II 

108TH CONGRESS 

1ST SESSION S. 1843

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 

NOVEMBER 10, 2003

Ms. SNOWE (for herself and Mr. KENNEDY) 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 2003’’. 

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. 

Sec. 3. FamilyCare coverage of parents and pregnant women under the medicaid program and title XXI. 

Sec. 4. Automatic enrollment of children born to title XXI parents. 
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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. Elimination of 100 hour rule and other AFDC-related eligibility restrictions. 

Sec. 9. State grant program for market innovation. 

Sec. 10. Limitations on conflicts of interest. 

Sec. 11. Title XXI funding. 

Sec. 12. Demonstration programs to improve medicaid and title XXI outreach 

to homeless individuals and families. 

Sec. 13. Additional title XXI revisions. 

Sec. 14. Effective date.

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 AND PREG12 NANT WOMEN UNDER THE MEDICAID PRO13 GRAM AND TITLE XXI. 

14 (a) INCENTIVES TO IMPLEMENT FAMILYCARE COV15 ERAGE.—

16 (1) UNDER MEDICAID.—

17 (A) ESTABLISHMENT OF NEW OPTIONAL

18 ELIGIBILITY CATEGORY.—Section 
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1 1902(a)(10)(A)(ii) of the Social Security Act 

2 (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended—

3 (i) by striking ‘‘or’’ at the end of sub4 clause (XVII); 

5 (ii) by adding ‘‘or’’ at the end of sub6 clause (XVIII); and 

7 (iii) by adding at the end the fol8 lowing: 

9 ‘‘(XIX) who are individuals de10 scribed in subsection (k)(1) (relating 

11 to parents of categorically eligible chil12 dren);’’. 

13 (B) PARENTS DESCRIBED.—Section 1902 

14 of the Social Security Act is further amended 

15 by inserting after subsection (j) the following: 

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

17 are individuals—

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

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

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

21 and who is eligible for medical assistance under sub22 section (a)(10)(A); 

23 ‘‘(ii) who are not otherwise eligible for medical 

24 assistance under such subsection or under a waiver 

25 approved under section 1115 or otherwise (except 
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1 under section 1931 or under subsection 

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

3 ‘‘(iii) whose family income exceeds the effective 

4 income level or resource level applicable under the 

5 State plan under part A of title IV as in effect as 

6 of July 16, 1996, but does not exceed the highest ef7 fective income level applicable to a child in the fam8 ily under this title. 

9 ‘‘(B) In establishing an income eligibility level for in10 dividuals described in this paragraph, a State may apply 

11 to such individuals the highest effective income level appli12 cable to a child in the family under this title in order to 

13 ensure that such individuals are enrolled in the same pro14 gram as their children. 

15 ‘‘(C) An individual may not be treated as being de16 scribed in this paragraph unless, at the time of the individ17 ual’s enrollment under this title, the child referred to in 

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

19 under this title. 

20 ‘‘(D) In this subsection, the term ‘parent’ has the 

21 meaning given the term ‘caretaker relative’ for purposes 

22 of carrying out section 1931. 

23 ‘‘(2) In the case of a parent described in paragraph 

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

25 child health assistance under title XXI, the State may 
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1 elect (on a uniform basis) to enroll all such parents under 

2 this title or under title XXI.’’. 

3 (C) ENHANCED MATCHING FUNDS AVAIL4 ABLE IF CERTAIN CONDITIONS MET.—Section 

5 1905 of the Social Security Act (42 U.S.C. 

6 1396d) is amended—

7 (i) in the fourth sentence of sub8 section (b), by striking ‘‘or subsection 

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

10 and 

11 (ii) in subsection (u)—

12 (I) by redesignating paragraph 

13 (4) as paragraph (6), and 

14 (II) by inserting after paragraph 

15 (3) the following:

16 ‘‘(4) For purposes of subsection (b): 

17 ‘‘(A) FAMILYCARE PARENTS.—The expendi18 tures described in this subparagraph are the expend19 itures described in the following clauses (i) and (ii): 

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

21 in clause (iii) are met, expenditures for medical 

22 assistance for—

23 ‘‘(I) parents described in section 

24 1902(k)(1);
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1 ‘‘(II) parents who would be de2 scribed in section 1902(k)(1) but for 

3 the fact that they are eligible for med4 ical assistance under section 1931 or 

5 under a waiver approved under section 

6 1115 and whose family income ex7 ceeds the effective income level appli8 cable under section 1931 or under a 

9 waiver approved under section 1115 

10 to a family of the size involved as of 

11 January 1, 2004; and 

12 ‘‘(III) in the case of a State that, 

13 as of January 1, 2004, has an effec14 tive income level under section 1931 

15 or under a waiver approved under sec16 tion 1115 for parents described in 

17 section 1902(k)(1)(A)(i) that exceeds 

18 100 percent of the poverty line, par19 ents described in such section whose 

20 family income exceeds 100 percent of 

21 the poverty line. 

22 ‘‘(ii) CERTAIN PREGNANT WOMEN.—If the 

23 conditions described in clause (iv) are met, ex24 penditures for medical assistance for pregnant 

25 women described in subsection (n) or under sec-
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1 tion 1902(l)(1)(A) in a family the income of 

2 which exceeds the effective income level applica3 ble under subsection (a)(10)(A)(i)(III) or 

4 (l)(2)(A) of section 1902 to a family of the size 

5 involved as of January 1, 2004. 

6 ‘‘(iii) CONDITIONS FOR EXPENDITURES

7 FOR PARENTS.—The conditions described in 

8 this clause are the following: 

9 ‘‘(I) The State has a State child 

10 health plan under title XXI which (wheth11 er implemented under such title or under 

12 this title) has an effective income level for 

13 children that is at least 200 percent of the 

14 poverty line. 

15 ‘‘(II) Subject to the availability of the 

16 State’s allotments under title XXI, the 

17 State child health plan under that title 

18 does not limit the acceptance of applica19 tions, does not use a waiting list for chil20 dren who meet eligibility standards to 

21 qualify for assistance, and provides bene22 fits to all children in the State who apply 

23 for and meet eligibility standards. 

