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[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 13 Introduced in Senate (IS)]

105th CONGRESS
  1st Session
                                 S. 13

 To provide access to health insurance coverage for uninsured children 
                          and pregnant women.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            January 21, 1997

 Mr. Daschle (for himself, Ms. Mikulski, Mr. Kennedy, Mr. Breaux, Mr. 
  Dodd, Mrs. Murray, Mr. Inouye, Mr. Johnson, Ms. Moseley-Braun, Mr. 
  Rockefeller, Mr. Durbin, Mr. Kerry, Mr. Glenn, and Mr. Lautenberg) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To provide access to health insurance coverage for uninsured children 
                          and pregnant women.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Children's Health 
Coverage Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
        TITLE I--HEALTH INSURANCE COVERAGE FOR ELIGIBLE CHILDREN

Sec. 101. Establishment of program to provide eligible children with 
                            access to health insurance coverage.
Sec. 102. Procedure for obtaining coverage under certified health 
                            plans.
Sec. 103. Subsidy adjustment.
Sec. 104. Limitation on preexisting condition exclusion period and 
                            prohibition on discrimination.
Sec. 105. Maintenance of effort.
Sec. 106. Oversight by Secretary.
Sec. 107. Rules of construction.
         TITLE II--HEALTH INSURANCE COVERAGE FOR PREGNANT WOMEN

Sec. 201. Expanding health insurance coverage for pregnant women.
Sec. 202. Grants for innovative outreach.
         TITLE III--CHILDREN'S HEALTH COVERAGE SUBSIDY CREDITS

Sec. 301. Health coverage provided to premium subsidy eligible children 
                            through a tax credit for insurers.
Sec. 302. Health coverage provided to premium subsidy eligible children 
                            through a refundable income tax credit.

SEC. 2. DEFINITIONS.

    As used in this Act:
            (1) Certified health plan.--The term ``certified health 
        plan'' means a health plan that--
                    (A) is not an employer sponsored health plan;
                    (B) provides family coverage or child only coverage 
                options; and
                    (C) is certified by a State under section 
                101(b)(1).
            (2) Eligible child.--The term ``eligible child'' means an 
        individual who has not attained the age of 19.
            (3) Health insurance issuer.--The term ``health insurance 
        issuer'' means an insurance company, insurance service, or 
        insurance organization (including a health maintenance 
        organization, as defined in paragraph (3)) which is licensed to 
        engage in the business of insurance in a State and which is 
        subject to State law which regulates insurance (within the 
        meaning of section 514(b)(2) of the Employee Retirement Income 
        Security Act of 1974).
            (4) Health maintenance organization.--The term ``health 
        maintenance organization'' means--
                    (A) a Federally qualified health maintenance 
                organization (as defined in section 1301(a) of the 
                Public Health Service Act (42 U.S.C. 300e(a))),
                    (B) an organization recognized under State law as a 
                health maintenance organization, or
                    (C) a similar organization regulated under State 
                law for solvency in the same manner and to the same 
                extent as such a health maintenance organization.
            (5) Poverty line.--The term ``poverty line'' means the 
        income official poverty line (as defined by the Office of 
        Management and Budget, and revised annually in accordance with 
        section 673(2) of the Omnibus Budget Reconciliation Act of 
1981) applicable to a family of the size involved.
            (6) Premium subsidy eligible child.--The term ``premium 
        subsidy eligible child'' means any individual who--
                    (A) is an eligible child who was born after 
                December 31, 1984;
                    (B) is a citizen or qualified alien (as defined in 
                section 431(b) of the Personal Responsibility and Work 
                Opportunity Reconciliation Act of 1996 (8 U.S.C. 
                1641(b));
                    (C) has a family income determined under section 
                102(b) which does not exceed 300 percent of the poverty 
                line or has a family income within the limits described 
                in section 103(b)(2);
                    (D) is not eligible for assistance under a program 
                under title XIX of the Social Security Act or, except 
                as provided in section 102(e), under a similar State 
                program providing health insurance or other health care 
                coverage; and
                    (E)(i) except as provided in section 101(e) or 
                clause (ii), has not been covered, during the 12-month 
                period ending on the date on which the individual 
                applies for subsidy-eligible health coverage under this 
                title, under a health plan offered by a health 
                insurance issuer (unless such plan was funded under 
                title IX of the Social Security Act (42 U.S.C. 1101 et 
                seq.)) and--
                            (I) such individual does not have access to 
                        employer sponsored health coverage; or
                            (II) the employer of the individual or 
                        family involved offers employer sponsored 
                        health coverage and the employer contribution 
                        for such 12-month period does not exceed--
                                    (aa) in the case of an individual 
                                (or family) described in section 
                                103(a)(2)(A), 80 percent or more of the 
                                costs of enrollment in the plan; or
                                    (bb) in the case of an individual 
                                (or family) described in section 
                                103(a)(2)(B), 50 percent or more of the 
                                costs of enrollment in the plan; or
                    (ii) is, as of the date of enactment of this Act, 
                covered under a health plan that is not a group health 
                plan (as defined in section 2791 of the Public Health 
                Service Act), and the family of such individual is not 
                eligible to claim a deduction under section 162(l) of 
                the Internal Revenue Code of 1986.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (8) Subsidy eligible health coverage.--The term ``subsidy 
        eligible health coverage'' means health insurance coverage 
        under--
                    (A) a certified health plan; or
                    (B) an employer sponsored health plan providing 
                family coverage or child-only coverage options;
        for which a subsidy is available under this title.

