the premium under 

20 such a plan, including prorating the cost of 

21 the premium to pay for only what the 

22 State determines is the portion of the pre23 mium that covers targeted low-income chil24 dren; 


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1 ‘‘(vi) using State funds to pay for 

2 benefits above the Federal upper limit es3 tablished under subparagraph (D); 

4 ‘‘(vii) allowing beneficiaries enrolled in 

5 group health plans from changing plans to 

6 another coverage option available under 

7 this title at any time; or 

8 ‘‘(viii) providing any guidance or in9 formation it deems appropriate in order to 

10 help beneficiaries make an informed deci11 sion regarding the option to enroll in cov12 erage described in subparagraph (A). 

13 ‘‘(I) GROUP HEALTH PLAN DEFINED.—In 

14 this paragraph, the term ‘group health plan’ 

15 has the meaning given such term in section 

16 2791(a)(1) of the Public Health Service Act (42 

17 U.S.C. 300gg–91(a)(1)).’’. 

18 SEC. 3. IMPROVING BENEFICIARY CHOICE IN SCHIP. 

19 (a) REQUIRING OFFERING OF ALTERNATIVE COV20 ERAGE OPTIONS.—Section 2102 of the Social Security Act 

21 (42 U.S.C. 1397b), as amended by section 1, is amend22 ed— 

23 (1) in subsection (a)— 

24 (A) in paragraph (7), by striking ‘‘and’’ at 

25 the end; 


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1 (B) in paragraph (8), by striking the pe2 riod at the end and inserting ‘‘; and’’; and 

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

4 paragraph: 

5 ‘‘(9) effective for plan years beginning on or 

6 after October 1, 2010, how the plan will provide for 

7 child health assistance with respect to targeted low8 income children through alternative coverage options 

9 in accordance with subsection (d).’’; and 

10 (2) by adding at the end the following new sub11 section: 

12 ‘‘(d) ALTERNATIVE COVERAGE OPTIONS.— 

13 ‘‘(1) IN GENERAL.—Effective October 1, 2010, 

14 a State child health plan shall provide for the offer15 ing of any qualified alternative coverage that a 

16 qualified entity seeks to offer to targeted low-income 

17 children through the plan in the State. 

18 ‘‘(2) APPLICATION OF UNIFORM FINANCIAL

19 LIMITATION FOR ALL ALTERNATIVE COVERAGE OP20 TIONS.—With respect to all qualified alternative cov21 erage offered in a State, the State child health plan 

22 shall establish a uniform dollar limitation on the per 

23 capita monthly amount that will be paid by the 

24 State to the qualified entity with respect to such 

25 coverage provided to a targeted low-income child. 


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1 Such limitation may not be less than 90 percent of 

2 the per capita monthly payment made for coverage 

3 offered under the State child health plan that is not 

4 in the form of an alternative coverage option. Noth5 ing in this paragraph shall be construed— 

6 ‘‘(A) as requiring a State to provide for 

7 the full payment of premiums for qualified al8 ternative coverage; 

9 ‘‘(B) as preventing a State from charging 

10 additional premiums to cover the difference be11 tween the cost of qualified alternative coverage 

12 and the amount of such payment limitation; 

13 ‘‘(C) as preventing a State from using its 

14 own funds to provide a dollar limitation that ex15 ceeds the Federal financial participation as lim16 ited under section 2105(c)(8). 

17 ‘‘(3) QUALIFIED ALTERNATIVE COVERAGE DE18 FINED.—In this section, the term ‘qualified alter19 native coverage’ means health insurance coverage 

20 that— 

21 ‘‘(A) meets the coverage requirements of 

22 section 2103; and 

23 ‘‘(B) is offered by a qualified insurer, and 

24 not directly by the State. 


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1 ‘‘(4) QUALIFIED INSURER DEFINED.—In this 

2 section, the term ‘qualified insurer’ means, with re3 spect to a State, an entity that is licensed to offer 

4 health insurance coverage in the State.’’. 

5 (b) FEDERAL FINANCIAL PARTICIPATION FOR

6 QUALIFIED ALTERNATIVE COVERAGE.—Section 2105 of 

7 such Act (42 U.S.C. 1397d), as amended by sections 

8 301(a) and 601(a) of the Children’s Health Insurance 

9 Program Reauthorization Act of 2009 (Public Law 111– 

10 5), is amended— 

11 (1) in subsection (a)(1)(C), by inserting before 

12 the semicolon at the end the following: ‘‘and, subject 

13 to subsection (c)(12)(C), in the form of payment of 

14 the premiums for coverage for qualified alternative 

15 coverage’’; and 

16 (2) by adding at the end of subsection (c) the 

17 following new paragraph: 

18 ‘‘(12) PURCHASE OF QUALIFIED ALTERNATIVE

19 COVERAGE.— 

20 ‘‘(A) IN GENERAL.—Payment may be 

21 made to a State under subsection (a)(1)(C), 

22 subject to the provisions of this paragraph, for 

23 the purchase of qualified alternative coverage. 