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

25 and title XXI do not provide coverage for 
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1 parents with higher family income without 

2 covering parents with a lower family in3 come. 

4 ‘‘(IV) The State does not apply an in5 come level for parents that is lower than 

6 the effective income level (expressed as a 

7 percent of the poverty line) that has been 

8 specified under the State plan under title 

9 XIX (including under a waiver authorized 

10 by the Secretary or under section 

11 1902(r)(2)), as of January 1, 2004, to be 

12 eligible for medical assistance as a parent 

13 under this title. 

14 ‘‘(iv) CONDITIONS FOR EXPENDITURES

15 FOR CERTAIN PREGNANT WOMEN.—The condi16 tions described in this clause are the following: 

17 ‘‘(I) The State has established an ef18 fective income eligibility level for pregnant 

19 women under subsection (a)(10)(A)(i)(III) 

20 or (l)(2)(A) of section 1902 that is at least 

21 185 percent of the poverty line. 

22 ‘‘(II) The State plans under this title 

23 and title XXI do not provide coverage for 

24 pregnant women described in subpara25 graph (A)(ii) with higher family income 
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1 without covering such pregnant women 

2 with a lower family income. 

3 ‘‘(III) The State does not apply an in4 come level for pregnant women that is 

5 lower than the effective income level (ex6 pressed as a percent of the poverty line 

7 and considering applicable income dis8 regards) that has been specified under the 

9 State plan under subsection 

10 (a)(10)(A)(i)(III) or (l)(2)(A) of section 

11 1902, as of January 1, 2004, to be eligible 

12 for medical assistance as a pregnant 

13 woman. 

14 ‘‘(IV) The State satisfies the condi15 tions described in subclauses (I) and (II) 

16 of clause (iii). 

17 ‘‘(v) DEFINITIONS.—For purposes of this 

18 subsection: 

19 ‘‘(I) The term ‘parent’ has the mean20 ing given such term for purposes of section 

21 1902(k)(1). 

22 ‘‘(II) The term ‘poverty line’ has the 

23 meaning given such term in section 

24 2110(c)(5).’’. 
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1 (D) PAYMENT FROM TITLE XXI ALLOT2 MENT FOR MEDICAID EXPANSION COSTS; ELIMI3 NATION OF COUNTING MEDICAID CHILD PRE4 SUMPTIVE ELIGIBILITY COSTS AGAINST TITLE

5 XXI ALLOTMENT.—Section 2105(a)(1) of the 

6 Social Security Act (42 U.S.C. 1397ee(a)(1)) is 

7 amended—

8 (i) in the matter preceding subpara9 graph (A), by striking ‘‘(or, in the case of 

10 expenditures described in subparagraph 

11 (B), the Federal medical assistance per12 centage (as defined in the first sentence of 

13 section 1905(b)))’’; and 

14 (ii) by striking subparagraph (B) and 

15 inserting the following: 

16 ‘‘(B) for the provision of medical assist17 ance that is attributable to expenditures de18 scribed in section 1905(u)(4)(A);’’. 

19 (2) UNDER TITLE XXI.—

20 (A) FAMILYCARE COVERAGE.—Title XXI 

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

22 seq.) is amended by adding at the end the fol23 lowing:
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1 ‘‘SEC. 2111. OPTIONAL FAMILYCARE COVERAGE OF PAR2 ENTS OF TARGETED LOW-INCOME CHILDREN 

3 OR TARGETED LOW-INCOME PREGNANT 

4 WOMEN. 

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

6 other provision of this title, a State may provide for cov7 erage, through an amendment to its State child health 

8 plan under section 2102, of parent health assistance for 

9 targeted low-income parents, pregnancy-related assistance 

10 for targeted low-income pregnant women, or both, in ac11 cordance with this section, but only if—

12 ‘‘(1) with respect to the provision of parent 

13 health assistance, the State meets the conditions de14 scribed in clause (iii) of section 1905(u)(4)(A); 

15 ‘‘(2) with respect to the provision of pregnancy16 related assistance, the State meets the conditions de17 scribed in clause (iv) of section 1905(u)(4)(A); and 

18 ‘‘(3) in the case of parent health assistance for 

19 targeted low-income parents, the State elects to pro20 vide medical assistance under section 

21 1902(a)(10)(A)(ii)(XIX), under section 1931, or 

22 under a waiver under section 1115 to individuals de23 scribed in section 1902(k)(1)(A)(i) and elects an ef24 fective income level that, consistent with paragraphs 

25 (1)(B) and (2) of section 1902(k), ensures that such 

26 individuals are enrolled in the same program as their 
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1 children if their children are eligible for coverage 

2 under title XIX (including under a waiver authorized 

3 by the Secretary or under section 1902(r)(2)).’’. 

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

5 ‘‘(1) PARENT HEALTH ASSISTANCE.—The term 

6 ‘parent health assistance’ has the meaning given the 

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

8 any reference to targeted low-income children were 

9 a reference to targeted low-income parents. 

10 ‘‘(2) PARENT.—The term ‘parent’ has the 

11 meaning given the term ‘caretaker relative’ for pur12 poses of carrying out section 1931. 

13 ‘‘(3) PREGNANCY-RELATED ASSISTANCE.—The 

14 term ‘pregnancy-related assistance’ has the meaning 

15 given the term child health assistance in section 

16 2110(a) as if any reference to targeted low-income 

17 children were a reference to targeted low-income 

18 pregnant women, except that the assistance shall be 

19 limited to services related to pregnancy (which in20 clude prenatal, delivery, and postpartum services) 

21 and to other conditions that may complicate preg22 nancy. 