        TITLE I--HEALTH INSURANCE COVERAGE FOR ELIGIBLE CHILDREN

SEC. 101. ESTABLISHMENT OF PROGRAM TO PROVIDE ELIGIBLE CHILDREN WITH 
              ACCESS TO HEALTH INSURANCE COVERAGE.

    (a) Establishment.--The Secretary shall establish a program under 
which a premium subsidy eligible child, and the family of such child, 
may receive a subsidy to be used to pay a portion of the premium 
associated with the enrollment of the child for subsidy eligible health 
coverage under a certified health plan or employer sponsored health 
plan.
    (b) State Responsibilities.--Under the program established under 
subsection (a)--
            (1) the insurance commissioner of a State may certify a 
        health plan if the commissioner determines that--
                    (A) the health plan--
                            (i) provides family or child-only coverage;
                            (ii) meets general coverage guidelines that 
                        are established by the Secretary and designed 
                        to ensure that the plan provides comprehensive 
                        coverage, including preventive, basic, and 
                        catastrophic benefits that meet the health care 
                        needs of children (either as part of a family 
                        plan or a child-only plan);
                    (B) the average premium for the enrollment of a 
                child under such plan is reasonable when taking into 
                consideration the demographic and health status related 
                factors of the population for which the plan will be 
                marketed;
                    (C) each premium subsidy eligible child that is 
                enrolled under the plan will be assessed the same 
                premium;
                    (D) the plan provides for guaranteed issue with 
                respect to premium subsidy eligible children;
                    (E) complies with the provisions of section 104 
                regarding preexisting condition exclusions;
                    (F) the health insurance issuer involved is 
                participating in any applicable reinsurance program 
                that has been established by the State to defray the 
                costs of unevenly distributed risk among issuers; and
                    (G) the plan meets any other criteria established 
                by the State;
            (2) the insurance commissioner of the State shall provide 
        information on the availability of certified health plans and 
        the availability of subsidies in accordance with this title;
            (3) the appropriate State entity (as determined by the 
        Chief Executive Officer of the State) shall conduct income 
        verification and reconciliation activities with respect to 
        eligible children and families desiring to participate in the 
        program in the State and issue certificates in accordance with 
        section 102;
            (4) the appropriate State entity (as determined under 
        paragraph (4)) shall be responsible for the collection of 
        premiums from premium subsidy eligible children and the 
        forwarding of such premiums to the appropriate certified health 
        plans;
            (5) the State (through its own authority or acting in 
        conjunction with the Secretary under subsection (f)(3)) shall 
        ensure that each eligible child in the State has a reasonable 
        choice of health insurance issuers that offer child-only 
        coverage consistent with the standards developed by the 
        Secretary under this title;
            (6) the State will establish any other requirements and 
        procedures necessary to carry out this title within the State; 
        and
            (7) the State shall comply with any other requirements 
        established by the Secretary.
    (c) Participation of Issuers.--
            (1) In general.--Any health plan may submit an application 
        with the appropriate State insurance commissioner for 
        certification under this section and such plan shall be 
        certified if it meets the requirements of subsection (b)(1). 
        Employer-sponsored health plans shall not be required to be 
        certified under this title.
            (2) Requirement for federal contractors.--
                    (A) In general.--Each health insurance issuer that 
                provides health coverage under contract with any 
                Federal program and that offers 1 or more health plans 
                that provide family coverage options shall submit an 
                application, with the appropriate State insurance 
                commissioner, for the certification of 1 or more health 
                plans that provide the children's only coverage 
                described in subsection (b)(1)(A). Such an issuer shall 
                apply for the certification of at least 1 health plan 
                that provides child-only coverage, and may apply for 
                the certification of 1 or more health plans that 
                provide family coverage if such plans provides coverage 
                for children as described in subsection (b)(1)(A).
                    (B) Penalty.--A health insurance issuer shall be 
                ineligible to provide benefits under a Federal contract 
                described in subparagraph (A) if--
                            (i) the issuer fails, in good faith, to 
                        submit an application as required under 
                        subparagraph (A);
                            (ii) the State insurance commissioner fails 
                        to certify a health plan of the issuer as 
meeting the requirements of this title; or
                            (iii) the issuer fails to make any 
                        modifications to the application or to a health 
                        plan as requested by the State insurance 
                        commissioner for the certification of a health 
                        plan.
                    (C) Participation in individual market.--
                Notwithstanding subparagraph (A), a health insurance 
                issuer described in such subparagraph shall not be 
                required to offer coverage in the individual market (as 
                defined in section 2791(e)(1)) unless the issuer is 
                otherwise participating in such market. Such an issuer 
                shall be required to offer coverage to eligible 
                children under this title through the participation of 
                the issuer in all group purchasing arrangements 
