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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 326 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 326

To amend title XXI of the Social Security Act to reauthorize the State 
 Children's Health Insurance Program through fiscal year 2013, and for 
                             other purposes

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            January 26, 2009

  Mr. McConnell (for himself, Mr. Kyl, Mr. Vitter, Mr. Chambliss, Mr. 
Bunning, Mr. Gregg, Mr. Coburn, Mr. Burr, Mr. Isakson, Mr. Graham, Mr. 
Inhofe, Mr. Cornyn, Mr. Brownback, Mr. Cochran, Mr. Ensign, Mr. Thune, 
  Mr. DeMint, Mr. Bennett, and Mr. Barrasso) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To amend title XXI of the Social Security Act to reauthorize the State 
 Children's Health Insurance Program through fiscal year 2013, and for 
                             other purposes

    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 ``Kids First Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Reauthorization through fiscal year 2013.
Sec. 3. Allotments for the 50 States and the District of Columbia based 
                            on expenditures and numbers of low-income 
                            children.
Sec. 4. Limitations on matching rates for populations other than low-
                            income children or pregnant women covered 
                            through a section 1115 waiver.
Sec. 5. Prohibition on new section 1115 waivers for coverage of adults 
                            other than pregnant women.
Sec. 6. Standardization of determination of family income for targeted 
                            low-income children under title XXI and 
                            optional targeted low-income children under 
                            title XIX.
Sec. 7. Grants for outreach and enrollment.
Sec. 8. Improved State option for offering premium assistance for 
                            coverage of children through private plans 
                            under SCHIP and Medicaid.
Sec. 9. Treatment of unborn children.
Sec. 10. 50 percent matching rate for all Medicaid administrative 
                            costs.
Sec. 11. Reduction in payments for Medicaid administrative costs to 
                            prevent duplication of such payments under 
                            TANF.
Sec. 12. Elimination of waiver of certain Medicaid provider tax 
                            provisions.
Sec. 13. Elimination of special payments for certain public hospitals.
Sec. 14. Effective date; coordination of funding for fiscal year 2009.

SEC. 2. REAUTHORIZATION THROUGH FISCAL YEAR 2013.

    (a) Increase in National Allotment.--Section 2104 of the Social 
Security Act (42 U.S.C. 1397dd(a)) is amended--
            (1) in subsection (a)--
                    (A) by striking ``and'' at the end of paragraph 
                (10);
                    (B) in paragraph (11)--
                            (i) by striking ``each of fiscal years 2008 
                        and 2009'' and inserting ``fiscal year 2008''; 
                        and
                            (ii) by striking the period at the end and 
                        inserting a semicolon; and
                    (C) by adding at the end the following new 
                paragraphs:
            ``(12) for fiscal year 2009, $7,780,000,000;
            ``(13) for fiscal year 2010, $8,044,000,000;
            ``(14) for fiscal year 2011, $8,568,000,000;
            ``(15) for fiscal year 2012, $9,032,000,000; and
            ``(16) for fiscal year 2013, $9,505,000,000.''; and
            (2) in subsection (c)(4)(B), by striking ``2009'' and 
        inserting ``2008, $62,000,000 for fiscal year 2009, $64,000,000 
        for fiscal year 2010, $68,000,000 for fiscal year 2011, 
        $72,000,000 for fiscal year 2012, and $75,000,000 for fiscal 
        year 2013''.
    (b) Repeal of Limitation on Availability of Funding for Fiscal 
Years 2008 and 2009.--Section 201 of the Medicare, Medicaid, and SCHIP 
Extension Act of 2007 (Public Law 110-173) is amended--
            (1) in subsection (a), by striking paragraph (2) and 
        redesignating paragraphs (3) and (4), as paragraphs (2) and (3) 
        respectively; and
            (2) in subsection (b), by striking paragraph (2).

SEC. 3. ALLOTMENTS FOR THE 50 STATES AND THE DISTRICT OF COLUMBIA BASED 
              ON EXPENDITURES AND NUMBERS OF LOW-INCOME CHILDREN.