23 ‘‘(4) TARGETED LOW-INCOME PARENT.—The 

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

25 given the term targeted low-income child in section 
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1 2110(b) as if the reference to a child were deemed 

2 a reference to a parent (as defined in paragraph (3)) 

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

4 ‘‘(A) there shall be substituted for the in5 come level described in paragraph (1)(B)(ii)(I) 

6 the applicable income level in effect for a tar7 geted low-income child; 

8 ‘‘(B) in paragraph (3), January 1, 2004, 

9 shall be substituted for July 1, 1997; and 

10 ‘‘(C) in paragraph (4), January 1, 2004, 

11 shall be substituted for March 31, 1997. 

12 ‘‘(5) TARGETED LOW-INCOME PREGNANT

13 WOMAN.—The term ‘targeted low-income pregnant 

14 woman’ means a woman—

15 ‘‘(A) during pregnancy and through the 

16 end of the month in which the 60-day period 

17 (beginning on the last day of her pregnancy) 

18 ends; 

19 ‘‘(B) whose family income exceeds the ef20 fective income level (expressed as a percent of 

21 the poverty line and considering applicable in22 come disregards) that has been specified under 

23 subsection (a)(10)(A)(i)(III) or (l)(2)(A) of sec24 tion 1902, as of January 1, 2002, to be eligible 

25 for medical assistance as a pregnant woman 
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1 under title XIX but does not exceed the income 

2 eligibility level established under the State child 

3 health plan under this title for a targeted low4 income child; and 

5 ‘‘(C) who satisfies the requirements of 

6 paragraphs (1)(A), (1)(C), (2), and (3) of sec7 tion 2110(b). 

8 ‘‘(c) REFERENCES TO TERMS AND SPECIAL

9 RULES.—In the case of, and with respect to, a State pro10 viding for coverage of parent health assistance to targeted 

11 low-income parents or pregnancy-related assistance to tar12 geted low-income pregnant women under subsection (a), 

13 the following special rules apply: 

14 ‘‘(1) Any reference in this title (other than in 

15 subsection (b)) to a targeted low-income child is 

16 deemed to include a reference to a targeted low-in17 come parent or a targeted low-income pregnant 

18 woman (as applicable). 

19 ‘‘(2) Any such reference to child health assist20 ance—

21 ‘‘(A) with respect to such parents is 

22 deemed a reference to parent health assistance; 

23 and 
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1 ‘‘(B) with respect to such pregnant women, 

2 is deemed a reference to pregnancy-related as3 sistance. 

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

5 case of a family or pregnant woman provided cov6 erage under this section, the limitation on total an7 nual aggregate cost-sharing shall be applied to the 

8 entire family or such pregnant woman. 

9 ‘‘(4) In applying section 2110(b)(4), any ref10 erence to ‘section 1902(l)(2) or 1905(n)(2) (as se11 lected by a State)’ is deemed a reference to the ef12 fective income level applicable to parents under sec13 tion 1931 or under a waiver approved under section 

14 1115, or, in the case of a pregnant woman, the in15 come level established under section 1902(l)(2)(A). 

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

17 reference to children found through screening to be 

18 eligible for medical assistance under the State med19 icaid plan under title XIX is deemed a reference to 

20 parents and pregnant women. 

21 ‘‘(6) With respect to a targeted low-income par22 ent or a targeted low-income pregnant woman, there 

23 shall be no exclusion of benefits for services based 

24 on any preexisting condition.’’.
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1 (B) ADDITIONAL ALLOTMENT FOR STATES

2 PROVIDING COVERAGE OF PARENTS OR PREG3 NANT WOMEN.—

4 (i) IN GENERAL.—Section 2104 of the 

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

6 amended by inserting after subsection (c) 

7 the following: 

8 ‘‘(d) ADDITIONAL ALLOTMENTS FOR STATE COV9 ERAGE OF PARENTS OR PREGNANT WOMEN.—

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

11 For the purpose of providing additional allotments 

12 to States under this title, there is appropriated, out 

13 of any money in the Treasury not otherwise appro14 priated—

15 ‘‘(A) for fiscal year 2005, $5,000,000,000; 

16 ‘‘(B) for each of fiscal years 2006 and 

17 2007, $6,000,000,000; and 

18 ‘‘(C) for each of fiscal years 2008 through 

19 2011, $7,000,000,000. 

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

21 ‘‘(A) IN GENERAL.—In addition to the al22 lotments provided under subsections (b) and 

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

24 amount available for the additional allotments 

25 under paragraph (1) for a fiscal year, the Sec-
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1 retary shall allot to each State with a State 

2 child health plan approved under this title—

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

4 than a commonwealth or territory de5 scribed in clause (ii), the same proportion 

6 as the proportion of the State’s allotment 

7 under subsection (b) (determined without 

8 regard to subsection (f)) to the total 

9 amount of the allotments under subsection 

10 (b) for such States eligible for an allotment 

11 under this paragraph for such fiscal year; 

12 and 

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

14 territory described in subsection (c)(3), the 

15 same proportion as the proportion of the 

16 commonwealth’s or territory’s allotment 

17 under subsection (c) (determined without 

18 regard to subsection (f)) to the total 

19 amount of the allotments under subsection 

20 (c) for commonwealths and territories eligi21 ble for an allotment under this paragraph 

22 for such fiscal year. 

23 ‘‘(B) AVAILABILITY AND REDISTRIBUTION

24 OF UNUSED ALLOTMENTS.—In applying sub25 sections (e) and (f) with respect to additional 
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1 allotments made available under this subsection, 

2 the procedures established under such sub3 sections shall ensure such additional allotments 

4 are only made available to States which have 

5 elected to provide coverage under section 2111. 

6 ‘‘(3) USE OF ADDITIONAL ALLOTMENT.—Addi7 tional allotments provided under this subsection are 

8 not available for amounts expended before October 

9 1, 2004. Such amounts are available for amounts ex10 pended on or after such date for child health assist11 ance for targeted low-income children, as well as for 

12 parent health assistance for targeted low-income 

13 parents, and pregnancy-related assistance for tar14 geted low-income pregnant women.