                operating in the area served by the issuer, except that 
                with respect to employer-sponsored health plans, the 
                obligation of an issuer to offer child-only coverage 
                shall be limited to employers to which such issuers are 
                otherwise offering coverage.
            (3) Expedited procedures.--The State insurance commissioner 
        of a State shall establish expedited procedures for the 
        certification of health plans that have been offered in the 
        insurance market in the State during the 1-year period 
        preceding the date on which a certification is sought.
            (4) Offering of coverage.--A health insurance issuer shall 
        offer certified health plans to each eligible child residing in 
        the area served by the issuer regardless of the family income 
        of such child. Coverage provided under such plans may vary in 
        accordance with this Act depending on whether the enrollee is 
        an eligible child or a premium subsidy eligible child. Such 
        coverage may be offered through insurance agents or brokers.
    (d) Average Coverage Amount.--
            (1) Determination.--The Secretary, in consultation with 
        State insurance commissioners and other experts in the field of 
        health insurance, shall determine the average coverage amount 
        with respect to certified health plans. The amount shall be 
        based on the average costs of comprehensive health insurance 
        coverage for children as determined using data derived from 
        existing State initiatives that have been established to 
        provide health care coverage for uninsured children and data on 
        the average market rates for health plans offering coverage 
        reasonably similar to that of the coverage offered under 
        certified health plans.
            (2) Adjustments.--The Secretary shall annually adjust the 
        average coverage amount determined under paragraph (1) to 
        ensure that such amount accurately reflects the reasonable 
        costs associated with the purchase of coverage under a 
        certified health plan and regional variations in health care 
        costs.
            (3) Application of amount to child portion of plan.--In 
        establishing and applying the average coverage amount under 
        paragraph (1), the Secretary shall ensure that the amount 
        relates solely to the comprehensive coverage applicable to the 
        premium subsidy eligible child. If coverage of a premium 
        subsidy eligible child is under a certified family plan, the 
        average coverage amount shall relate solely to that portion of 
        the plan that provides the coverage for the eligible child.
    (e) Waiver of Previous Coverage Limitation.--
            (1) Establishment of process.--The Secretary shall 
        establish a process to waive the limitation described in 
        section 2(6)(D) with respect to an individual if the Secretary 
        determines that the individual was covered under a health plan 
        during the period referred to in such section as a dependent of 
        another individual and that the coverage was terminated 
        involuntarily or the loss of coverage results from a change in 
        employment.
            (2) Limitation.--The process established under paragraph 
        (1) shall not permit a waiver with respect to previous coverage 
        that was terminated by an employer (or with respect to which 
        the contribution of the employer toward such coverage was 
        reduced) unless the Secretary determines that such coverage was 
        terminated because the employer ceased its operations or 
        because of other circumstances clearly unrelated to the 
        availability of subsidies under this title.
    (f) Provision of Technical Assistance by Secretary.--
            (1) Alternative procedures.--The Secretary, at the request 
        of and in conjunction with the insurance commissioner of a 
        State, shall assist the State in establishing alternative rate 
        review and approval procedures that apply to the health plans 
        seeking certification under this section. Any procedures 
        established under this paragraph shall be consistent with the 
        goals and requirements of this title.
            (2) Strategies to improve insurance market.--
                    (A) In general.--The Secretary, at the request of 
                and in conjunction with a State, shall develop and 
                pursue strategies to encourage competition, prevent 
                fraudulent practices, ensure the adequacy of rates to 
                prevent access barriers, and achieve goals consistent 
                with this title with respect to the health insurance 
                market in the State. Such strategies may include the 
                establishment of commercial insurance pooling 
                arrangements that may be used by small businesses and 
                integrated with other purchasing pools, the 
                implementation of competitive bidding mechanisms, and 
                the coordination of insurance delivery systems with 
                delivery systems under title XIX of the Social Security 
                Act.
                    (B) Termination.--The Secretary may require that a 
                State terminate or revise a strategy implemented by the 
                State under paragraph (1) if the Secretary determines 
                that the strategy conflicts with a provision of this 
                title.
            (3) Choice of issuers.--The Secretary, at the request of 
        and in conjunction with a State, shall assist the State in 
        identifying and implementing strategies to ensure that choice 
        is provided to eligible children in accordance with subsection 
        (b)(5). Such strategies may include the strategies described in 
        paragraph (2)(A).
    (g) Procedures to Identify Those Eligible for Medicaid.--In 
carrying out the program under this title, the Secretary shall 
establish procedures to identify premium subsidy eligible children 
whose enrollment in a certified health plan is subsidized under this 
title and who subsequently become eligible for assistance under a State 
plan under title XIX of the Social Security Act as a result of 
disability, the amount of health care costs, or similar factors. Such 
procedures, while ensuring the continuity and coordination of care, 
shall ensure that assistance under such title XIX is the primary payer 
for children eligible for such assistance.