    (a) In General.--Section 2104 of the Social Security Act (42 U.S.C. 
1397dd) is amended by adding at the end the following new subsection:
    ``(m) Determination of Allotments for the 50 States and the 
District of Columbia for Fiscal Years 2009 Through 2013.--
            ``(1) In general.--Notwithstanding the preceding provisions 
        of this subsection and subject to paragraph (3), the Secretary 
        shall allot to each subsection (b) State for each of fiscal 
        years 2009 through 2013, the amount determined for the fiscal 
        year that is equal to the product of--
                    ``(A) the amount available for allotment under 
                subsection (a) for the fiscal year, reduced by the 
                amount of allotments made under subsection (c) 
                (determined without regard to paragraph (4) thereof) 
                for the fiscal year; and
                    ``(B) the sum of the State allotment factors 
                determined under paragraph (2) with respect to the 
                State and weighted in accordance with subparagraph (B) 
                of that paragraph for the fiscal year.
            ``(2) State allotment factors.--
                    ``(A) In general.--For purposes of paragraph 
                (1)(B), the State allotment factors are the following:
                            ``(i) The ratio of the projected 
                        expenditures for targeted low-income children 
                        under the State child health plan and pregnant 
                        women under a waiver of such plan for the 
                        fiscal year to the sum of such projected 
                        expenditures for all States for the fiscal 
                        year, multiplied by the applicable percentage 
                        weight assigned under subparagraph (B).
                            ``(ii) The ratio of the number of low-
                        income children who have not attained age 19 
                        with no health insurance coverage in the State, 
                        as determined by the Secretary on the basis of 
                        the arithmetic average of the number of such 
                        children for the 3 most recent Annual Social 
                        and Economic Supplements to the Current 
                        Population Survey of the Bureau of the Census 
                        available before the beginning of the calendar 
                        year before such fiscal year begins, to the sum 
                        of the number of such children determined for 
                        all States for such fiscal year, multiplied by 
                        the applicable percentage weight assigned under 
                        subparagraph (B).
                            ``(iii) The ratio of the projected 
                        expenditures for targeted low-income children 
                        under the State child health plan and pregnant 
                        women under a waiver of such plan for the 
                        preceding fiscal year to the sum of such 
                        projected expenditures for all States for such 
                        preceding fiscal year, multiplied by the 
                        applicable percentage weight assigned under 
                        subparagraph (B).
                            ``(iv) The ratio of the actual expenditures 
                        for targeted low-income children under the 
                        State child health plan and pregnant women 
                        under a waiver of such plan for the second 
                        preceding fiscal year to the sum of such actual 
                        expenditures for all States for such second 
                        preceding fiscal year, multiplied by the 
                        applicable percentage weight assigned under 
                        subparagraph (B).
                    ``(B) Assignment of weights.--For each of fiscal 
                years 2009 through 2013, the following percentage 
                weights shall be applied to the ratios determined under 
                subparagraph (A) for each such fiscal year:
                            ``(i) 40 percent for the ratio determined 
                        under subparagraph (A)(i).
                            ``(ii) 5 percent for the ratio determined 
                        under subparagraph (A)(ii).
                            ``(iii) 50 percent for the ratio determined 
                        under subparagraph (A)(iii).
                            ``(iv) 5 percent for the ratio determined 
                        under subparagraph (A)(iv).
                    ``(C) Determination of projected and actual 
                expenditures.--For purposes of subparagraph (A):
                            ``(i) Projected expenditures.--The 
                        projected expenditures described in clauses (i) 
                        and (iii) of such subparagraph with respect to 
                        a fiscal year shall be determined on the basis 
                        of amounts reported by States to the Secretary 
                        on the May 15th submission of Form CMS-37 and 
                        Form CMS-21B submitted not later than June 30th 
                        of the fiscal year preceding such year.
                            ``(ii) Actual expenditures.--The actual 
                        expenditures described in clause (iv) of such 
                        subparagraph with respect to a second preceding 
                        fiscal year shall be determined on the basis of 
                        amounts reported by States to the Secretary on 
                        Form CMS-64 and Form CMS-21 submitted not later 
                        than November 30 of the preceding fiscal 
                        year.''.
    (b) 2-Year Availability of Allotments; Expenditures Counted Against 
Oldest Allotments.--Section 2104(e) of the Social Security Act (42 
U.S.C. 1397dd(e)) is amended to read as follows:
    ``(e) Availability of Amounts Allotted.--
            ``(1) In general.--Except as provided in the succeeding 
        paragraphs of this subsection, amounts allotted to a State 
        pursuant to this section--
                    ``(A) for each of fiscal years 1998 through 2008, 
                shall remain available for expenditure by the State 
                through the end of the second succeeding fiscal year; 
                and
                    ``(B) for each of fiscal years 2009 through 2013, 
                shall remain available for expenditure by the State 
                only through the end of the fiscal year succeeding the 
                fiscal year for which such amounts are allotted.
            ``(2) Elimination of redistribution of allotments not 
        expended within 3 years.--Notwithstanding subsection (f), 
        amounts allotted to a State under this section for fiscal years 
        beginning with fiscal year 2009 that remain unexpended as of 
        the end of the fiscal year succeeding the fiscal year for which 
        the amounts are allotted shall not be redistributed to other 
        States and shall revert to the Treasury on October 1 of the 
        third succeeding fiscal year.
            ``(3) Rule for counting expenditures against fiscal year 
        allotments.--Expenditures under the State child health plan 
        made on or after April 1, 2009, shall be counted against 
        allotments for the earliest fiscal year for which funds are 
        available for expenditure under this subsection.''.
    (c) Conforming Amendments.--
            (1) Section 2104(b)(1) of the Social Security Act (42 
        U.S.C. 1397dd(b)(1)) is amended by striking ``subsection (d)'' 
        and inserting ``the succeeding subsections of this section''.
            (2) Section 2104(f) of such Act (42 U.S.C. 1397dd(f)) is 
        amended by striking ``The'' and inserting ``Subject to 
        subsection (e)(2), the''.