15 ‘‘(4) REQUIRING ELECTION TO PROVIDE COV16 ERAGE.—No payments may be made to a State 

17 under this title from an allotment provided under 

18 this subsection unless the State has made an elec19 tion to provide parent health assistance for targeted 

20 low-income parents, or pregnancy-related assistance 

21 for targeted low-income pregnant women.’’. 

22 (ii) CONFORMING AMENDMENTS.—

23 Section 2104 of the Social Security Act 

24 (42 U.S.C. 1397dd) is amended—
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1 (I) in subsection (a), by inserting 

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

3 ‘‘under this section,’’; 

4 (II) in subsection (b)(1), by in5 serting ‘‘and subsection (d)’’ after 

6 ‘‘Subject to paragraph (4)’’; and 

7 (III) in subsection (c)(1), by in8 serting ‘‘subject to subsection (d),’’ 

9 after ‘‘for a fiscal year,’’. 

10 (C) NO COST-SHARING FOR PREGNANCY11 RELATED BENEFITS.—Section 2103(e)(2) of 

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

13 1397cc(e)(2)) is amended—

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

15 PREGNANCY-RELATED SERVICES’’ after 

16 ‘‘PREVENTIVE SERVICES’’; and 

17 (ii) by inserting before the period at 

18 the end the following: ‘‘and for pregnancy19 related services’’. 

20 (b) OPTIONAL APPLICATION OF PRESUMPTIVE ELI21 GIBILITY PROVISIONS TO PARENTS.—Section 1920A of 

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

23 by adding at the end the following: 

24 ‘‘(e) A State may elect to apply the previous provi25 sions of this section to provide for a period of presumptive 
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1 eligibility for medical assistance for a parent (as defined 

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

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

4 (c) INCENTIVE PAYMENTS FOR EXPANSION OF COV5 ERAGE TO PARENTS AND PREGNANT WOMEN.—Section 

6 1903 of the Social Security Act (42 U.S.C. 1396b) is 

7 amended by adding at the end the following: 

8 ‘‘(x) INCENTIVE PAYMENTS FOR EXPANSION OF

9 COVERAGE OF PARENTS AND PREGNANT WOMEN.—

10 ‘‘(1) AUTHORITY TO MAKE PAYMENTS.—With 

11 respect to fiscal year 2005 or 2006, the Secretary 

12 shall, in addition to any other payments made to a 

13 State under this section for such fiscal year, pay 

14 each State an amount equal to the FamilyCare ex15 pansion incentive payment payable to the State 

16 under this subsection for the fiscal year. 

17 ‘‘(2) FAMILYCARE EXPANSION INCENTIVE PAY18 MENT.—Subject to paragraph (3), the FamilyCare 

19 expansion incentive payment for a FamilyCare ex20 pansion State for each of fiscal years 2005 and 2006 

21 is equal to the product of—

22 ‘‘(A) $1,000,000,000; and 

23 ‘‘(B) the ratio (expressed as a percentage) 

24 of—

25 ‘‘(i) with respect to such a State—
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1 ‘‘(I) the total number of parents 

2 or pregnant women who are provided 

3 parent health assistance or pregnancy4 related assistance under this title or 

5 title XXI only under section 

6 1902(a)(10)(ii)(XIX) or section 2111 

7 in the State during the fiscal year; 

8 multiplied by 

9 ‘‘(II) the total number of months 

10 that such parents or pregnant women 

11 are provided such assistance during 

12 the fiscal year in the State; to 

13 ‘‘(ii) the product of—

14 ‘‘(I) the total number of such 

15 parents or pregnant women who are 

16 provided such assistance during the 

17 fiscal year in all such States; multi18 plied by 

19 ‘‘(II) the total number of months 

20 that all such parents or pregnant 

21 women are provided such assistance 

22 during the fiscal year in all such 

23 States. 

24 ‘‘(3) LIMITATION.—The FamilyCare expansion 

25 incentive payment for a FamilyCare expansion State 
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1 for a fiscal year may not exceed the State share of 

2 the total amount of expenditures incurred by the 

3 State for that fiscal year for providing parent health 

4 assistance or pregnancy-related assistance under this 

5 title or title XXI to parents or pregnant women 

6 under section 1902(a)(10)(ii)(XIX) or section 2111. 

7 Any amount that is not paid to a State after the ap8 plication of the preceding sentence for a fiscal year, 

9 subject to the preceding sentence, first shall be avail10 able for making FamilyCare expansion incentive 

11 payments to other FamilyCare expansion States for 

12 that fiscal year and any remaining amount shall be 

13 transferred in accordance with paragraph (5). 

14 ‘‘(4) ADVANCE PAYMENT; RETROSPECTIVE AD15 JUSTMENT.—The Secretary may make FamilyCare 

16 expansion incentive payments under this subsection 

17 for each quarter of fiscal years 2005 and 2006 on 

18 the basis of advance estimates of expenditures sub19 mitted by the State and such other investigation as 

20 the Secretary may find necessary, and may reduce 

21 or increase the amount of such payments as nec22 essary to adjust for any overpayment or under23 payment for prior quarters. 

24 ‘‘(5) TRANSFER OF UNUSED FUNDS TO ADDI25 TIONAL ALLOTMENTS FOR FAMILYCARE.—Any 
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1 amounts that are not paid under this subsection for 

2 a fiscal year are hereby transferred and made avail3 able for allotment under section 2104(d) for the suc4 ceeding fiscal year.’’. 

5 (d) CONFORMING AMENDMENTS.—

6 (1) ELIGIBILITY CATEGORIES.—Section 

7 1905(a) of the Social Security Act (42 U.S.C. 

8 1396d(a)) is amended, in the matter before para9 graph (1)—

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

11 (xii); 

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

13 (xiii); and 

14 (C) by inserting after clause (xiii) the fol15 lowing: 

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

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

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

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

20 is amended by inserting ‘‘1902(a)(10)(A)(ii)(XIX),’’ 

21 after ‘‘1902(a)(10)(A)(ii)(XVIII),’’.