SEC. 102. PROCEDURE FOR OBTAINING COVERAGE UNDER CERTIFIED HEALTH 
              PLANS.

    (a) Application.--
            (1) In general.--To be eligible to receive a subsidy for 
        the purchase of coverage under a certified health plan under 
        this title, a family on behalf of a premium subsidy eligible 
        child shall submit to the State entity designated under section 
        101(b)(4) an application that shall contain such income and 
        employment information as the State determines necessary to 
        make a determination with respect to the eligibility of such 
applicant for a subsidy under this title.
            (2) Time for filing.--A family on behalf of a premium 
        subsidy eligible child may file an application for a subsidy 
        under this title at any time in accordance with this 
        subsection.
            (3) Use of simple form.--For purposes of this subsection, 
        the State entity shall use an application that shall be as 
        simple in form as possible and understandable to the average 
        individual. The application may require attachment of such 
        documentation as deemed necessary by the State in order to 
        ensure eligibility for a subsidy.
            (4) Availability of forms.--The State entity shall make an 
        application form available through health care providers and 
        participating issuers, public assistance offices, public 
        libraries, and at other locations (including post offices) 
        accessible to a broad cross-section of families.
    (b) Issuance of Certificate.--
            (1) In general.--
                    (A) Notification of applicant.--If the State entity 
                described in subsection (a) determines that an 
                applicant is eligible for a subsidy under this title, 
                the entity shall notify the applicant of such 
                eligibility and request that the applicant designate a 
                certified health plan that the applicant desires to 
                enroll in.
                    (B) Notification of plan.--Upon a designation under 
                subparagraph (A), the entity shall forward a 
                certificate of eligibility on behalf of the applicant 
                to the designated plan. Such certificate shall contain 
                identifying information concerning the applicant and 
                the eligible child involved and the amount of the 
                subsidy for which the applicant is eligible.
            (2) Determination by state.--As elected by a family at the 
        time of the submission of an application under subsection (a), 
        the State entity shall make a determination concerning family 
        income either--
                    (A) by multiplying by a factor of 4 the income of 
                the family for the 3-month period immediately preceding 
                the month in which the application is made, or
                    (B) based upon estimated income for the entire year 
                in which the application is submitted.
            (3) Term.--A certificate under paragraph (1) shall remain 
        in effect for the 6-month period beginning on the date of the 
        issuance of the certificate. To continue to be eligible for a 
        subsidy, a family must apply to renew the certificate at the 
        end of each 6-month period.
    (c) Enrollment.--Upon receipt of a certificate of eligibility under 
subsection (b), a certified health plan shall ensure that the eligible 
child involved is appropriately enrolled and that a copy of the 
enrollment and coverage materials are provided to the enrollee. With 
respect to the certified health plan involved, the plan shall use the 
certificate in accordance with section 103 to compute the amount of the 
premiums that are owed by the family involved.
    (d) Payment of Premiums.--
            (1) In general.--Upon receipt of the appropriate enrollment 
        materials from a certified health plan under subsection (c), a 
        premium subsidy eligible child, the family income of which does 
        not exceed the limit described in section 103(a)(2)(B)(i), 
        shall be responsible for remitting to the State entity 
        described in subsection (a) the amount of the subsidy adjusted 
        premium owed under such plan.
            (2) Subsidy adjusted premium.--As used in paragraph (1), 
        the term ``subsidy adjusted premium'' means the total amount of 
        the premium assessed for the coverage of a premium subsidy 
        eligible child under a certified health plan less the amount of 
        the subsidy adjustment for which the child is eligible under 
        section 103.
            (3) Payment of issuer.--A State shall, under section 
        101(b)(4), establish procedures for the collection of premiums 
        under this subsection and the payment of such premiums to the 
        appropriate certified health plans.
    (e) Coverage Under Certain State Programs.--
            (1) Coordination of programs.--The Secretary, in 
        conjunction with States, shall provide for the coordination of 
        the program established under this title with State programs 
        that provide health insurance or other health care coverage for 
        children. Such coordination may include the use of subsidies 
        made available under this title to obtain coverage that 
        supplements any partial coverage provided through such a State 
        program or other coordinated arrangement.
            (2) Eligibility.--With respect to an eligible child who is 
        participating in a State program described in paragraph (1), a 
        State may, notwithstanding section 2(6)(D), determine that such 
        child is a premium subsidy eligible child.
            (3) Adjustment of average coverage amount.--The Secretary 
        shall adjust the average coverage amount under section 101(d) 
        with respect to an eligible child who is determined to be a 
        premium subsidy eligible child under paragraph (2) to reflect 
        the cost of enrolling the child in any plan providing 
        supplemental coverage as described in paragraph (1).