SEC. 4. LIMITATIONS ON MATCHING RATES FOR POPULATIONS OTHER THAN LOW-
              INCOME CHILDREN OR PREGNANT WOMEN COVERED THROUGH A 
              SECTION 1115 WAIVER.

    (a) Limitation on Payments.--Section 2105(c) of the Social Security 
Act (42 U.S.C. 1397ee(c)) is amended by adding at the end the following 
new paragraph:
            ``(8) Limitations on matching rate for populations other 
        than targeted low-income children or pregnant women covered 
        through a section 1115 waiver.--For child health assistance or 
        health benefits coverage furnished in any fiscal year beginning 
        with fiscal year 2010:
                    ``(A) FMAP applied to payments for coverage of 
                children or pregnant women covered through a section 
                1115 waiver enrolled in the state child health plan on 
                the date of enactment of the kids first act and whose 
                gross family income is determined to exceed the income 
                eligibility level specified for a targeted low-income 
                child.--Notwithstanding subsections (b)(1)(B) and (d) 
                of section 2110, in the case of any individual 
                described in subsection (c) of section 105 of the Kids 
                First Act who the State elects to continue to provide 
                child health assistance for under the State child 
                health plan in accordance with the requirements of such 
                subsection, the Federal medical assistance percentage 
                (as determined under section 1905(b) without regard to 
                clause (4) of such section) shall be substituted for 
                the enhanced FMAP under subsection (a)(1) with respect 
                to such assistance.
                    ``(B) FMAP applied to payments only for nonpregnant 
                childless adults and parents and caretaker relatives 
                enrolled under a section 1115 waiver on the date of 
                enactment of the kids first act.--The Federal medical 
                assistance percentage (as determined under section 
                1905(b) without regard to clause (4) of such section) 
                shall be substituted for the enhanced FMAP under 
                subsection (a)(1) with respect to payments for child 
                health assistance or health benefits coverage provided 
                under the State child health plan for any of the 
                following:
                            ``(i) Parents or caretaker relatives 
                        enrolled under a waiver on the date of 
                        enactment of the kids first act.--A nonpregnant 
                        parent or a nonpregnant caretaker relative of a 
                        targeted low-income child who is enrolled in 
                        the State child health plan under a waiver, 
                        experimental, pilot, or demonstration project 
                        on the date of enactment of the Kids First Act 
                        and whose family income does not exceed the 
                        income eligibility applied under such waiver 
                        with respect to that population on such date.
                            ``(ii) Nonpregnant childless adults 
                        enrolled under a waiver on such date.--A 
                        nonpregnant childless adult enrolled in the 
                        State child health plan under a waiver, 
                        experimental, pilot, or demonstration project 
                        described in section 6102(c)(3) of the Deficit 
                        Reduction Act of 2005 (42 U.S.C. 1397gg note) 
                        on the date of enactment of the Kids First Act 
                        and whose family income does not exceed the 
                        income eligibility applied under such waiver 
                        with respect to that population on such date.
                            ``(iii) No replacement enrollees.--Nothing 
                        in clauses (i) or (ii) shall be construed as 
                        authorizing a State to provide child health 