22 (3) CONFORMING AMENDMENT RELATING TO

23 NO WAITING PERIOD FOR PREGNANT WOMEN.—Sec24 tion 2102(b)(1)(B) of the Social Security Act (42 

25 U.S.C. 1397bb(b)(1)(B)) is amended—
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1 (A) by striking ‘‘, and’’ at the end of 

2 clause (i) and inserting a semicolon; 

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

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

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

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

7 (including a waiting period to carry out 

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

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

10 SEC. 4. AUTOMATIC ENROLLMENT OF CHILDREN BORN TO 

11 TITLE XXI PARENTS. 

12 (a) TITLE XXI.—Section 2102(b)(1) of the Social 

13 Security Act (42 U.S.C. 1397bb(b)(1)) is amended by 

14 adding at the end the following: 

15 ‘‘(C) AUTOMATIC ELIGIBILITY OF CHIL16 DREN BORN TO PARENTS OR PREGNANT

17 WOMEN.—Such eligibility standards shall pro18 vide for automatic coverage of a child born to 

19 an individual who is provided assistance under 

20 this title in the same manner as medical assist21 ance would be provided under section 

22 1902(e)(4) to a child described in such sec23 tion.’’. 

24 (b) CONFORMING AMENDMENT TO MEDICAID.—Sec25 tion 1902(e)(4) (42 U.S.C. 1396a(e)(4)) is amended in 
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1 the first sentence by striking ‘‘so long as the child is a 

2 member of the woman’s household and the woman remains 

3 (or would remain if pregnant) eligible for such assist4 ance’’. 

5 SEC. 5. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS 

6 UNDER THE MEDICAID PROGRAM AND TITLE 

7 XXI. 

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

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

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

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

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

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

14 under this title) to provide medical assistance under this 

15 title for aliens who are lawfully residing in the United 

16 States (including battered aliens described in section 

17 431(c) of the Personal Responsibility and Work Oppor18 tunity Reconciliation Act of 1996) and who are otherwise 

19 eligible for such assistance, within any of the following eli20 gibility categories: 

21 ‘‘(i) PREGNANT WOMEN.—Women during preg22 nancy (and during the 60-day period beginning on 

23 the last day of the pregnancy).
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•S 1843 IS 

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)(i) In the case of a State that has elected to pro12 vide medical assistance to a category of aliens under sub13 paragraph (A), no debt shall accrue under an affidavit of 

14 support 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 ‘‘(ii) The provisions of sections 401(a), 402(b), 403, 

19 and 421 of the Personal Responsibility and Work Oppor20 tunity Reconciliation Act of 1996 shall not apply to a 

21 State that makes an election under subparagraph (A).’’. 

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

23 Security Act (42 U.S.C. 1397gg(e)(1)) is amended by add24 ing at the end the following: 
27

•S 1843 IS 

1 ‘‘(E) Section 1903(v)(4) (relating to op2 tional coverage of categories of lawful resident 

3 alien pregnant women, children, and parents), 

4 but only with respect to an eligibility category 

5 under this title, if the same eligibility category 

6 has been elected under such section for pur7 poses of title XIX.’’. 

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 
28

•S 1843 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 SEC. 7. APPLICATION OF SIMPLIFIED TITLE XXI PROCE23 DURES UNDER THE MEDICAID PROGRAM. 

24 (a) APPLICATION UNDER MEDICAID.—
29

•S 1843 IS 

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

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

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

4 to paragraph (5)’’, after ‘‘Notwithstanding sub5 section (a)(17),’’; and 

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

7 ‘‘(5) With respect to determining the eligibility of in8 dividuals under 19 years of age (or such higher age as 

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

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

11 with respect to determining the eligibility of individuals 

12 for medical assistance under subsection 

13 (a)(10)(A)(i)(VIII) or (a)(10)(A)(ii)(XIX), notwith14 standing any other provision of this title, if the State has 

15 established a State child health plan under title XXI—

16 ‘‘(A) the State may not apply a resource stand17 ard; 

18 ‘‘(B) the State shall use the same simplified eli19 gibility form (including, if applicable, permitting ap20 plication other than in person) as the State uses 

21 under such State child health plan with respect to 

22 such individuals; 

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

24 determinations and redeterminations of eligibility 

25 using verification policies, forms, and frequency that 
30

•S 1843 IS 

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

2 frequency the State uses for such purposes under 

3 such State child health plan with respect to such in4 dividuals; and 

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

6 interview for purposes of initial eligibility determina7 tions and redeterminations unless the State requires 

8 such an interview for such purposes under such child 

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

10 (2) EFFECTIVE DATE.—The amendments made 

11 by paragraph (1) apply to determinations of eligi12 bility made on or after the date that is 1 year after 

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

14 not regulations implementing such amendments have 

15 been issued. 

16 (b) PRESUMPTIVE ELIGIBILITY.—

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

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

19 1a(b)(3)(A)(i)) is amended by inserting ‘‘a child care 

20 resource and referral agency,’’ after ‘‘a State or trib21 al child support enforcement agency,’’. 

22 (2) APPLICATION TO PRESUMPTIVE ELIGIBILITY

23 FOR PREGNANT WOMEN UNDER MEDICAID.—Section 

24 1920(b) of the Social Security Act (42 U.S.C. 

25 1396r–1(b)) is amended by adding at the end after
31

•S 1843 IS 

1 and below paragraph (2) the following flush sen2 tence: 

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

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

5 (3) APPLICATION UNDER TITLE XXI.—

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

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

8 1397gg(e)(1)) is amended to read as follows: 

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

10 presumptive eligibility).’’. 

11 (B) CONFORMING ELIMINATION OF RE12 SOURCE TEST.—Section 2102(b)(1)(A) of such 

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

14 (i) by striking ‘‘ and resources (includ15 ing any standards relating to spenddowns 

16 and disposition of resources)’’; and 

17 (ii) by adding at the end the fol18 lowing: ‘‘Effective 1 year after the date of 

19 the enactment of the FamilyCare Act of 

20 2003, such standards may not include the 

21 application of a resource standard or 

22 test.’’. 