SEC. 103. SUBSIDY ADJUSTMENT.

    (a) Premium Subsidy Eligible Children.--
            (1) Eligibility.--An eligible child who has been determined 
        by a State entity under section 102(b) to be a premium subsidy 
        eligible child shall be eligible for a premium subsidy 
        adjustment in the amount determined under paragraph (2) to be 
        applied by the certified plan involved when computing the 
        amount of the premium owed by such child.
            (2) Amount.--
                    (A) Full subsidy.--
                            (i) In general.--With respect to a family, 
                        the family income of which does not exceed 200 
                        percent of the poverty line for a family of the 
                        size involved, the amount of a premium subsidy 
adjustment specified in this paragraph for a premium subsidy eligible 
child shall, subject to clause (ii), be equal to 90 percent of the 
annual premium for the child for such year for coverage of the child 
under a certified health plan.
                            (ii) Limitation.--The amount of a subsidy 
                        adjustment for which a premium subsidy eligible 
                        child is eligible under clause (i) may not 
                        exceed the average coverage amount for the 
                        child as determined under section 101(d) with 
                        respect to the region in which the plan is 
                        offered.
                    (B) Graduated subsidy.--
                            (i) In general.--With respect to a family, 
                        the family income of which exceeds 200, but 
                        does not exceed 300, percent of the poverty 
                        line for a family of the size involved, the 
                        amount of a premium subsidy adjustment 
                        specified in this paragraph for a premium 
                        subsidy eligible child shall be determined by 
                        substituting ``the applicable percentage'' for 
                        ``90 percent'' in subparagraph (A).
                            (ii) Applicable percentage.--For purposes 
                        of clause (i), the term ``applicable 
                        percentage'' shall be determined using the 
                        following table:

                    
                                                         The applicable
                    
                                                             percentage
                ``If the family income:
                                                              shall be:
                        Exceeds 200, but does not                 80   
                            exceed 225, percent of 
                            poverty.
                        Exceeds 225, but does not                 60   
                            exceed 250, percent of 
                            poverty.
                        Exceeds 250, but does not                 40   
                            exceed 275, percent of 
                            poverty.
                        Exceeds 275, but does not                 20   
                            exceed 300, percent of 
                            poverty.
                        Exceeds 300 percent of                    10   
                            poverty (subject to 
                            subsection (b)(2)).

    (b) Other Eligible Children.--
            (1) In general.--A premium subsidy eligible child who is 
        determined by the State to be a child described in paragraph 
        (2), shall be eligible for a premium subsidy adjustment in the 
        amount determined under paragraph (3) to be obtained through a 
        refundable tax credit determined under section 34A of the 
        Internal Revenue Code of 1986.
            (2) Income limitation.--A premium subsidy eligible child 
        described in this paragraph is a premium subsidy eligible child 
        the family income of which exceeds 300 percent of the poverty 
        line for a family of the size involved, but the adjusted gross 
        income (as defined in section 62 of the Internal Revenue Code 
        of 1986) of which is less than $75,000.
            (3) Amount.--
                    (A) In general.--A premium subsidy eligible child 
                described in paragraph (2) shall be eligible for a 
                premium subsidy adjustment which shall, subject to 
                subparagraph (B), be equal to 10 percent of the annual 
                premium for the child for such year for coverage of the 
                child under a certified health plan.
                    (B) Limitation.--The amount of a subsidy adjustment 
                for which a premium subsidy eligible child is eligible 
                under subparagraph (A) may not exceed the average 
                coverage amount for the child as determined under 
                section 101(d) with respect to the region in which the 
                plan is offered.
            (4) Purchase of coverage by those not eligible for 
        subsidy.--An eligible child who is not a premium subsidy 
        eligible child and who enrolls in a certified health plan shall 
        be responsible for the payment of the entire premium amount for 
        coverage under the plan. Such certified plan shall comply with 
        the applicable State insurance requirements and if such 
        requirements permit, may elect not to comply with the 
        provisions of subparagraphs (D) (relating to guaranteed issue) 
        and (E) (relating to preexisting condition exclusion) of 
        section 101(b)(1).
    (c) Determinations of Income.--For purposes of this section and 
section 102(b):
            (1) In general.--The term ``income'' means adjusted gross 
        income (as defined in section 62(a) of the Internal Revenue 
        Code of 1986)--
                    (A) determined without regard to sections 135, 
                162(l), 911, 931, and 933 of such Code; and
                    (B) increased by--
                            (i) the amount of interest received or 
                        accrued which is exempt from tax, plus
                            (ii) the amount of social security benefits 
                        (described in section 86(d) of such Code) which 
                        is not includible in gross income under section 
                        86 of such Code.
            (2) Family income.--The term ``family income'' means, with 
        respect to a family, the sum of the income for all members of 
        the family, not including the income of a dependent child with 
        respect to which no return is required under the Internal 
        Revenue Code of 1986.
    (d) Prohibition on Remitting Funds.--A health insurance issuer may 
not in any manner remit any portion of the premium that a family is 
responsible for under this title.