24 ‘‘(B) WAIVER OF CERTAIN PROVISIONS.— 

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1 graph (A), no limitation on beneficiary cost2 sharing otherwise applicable under this title or 

3 title XIX shall apply. 

4 ‘‘(C) LIMITATION ON FFP.—The amount of 

5 the payment under paragraph (1)(C) for cov6 erage described in subparagraph (A) during a 

7 fiscal year in the aggregate for all such cov8 erage in the State may not exceed the product 

9 of— 

10 ‘‘(i) the national per capita expendi11 ture under this title (taking into account 

12 both Federal and State expenditures) for 

13 the previous fiscal year (as determined by 

14 the Secretary using the best available 

15 data); 

16 ‘‘(ii) the enhanced FMAP for the 

17 State and fiscal year involved; and 

18 ‘‘(iii) the number of targeted low-in19 come children for whom such coverage is 

20 provided. 

21 ‘‘(D) VOLUNTARY ENROLLMENT.—A State 

22 child health plan— 

23 ‘‘(i) may not require a targeted low24 income child to enroll in coverage described 


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1 in subparagraph (A) in order to obtain 

2 child health assistance under this title; 

3 ‘‘(ii) before providing such child 

4 health assistance for such coverage of a 

5 child, shall make available (which may be 

6 through an Internet website or other 

7 means) to the parent or guardian of the 

8 child information on the coverage available 

9 under this title, including benefits and 

10 cost-sharing; and 

11 ‘‘(iii) shall provide at least one oppor12 tunity per fiscal year for beneficiaries to 

13 switch coverage under this title from cov14 erage described in subparagraph (A) to the 

15 coverage that is otherwise made available 

16 under this title. 

17 ‘‘(E) INFORMATION ON COVERAGE OP18 TIONS.—A State child health plan shall— 

19 ‘‘(i) describe how the State will notify 

20 potential beneficiaries of coverage de21 scribed in subparagraph (A); 

22 ‘‘(ii) provide such notification in writ23 ing at least during the initial application 

24 for enrollment under this title and during 

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1 vidual was enrolled before October 1, 2010; 

2 and 

3 ‘‘(iii) post a description of these cov4 erage options on any official website that 

5 may be established by the State in connec6 tion with the plan. 

7 ‘‘(F) RULE OF CONSTRUCTION.—Nothing 

8 in this section is to be construed to prohibit a 

9 State from— 

10 ‘‘(i) establishing limits on beneficiary 

11 cost-sharing under such alternative cov12 erage; 

13 ‘‘(ii) paying all or part of a bene14 ficiary’s cost-sharing requirements under 

15 such coverage; 

16 ‘‘(iii) paying less than the full cost of 

17 a child’s share of the premium under such 

18 coverage, insofar as the premium for such 

19 coverage exceeds the limitation established 

20 by the State under subparagraph (C); 

21 ‘‘(iv) using State funds to pay for 

22 benefits above the Federal upper limit es23 tablished under subparagraph (C); or 

24 ‘‘(v) providing any guidance or infor25 mation it deems appropriate in order to 


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1 help beneficiaries make an informed deci2 sion regarding the option to enroll in cov3 erage described in subparagraph (A).’’. 

4 SEC. 4. APPLICATION TO MEDICAID. 

5 In accordance with rules established by the Secretary 

6 of Health and Human Services, the requirements imposed 

7 under a State child health plan under title XXI of the 

8 Social Security Act under the amendments made by the 

9 preceding sections of this subtitle shall apply in the same 

10 manner to a State plan under title XIX of such Act, except 

11 that— 

12 (1) such requirements shall not apply to indi13 viduals whose eligibility for medical assistance under 

14 such title is based on being aged, blind, or disabled 

15 or to individuals with a category of individuals de16 scribed in section 1937(a)(2)(B) of such Act; 

17 (2) the national per capita expenditures shall be 

18 determined based on a benchmark coverage de19 scribed in section 1937(b)(1) of such Act but with20 out regard to expenditures for individuals described 

21 in paragraph (1) or for nursing facility services and 

22 other long-term care services (as determined by the 

23 Secretary). 


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1 SEC. 5. EXPANSION OF HEALTH OPPORTUNITY ACCOUNT 

2 PROGRAM. 

3 (a) IN GENERAL.—Section 613 of the Children’s 

4 Health Insurance Program Reauthorization Act of 2009 

5 (Public Law 111–3) is repealed. 

6 (b) EXPANSION.—Section 1938(a)(2) of the Social 

7 Security Act (42 U.S.C. 1396u–8(a)(2)) is amended— 

8 (1) in subparagraph (A) by striking everything 

9 following the first sentence; and 

10 (2) by striking subparagraph (B). 

Æ 


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