23 (c) AUTOMATIC REASSESSMENT OF ELIGIBILITY FOR

24 TITLE XXI AND MEDICAID BENEFITS FOR CHILDREN

25 LOSING MEDICAID OR TITLE XXI ELIGIBILITY.—
32

•S 1843 IS 

1 (1) LOSS OF MEDICAID ELIGIBILITY.—Section 

2 1902(a) of the Social Security Act (42 U.S.C. 

3 1396a(a)) is amended—

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

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

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

7 following: 

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

9 State child health plan under title XXI, that before 

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

11 is discontinued under this title, a determination of 

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

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

14 be so eligible, the child (or parent) shall be auto15 matically enrolled in the program under such title 

16 without the need for a new application.’’. 

17 (2) LOSS OF TITLE XXI ELIGIBILITY AND CO18 ORDINATION WITH MEDICAID.—Section 2102(b) of 

19 the Social Security Act (42 U.S.C. 1397bb(b)) is 

20 amended—

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

22 subparagraphs (D) and (E) as subparagraphs 

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

24 subparagraph (C) the following: 
33

•S 1843 IS 

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

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

3 under this title, a determination of whether the 

4 child (or parent) is eligible for benefits under 

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

6 eligible, the child (or parent) is automatically 

7 enrolled in the program under such title with8 out the need for a new application;’’; 

9 (B) by redesignating paragraph (4) as 

10 paragraph (5); and 

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

12 following new paragraph: 

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

14 State shall coordinate the screening and enrollment 

15 of individuals under this title and under title XIX 

16 consistent with the following: 

17 ‘‘(A) Information that is collected under 

18 this title or under title XIX which is needed to 

19 make an eligibility determination under the 

20 other title shall be transmitted to the appro21 priate administering entity under such other 

22 title in a timely manner so that coverage is not 

23 delayed and families do not have to submit the 

24 same information twice. Families shall be pro25 vided the information they need to complete the 
34

•S 1843 IS 

1 application process for coverage under both ti2 tles and be given appropriate notice of any de3 terminations made on their applications for 

4 such coverage. 

5 ‘‘(B) If a State does not use a joint appli6 cation under this title and such title, the State 

7 shall—

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

9 or caretaker in writing and, if appropriate, 

10 orally, that a child has been found likely to 

11 be eligible under title XIX; 

12 ‘‘(ii) provide the family with an appli13 cation for medical assistance under such 

14 title and offer information about what (if 

15 any) further information, documentation, 

16 or other steps are needed to complete such 

17 application process; 

18 ‘‘(iii) offer assistance in completing 

19 such application process; and 

20 ‘‘(iv) promptly transmit the separate 

21 application under this title or the informa22 tion obtained through such application, 

23 and all other relevant information and doc24 umentation, including the results of the 

25 screening process, to the State agency 
35

•S 1843 IS 

1 under title XIX for a final determination 

2 on eligibility under such title. 

3 ‘‘(C) Applicants are notified in writing 

4 of—

5 ‘‘(i) benefits (including restrictions on 

6 cost-sharing) under title XIX; and 

7 ‘‘(ii) eligibility rules that prohibit chil8 dren who have been screened eligible for 

9 medical assistance under such title from 

10 being enrolled under this title, other than 

11 provisional temporary enrollment while a 

12 final eligibility determination is being made 

13 under such title. 

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

15 is different from the agency administering a 

16 State plan under title XIX, such agencies shall 

17 coordinate the screening and enrollment of ap18 plicants for such coverage under both titles. 

19 ‘‘(E) The coordination procedures estab20 lished between the program under this title and 

21 under title XIX shall apply not only to the ini22 tial eligibility determination of a family but also

23 to any renewals or redeterminations of such eli24 gibility.’’. 
36

•S 1843 IS 

1 (d) PROVISION OF MEDICAID AND CHIP APPLICA2 TIONS AND INFORMATION UNDER THE SCHOOL LUNCH

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

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

5 amended—

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

7 ‘‘(B)(i) Applications’’; and 

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

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

10 lunches that are distributed pursuant to clause (i) to par11 ents or guardians of children in attendance at schools par12 ticipating in the school lunch program under this Act shall 

13 also contain information on the availability of medical as14 sistance under title XIX of the Social Security Act (42 

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

16 assistance under title XXI of such Act, including informa17 tion on how to obtain an application for assistance under 

18 such programs. 

19 ‘‘(II) Information on the programs referred to in sub20 clause (I) shall be provided on a form separate from the 

21 application form for free and reduced price lunches under 

22 clause (i).’’. 

23 (e) 12-MONTHS CONTINUOUS ELIGIBILITY.—
37

•S 1843 IS 

1 (1) MEDICAID.—Section 1902(e)(12) of the So2 cial Security Act (42 U.S.C. 1396a(e)(12)) is 

3 amended—

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

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

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

7 State (not to exceed 19 years of age)’’ and in8 serting ‘‘19 years of age (or such higher age as 

9 the State has elected under subsection 

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

11 eligible for medical assistance as the parent of 

12 such a child’’; and 

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

14 period (not to exceed 12 months) ’’ and insert15 ing ‘‘the 12-month period beginning on the 

16 date’’. 

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

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

19 at the end the following: ‘‘Such methods shall pro20 vide 12-months continuous eligibility for children 

21 under this title in the same manner that section 

22 1902(e)(12) provides 12-months continuous eligi23 bility for children described in such section under 

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

25 1902(e)(12) to parents, such methods may provide 
38

•S 1843 IS 

1 12-months continuous eligibility for parents under 

2 this title in the same manner that such section pro3 vides 12-months continuous eligibility for parents 

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

5 SEC. 8. ELIMINATION OF 100 HOUR RULE AND OTHER 

6 AFDC-RELATED ELIGIBILITY RESTRICTIONS. 

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

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

9 amended by inserting ‘‘other than the requirement that 

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

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

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

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

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

15 in the matter before paragraph (1), in clause (ii), by strik16 ing ‘‘if such child is (or would, if needy, be) a dependent 

17 child under part A of title IV’’. 