SEC. 104. LIMITATION ON PREEXISTING CONDITION EXCLUSION PERIOD AND 
              PROHIBITION ON DISCRIMINATION.

    (a) Preexisting Conditions.--
            (1) In general.--No preexisting condition exclusion shall 
        be imposed by a certified health plan or an employer-sponsored 
        health plan, with respect to the enrollment and coverage of any 
        premium subsidy eligible child.
            (2) Definition.--As used in this subsection, the term 
        ``preexisting condition exclusion'' shall have the meaning 
        given such term by section 2701(b)(1) of the Public Health 
        Service Act (as added by section 102 of the Health Insurance 
        Portability and Accountability Act of 1996).
    (b) Prohibition of Discrimination on Basis of Health Status.--
            (1) In eligibility to enroll.--
                    (A) In general.--Subject to subparagraph (B), a 
                health insurance issuer may not establish rules for 
                eligibility (including continued eligibility) of any 
                premium subsidy eligible child to enroll in a certified 
                health plan or employer-sponsored health plan based on 
                any of the following factors in relation to the premium 
                subsidy eligible child:
                            (i) Health status.
                            (ii) Medical condition (including both 
                        physical and mental illnesses).
                            (iii) Claims experience.
                            (iv) Receipt of health care.
                            (v) Medical history.
                            (vi) Genetic information.
                            (vii) Evidence of insurability (including 
                        conditions arising out of acts of domestic 
                        violence).
                            (viii) Disability.
                    (B) No application to benefits or exclusions.--
                Subparagraph (A) shall not be construed--
                            (i) to require a certified health plan or 
                        employer-sponsored health plan to provide 
                        particular benefits other than those provided 
                        under the terms of the coverage, or
                            (ii) to prevent such plan from establishing 
                        limitations or restrictions on the amount, 
                        level, extent, or nature of the benefits or 
                        coverage for similarly situated children 
                        enrolled in the plan.
            (2) In premium contributions.--
                    (A) In general.--With respect to a certified health 
                plan or employer-sponsored health plan, a health 
                insurance issuer may not require that any premium 
                subsidy eligible child (as a condition of enrollment or 
                continued enrollment under the certified or employer-
                sponsored health plan involved) to pay a premium or 
                contribution that is greater than such premium or 
                contribution for a similarly situated child enrolled in 
                the plan on the basis of any factor described in 
                paragraph (1)(A) in relation to the child.
                    (B) Construction.--Nothing in subparagraph (A) 
                shall be construed--
                            (i) to restrict the amount that an employer 
                        may be charged for coverage under a plan; or
                            (ii) to prevent a health insurance issuer 
                        from establishing premium discounts or rebates 
                        or modifying otherwise applicable copayments or 
                        deductibles in return for adherence to programs 
                        of health promotion and disease prevention.
    (c) Employer May Not Discriminate Against Individuals Eligible for 
a Subsidy.--
            (1) General rule.--An employer that elects to make employer 
        contributions on behalf of an individual who is an employee of 
        such employer, or who is a dependent of such employee, for 
        health insurance coverage of the type described in section 
        101(b)(1)(A) shall not condition, or vary such contributions 
        with respect to any such individual by reason of such 
        individual's or dependent's status as an child eligible for a 
        premium subsidy under this title.
            (2) Elimination of contributions.--An employer shall not be 
        treated as failing to meet the requirements of paragraph (1) if 
        the employer ceases to make employer contributions for health 
        insurance coverage for all its employees.

SEC. 105. MAINTENANCE OF EFFORT.

    A State may not modify the eligibility requirements for children 
under the State program under title XIX of the Social Security Act, as 
in effect on July 1, 1996, in any manner that would have the effect of 
reducing the eligibility of children for coverage under such program.

SEC. 106. OVERSIGHT BY SECRETARY.

    In the case of a determination by the Secretary that a State has 
failed to carry out or substantially enforce a provision (or 
provisions) of this title, the Secretary shall carry out or enforce 
such provision (or provisions) with respect to the coverage of eligible 
children in such State.

SEC. 107. RULES OF CONSTRUCTION.

    Nothing in this title shall be construed--
            (1) as establishing premiums for health plans or otherwise 
        limiting the competitive health insurance market within a 
        State;
            (2) as limiting the ability of a State to establish health 
        insurance purchasing pools, initiate a competitive bidding 
        process with respect to certified health plans, or pursue other 
        innovative strategies aimed at maximizing the potential of 
        market forces to achieve quality and cost effectiveness; or
            (3) as superseding any provision of State law which--
                    (A) provides for the application of criteria, in 
                addition to those described in section 101(b)(1), for 
                the certification of health plans so long as such 
                criteria do not directly conflict with the goals of the 
                criteria described in such section; or
                    (B) establishes, implements, or continues in effect 
                any standard or requirement relating solely to health 
                insurance issuers in connection with certified health 
                plans or the coverage of eligible children, except to 
                the extent that such standard or requirement prevents 
                the application of a requirement of this title.

SEC. 108. MISCELLANEOUS PROVISIONS.

    (a) Transition Rule.--With respect to the 12-month period described 
in section 2(6)(E), such period shall be reduced as follows:
            (1) For premium subsidy eligible children desiring to 
        enroll in a certified plan during the first full month after 
        the date on which this Act becomes effective, the period shall 
        be 6 months.
            (2) For premium subsidy eligible children desiring to 
        enroll in a certified plan during the second full month after 
        the date on which this Act becomes effective, the period shall 
        be 7 months.
            (3) For premium subsidy eligible children desiring to 
        enroll in a certified plan during the third full month after 
        the date on which this Act becomes effective, the period shall 
        be 8 months.
            (4) For premium subsidy eligible children desiring to 
        enroll in a certified plan during the fourth full month after 
        the date on which this Act becomes effective, the period shall 
        be 9 months.
            (5) For premium subsidy eligible children desiring to 
        enroll in a certified plan during the fifth full month after 
        the day on which this Act becomes effective, the period shall 
        be 10 months.
            (6) For premium subsidy eligible children desiring to 
        enroll in a certified plan during the sixth full month after 
        the day on which this Act becomes effective, the period shall 
        be 11 months.

         TITLE II--HEALTH INSURANCE COVERAGE FOR PREGNANT WOMEN

SEC. 201. EXPANDING HEALTH INSURANCE COVERAGE FOR PREGNANT WOMEN.

    (a) Establishment of Grant Program.--The Secretary shall establish 
a program to provide grants to States to enable such States to assist 
pregnant women in obtaining appropriate prenatal, perinatal and 
postnatal care.
    (b) Application.--To be eligible to receive a grant under this 
section, a State shall prepare and submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require.
    (c) Amount of Grant.--
            (1) In general.--From the amount available for grants under 
        subsection (e) for a fiscal year, the Secretary shall award a 
        grant to each State in an amount that is equal to an amount 
        which bears the same relationship to such amount as the 
        pregnancy coverage amount of the State as determined under 
        paragraph (2) bears to the pregnancy coverage amount for all 
        States.
            (2) Pregnancy coverage amount.--For purposes of paragraph 
        (1), the pregnancy coverage amount of a State shall be equal 
        to--
                    (A) the number of estimated uninsured pregnant 
                women in the State the family income of which does not 
                exceed 300 percent of the poverty line for a family of 
                the size involved; and
                    (B) the average per capita cost of providing 
                pregnancy benefits to such women.
            (3) Guidelines.--The Secretary, in consultation with the 
        National Association of Insurance Commissioners and the 
        American Academy of Actuaries, shall establish guidelines for 
        the determination of the amounts described in subparagraphs (A) 
        and (B) of paragraph (2).
    (d) Use of Amounts.--A State shall use amounts received under a 
grant provided under this section to assist pregnant women in obtaining 
appropriate prenatal, perinatal and postnatal care as approved by the 
Secretary.
    (e) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 202. GRANTS FOR INNOVATIVE OUTREACH.