18 SEC. 9. STATE GRANT PROGRAM FOR MARKET INNOVA19 TION. 

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

21 Human Services (in this section referred to as the ‘‘Sec22 retary’’) shall establish a program (in this section referred 

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

24 under this section to States to allow States to demonstrate 

25 the effectiveness of innovative ways to increase access to 
39

•S 1843 IS 

1 health insurance through market reforms and other inno2 vative means. Such innovative means may include any of 

3 the following: 

4 (1) Alternative group purchasing or pooling ar5 rangements, such as purchasing cooperatives for 

6 small businesses, reinsurance pools, or high risk 

7 pools. 

8 (2) Individual or small group market reforms. 

9 (3) Consumer education and outreach. 

10 (4) Subsidies to individuals, employers, or both, 

11 in obtaining health insurance. 

12 (b) SCOPE; DURATION.—The program shall be lim13 ited to not more than 10 States and to a total period of 

14 5 years, beginning on the date the first demonstration 

15 grant is made. 

16 (c) CONDITIONS FOR DEMONSTRATION GRANTS.—

17 (1) IN GENERAL.—The Secretary may not pro18 vide for a demonstration grant to a State under the 

19 program unless the Secretary finds that under the 

20 proposed demonstration grant—

21 (A) the State will provide for demonstrated 

22 increase of access for some portion of the exist23 ing uninsured population through a market in24 novation (other than merely through a financial
40

•S 1843 IS 

1 expansion of a program initiated before the 

2 date of the enactment of this Act); 

3 (B) the State will comply with applicable 

4 Federal laws; 

5 (C) the State will not discriminate among 

6 participants on the basis of any health status7 related factor (as defined in section 2791(d)(9) 

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

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

10 wishes to focus on populations that otherwise 

11 would not obtain health insurance because of 

12 such factors; and 

13 (D) the State will provide for such evalua14 tion, in coordination with the evaluation re15 quired under subsection (d), as the Secretary 

16 may specify. 

17 (2) APPLICATION.—The Secretary shall not 

18 provide a demonstration grant under the program to 

19 a State unless—

20 (A) the State submits to the Secretary 

21 such an application, in such a form and man22 ner, as the Secretary specifies; 

23 (B) the application includes information 

24 regarding how the demonstration grant will ad25 dress issues such as governance, targeted popu-
41

•S 1843 IS 

1 lation, expected cost, and the continuation after 

2 the completion of the demonstration grant pe3 riod; and 

4 (C) the Secretary determines that the dem5 onstration grant will be used consistent with 

6 this section. 

7 (3) FOCUS.—A demonstration grant proposal 

8 under this section need not cover all uninsured indi9 viduals in a State or all health care benefits with re10 spect to such individuals.

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

12 contract with an appropriate entity outside the Depart13 ment of Health and Human Services to conduct an overall 

14 evaluation of the program at the end of the program pe15 riod. Such evaluation shall include an analysis of improve16 ments in access, costs, quality of care, or choice of cov17 erage, under different demonstration grants. 

18 (e) OPTION TO PROVIDE FOR INITIAL PLANNING

19 GRANTS.—Notwithstanding the previous provisions of this 

20 section, under the program the Secretary may provide for 

21 a portion of the amounts appropriated under subsection 

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

23 State for initial planning grants to permit States to de24 velop demonstration grant proposals under the previous 

25 provisions of this section. 
42

•S 1843 IS 

1 (f) AUTHORIZATION OF APPROPRIATIONS.—There 

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

3 fiscal year beginning with fiscal year 2004 to carry out 

4 this section. Amounts appropriated under this subsection 

5 shall remain available until expended. 

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

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

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

9 seq.).

10 SEC. 10. LIMITATIONS ON CONFLICTS OF INTEREST. 

11 (a) LIMITATION ON CONFLICTS OF INTEREST IN

12 MARKETING ACTIVITIES.—

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

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

15 adding at the end the following: 

16 ‘‘(8) LIMITATION ON EXPENDITURES FOR MAR17 KETING ACTIVITIES.—Amounts expended by a State 

18 for the use of an administrative vendor in marketing 

19 health benefits coverage to low-income children 

20 under this title shall not be considered, for purposes 

21 of subsection (a)(2)(D), to be reasonable costs to ad22 minister the plan unless the following conditions are 

23 met with respect to the vendor: 

24 ‘‘(A) The vendor is independent of any en25 tity offering the coverage in the same area of 
43

•S 1843 IS 

1 the State in which the vendor is conducting 

2 marketing activities. 

3 ‘‘(B) No person who is an owner, em4 ployee, consultant, or has a contract with the 

5 vendor either has any direct or indirect finan6 cial interest with such an entity or has been ex7 cluded from participation in the program under 

8 this title or title XVIII or XIX or debarred by 

9 any Federal agency, or subject to a civil money 

10 penalty under this Act.’’. 

11 (b) PROHIBITION OF AFFILIATION WITH DEBARRED

12 INDIVIDUALS.—

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

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

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

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

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

18 following: 

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

20 an entity that receives payments under the plan un21 less—

22 ‘‘(A) no person with an ownership or con23 trol interest (as defined in section 1124(a)(3)) 

24 in the entity is a person that is debarred, sus25 pended, or otherwise excluded from partici-
44

•S 1843 IS 

1 pating in procurement or non-procurement ac2 tivities under the Federal Acquisition Regula3 tion; and 

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

5 employment, consulting, or other agreement for 

6 the provision of items or services that are mate7 rial to such entity’s obligations under the plan 

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

9 (2) TITLE XXI.—Section 2107(e)(1) of the So10 cial Security Act (42 U.S.C. 1397gg(e)(1)), as 

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

12 amended—

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

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

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

16 ‘‘(F) Section 1902(a)(67) (relating to pro17 hibition of affiliation with debarred individ18 uals).’’. 

19 SEC. 11. TITLE XXI FUNDING. 

20 (a) ELIMINATION OF ‘‘DIP’’ AND EXTENSION OF

21 FUNDING.—Section 2104(a) of the Social Security Act 

22 (42 U.S.C. 1397dd(a)) is amended—

23 (1) in paragraph (7), by striking 

24 ‘‘$3,150,000,000;’’ and inserting ‘‘$4,150,000,000; 

25 and’’; and
45

•S 1843 IS 

1 (2) by striking paragraphs (8) through (10) 

2 and inserting the following: 

3 ‘‘(8) for each of fiscal years 2005 through 

4 2011, $5,000,000,000.’’. 

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

6 this section shall be effective as if this section had been 

7 enacted on October 1, 2003. 

8 SEC. 12. DEMONSTRATION PROGRAMS TO IMPROVE MED9 ICAID AND TITLE XXI OUTREACH TO HOME10 LESS INDIVIDUALS AND FAMILIES. 

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

12 Human Services may award demonstration grants to not 

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

14 innovative programs that are designed to improve out15 reach to homeless individuals and families under the pro16 grams described in subsection (b) with respect to enroll17 ment of such individuals and families under such pro18 grams and the provision of services (and coordinating the 

19 provision of such services) under such programs. 

20 (b) PROGRAMS FOR HOMELESS DESCRIBED.—The 

21 programs described in this subsection are as follows: 

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

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

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

25 the Social Security Act (42 U.S.C. 1397aa et seq.). 
46

•S 1843 IS 

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

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

3 et seq.). 

4 (4) SAMHSA BLOCK GRANTS.—The program 

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

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

7 (5) FOOD STAMP PROGRAM.—The program 

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

9 et seq.). 

10 (6) WORKFORCE INVESTMENT ACT.—The pro11 gram under the Workforce Investment Act of 1999 

12 (29 U.S.C. 2801 et seq.).

13 (7) WELFARE-TO-WORK.—The welfare-to-work 

14 program under section 403(a)(5) of the Social Secu15 rity Act (42 U.S.C. 603(a)(5)). 

16 (8) OTHER PROGRAMS.—Other public and pri17 vate benefit programs that serve low-income individ18 uals. 

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

20 out this section, there is appropriated for fiscal year 2004, 

21 out of any funds in the Treasury not otherwise appro22 priated, $10,000,000, to remain available until expended. 

23 SEC. 13. ADDITIONAL TITLE XXI REVISIONS. 

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

25 FAMILIES WITH INCOME BELOW 150 PERCENT OF POV-
47

•S 1843 IS 

1 ERTY.—Section 2103(e)(3)(A) of the Social Security Act 

2 (42 U.S.C. 1397cc(e)(3)(A)) is amended—

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

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

5 (ii) and inserting ‘‘; and’’; and 

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

7 clause: 

8 ‘‘(iii) total annual aggregate cost9 sharing described in clauses (i) and (ii) 

10 with respect to all such targeted low-in11 come children in a family under this title 

12 that exceeds 2.5 percent of such family’s 

13 income for the year involved.’’. 

14 (b) REPORTING OF ENROLLMENT DATA.—

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

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

17 adding at the end the following: ‘‘In quarterly re18 ports on enrollment required under this paragraph, 

19 a State shall include information on the age, gender, 

20 race, ethnicity, service delivery system, and family 

21 income of individuals enrolled.’’. 

22 (2) ANNUAL REPORTS.—Section 

23 2108(b)(1)(B)(i) of such Act (42 U.S.C. 

24 1397hh(b)(1)(B)(i)) is amended by inserting ‘‘pri25 mary language of enrollees,’’ after ‘‘family income,’’. 
48

•S 1843 IS 

1 (c) EMPLOYER COVERAGE WAIVER CHANGES.—Sec2 tion 2105(c)(3) of such Act (42 U.S.C. 1397ee(c)(3)) is 

3 amended—

4 (1) by redesignating subparagraphs (A) and 

5 (B) as clauses (i) and (ii) and indenting appro6 priately; 

7 (2) by designating the matter beginning with 

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

9 with the heading ‘‘IN GENERAL’’ and indenting ap10 propriately; and 

11 (3) by adding at the end the following new sub12 paragraph: 

13 ‘‘(B) APPLICATION OF REQUIREMENTS.—

14 In carrying out subparagraph (A)—

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

16 minimum employer contribution level that 

17 is separate from the requirement of cost18 effectiveness under subparagraph (A)(i), 

19 but a State shall identify a reasonable min20 imum employer contribution level that is 

21 based on data demonstrating that such a 

22 level is representative to the employer23 sponsored insurance market in the State 

24 and shall monitor employer contribution 

25 levels over time to determine whether sub-
49

•S 1843 IS 

1 stitution is occurring and report the find2 ings in annual reports under section 

3 2108(a); 

4 ‘‘(ii) the State shall establish a wait5 ing period of at least 6 months without 

6 group health coverage, but may establish 

7 reasonable exceptions to such period and 

8 shall not apply such a waiting period to a 

9 child who is provided coverage under a 

10 group health plan under section 1906; 

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

12 shall provide satisfactory assurances that 

13 the minimum benefits and cost-sharing 

14 protections established under this title are 

15 provided, either through the coverage 

16 under subparagraph (A) or as a supple17 ment to such coverage; and 

18 ‘‘(iv) coverage under such subpara19 graph shall not be considered to violate 

20 clause (iii) because it does not comply with 

21 requirements relating to reviews of health 

22 service decisions if the enrollee involved is 

23 provided the option of being provided bene24 fits directly under this title.’’. 
50

•S 1843 IS 

1 SEC. 14. EFFECTIVE DATE. 

2 Except as otherwise provided in this Act, this Act and 

3 the amendments made by this Act take effect on October 

4 1, 2004, without regard to whether regulations imple5 menting this Act or such amendments have been issued.

Æ