    (a) Establishment of Grant Program.--The Secretary shall establish 
a program to provide categorical grants to States to assist children 
and pregnant women in obtaining health care services and coverage for 
which they are eligible.
    (b) Application.--To be eligible to receive a grant under this 
section, a State shall prepare and submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require.
    (c) Amount of Grant.--The Secretary shall determine the amount of a 
grant provided under this section.
    (d) Use of Amounts.--A State shall use amounts received under a 
grant provided under this section to carry out innovative outreach 
activities to promote the timely enrollment of pregnant women and 
children in health plans or other programs that provide prenatal care 
and other pregnancy-related services or comprehensive care for 
children.
    (e) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary to carry out this section.

         TITLE III--CHILDREN'S HEALTH COVERAGE SUBSIDY CREDITS

SEC. 301. HEALTH COVERAGE PROVIDED TO PREMIUM SUBSIDY ELIGIBLE CHILDREN 
              THROUGH A TAX CREDIT FOR INSURERS.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to other credits) is 
amended by adding at the end the following:

``SEC. 30B. CHILDREN'S HEALTH COVERAGE SUBSIDY CREDIT FOR INSURERS.

    ``(a) Determination of Amount.--There shall be allowed as a credit 
against the applicable tax for the taxable year an amount equal to the 
eligible premium subsidies provided by a health insurance issuer for 
coverage under 1 or more certified health plans during the taxable year 
under the Children's Health Coverage Act.
    ``(b) Applicable Tax.--For purposes of this section, the term 
`applicable tax' means the excess (if any) of--
            ``(1) the sum of--
                    ``(A) the tax imposed under this chapter (other 
                than the taxes imposed under the provisions described 
                in subparagraphs (C) through (O) of section 26(b)(1)), 
                plus
                    ``(B) the tax imposed under chapter 21, over
            ``(2) the credits allowable under subparts B and D of this 
        part.
    ``(c) Eligible Premium Subsidies.--The term `eligible premium 
subsidies' means premium subsidies for premium subsidy eligible 
children (as defined in section 2(6) of the Children's Health Coverage 
Act).
    ``(d) Other Definitions.--For purposes of this section, the terms 
`health insurance issuer' and `certified health plan' have the meaning 
given those terms by section 2 of the Children's Health Coverage 
Act.''.
    (b) Transfer to Trust Funds.--The Secretary of the Treasury shall 
transfer from the general fund to the Old-Age, Survivors, and 
Disability Insurance Trust Fund and to the Hospital Insurance Trust 
Fund amounts equivalent to the amount of the reduction in taxes imposed 
by section 3111 of the Internal Revenue Code of 1986 by reason of the 
credit determined under section 30B (relating to the children's health 
coverage subsidy credit for insurers). Any such transfer shall be made 
at the same time the reduced taxes would have been deposited in either 
such Trust Fund.
    (c) Conforming Amendment.--The table of sections for subpart B of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:

``Sec. 30B. Children's health coverage subsidy credit for insurers.''.
    (e) Effective Date.--The amendments made by this section apply to 
taxable years beginning after December 31, 1997.

SEC. 302. HEALTH COVERAGE PROVIDED TO PREMIUM SUBSIDY ELIGIBLE CHILDREN 
              THROUGH A REFUNDABLE INCOME TAX CREDIT.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable personal 
credits) is amended by inserting after section 34 the following:

``SEC. 34A. CHILDREN'S HEALTH COVERAGE.

    ``(a) Allowance of Credit.--In the case of a premium subsidy 
eligible individual, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year an amount equal to the 
premium subsidy determined under section 103(b)(3) of the Children's 
Health Coverage Act for such individual for the taxable year.
    ``(b) Premium Subsidy Eligible Individual.--For purposes of this 
section, the term `premium subsidy eligible individual' means, with 
respect to any period, an individual who has as a dependent for the 
taxable year 1 or more premium subsidy eligible children described in 
section 103(b)(2) of the Children's Health Coverage Act.
    ``(c) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the purposes of this section.''.
    (b) Coordination With Deductions for Health Insurance Expenses.--
            (1) Self-employed individuals.--Section 162(l) of the 
        Internal Revenue Code of 1986 (relating to special rules for 
        health insurance costs of self-employed individuals) is amended 
        by adding after paragraph (5) the following:
            ``(6) Coordination with children's health coverage 
        credit.--Paragraph (1) shall not apply to any amount taken into 
        account in computing the amount of the credit allowed under 
        section 34A.''.
            (2) Medical, dental, etc., expenses.--Section 213(e) of 
        such Code (relating to exclusion of amounts allowed for care of 
        certain dependents) is amended by inserting ``or section 34A'' 
        after ``section 21''.
    (c) Conforming Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 34 the 
following:

                              ``Sec. 34A. Children's health 
                                        coverage.''.
    (d) Effective Date.--The amendments made by this section apply to 
taxable years beginning after December 31, 1997.
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