                        assistance or health benefits coverage under a 
                        waiver described in either such clause to a 
                        nonpregnant parent or a nonpregnant caretaker 
                        relative of a targeted low-income child, or a 
                        nonpregnant childless adult, who is not 
                        enrolled under the waiver on the date of 
                        enactment of the Kids First Act.
                    ``(C) No federal payment for any new nonpregnant 
                adult enrollees or for such enrollees who no longer 
                satisfy income eligibility requirements.--Payment shall 
                not be made under this section for child health 
                assistance or other health benefits coverage provided 
                under the State child health plan or under a waiver 
                under section 1115 for any of the following:
                            ``(i) Parents or caretaker relatives under 
                        a section 1115 waiver approved after the date 
                        of enactment of the kids first act.--A 
                        nonpregnant parent or a nonpregnant caretaker 
                        relative of a targeted low-income child under a 
                        waiver, experimental, pilot, or demonstration 
                        project that is approved on or after the date 
                        of enactment of the Kids First Act.
                            ``(ii) Parents, caretaker relatives, and 
                        nonpregnant childless adults whose family 
                        income exceeds the income eligibility level 
                        specified under a section 1115 waiver approved 
                        prior to the kids first act.--Any nonpregnant 
                        parent or a nonpregnant caretaker relative of a 
                        targeted low-income child whose family income 
                        exceeds the income eligibility level referred 
                        to in subparagraph (B)(i), and any nonpregnant 
                        childless adult whose family income exceeds the 
                        income eligibility level referred to in 
                        subparagraph (B)(ii).
                            ``(iii) Nonpregnant childless adults, 
                        parents, or caretaker relatives not enrolled 
                        under a section 1115 waiver on the date of 
                        enactment of the kids first act.--Any 
                        nonpregnant parent or a nonpregnant caretaker 
                        relative of a targeted low-income child who is 
                        not enrolled in the State child health plan 
                        under a section 1115 waiver, experimental, 
                        pilot, or demonstration project referred to in 
                        subparagraph (B)(i) on the date of enactment of 
                        the Kids First Act, and any nonpregnant 
                        childless adult who is not enrolled in the 
                        State child health plan under a section 1115 
                        waiver, experimental, pilot, or demonstration 
                        project referred to in subparagraph (B)(ii)(I) 
                        on such date.
                    ``(D) Definition of caretaker relative.--In this 
                subparagraph, the term `caretaker relative' has the 
                meaning given that term for purposes of carrying out 
                section 1931.
                    ``(E) Rule of construction.--Nothing in this 
                paragraph shall be construed as implying that payments 
                for coverage of populations for which the Federal 
                medical assistance percentage (as so determined) is to 
                be substituted for the enhanced FMAP under subsection 
                (a)(1) in accordance with this paragraph are to be made 
                from funds other than the allotments determined for a 
                State under section 2104.''.
    (b) Conforming Amendment.--Section 2105(a)(1) of the Social 
Security Act (42 U.S.C. 1397dd(a)(1)) is amended, in the matter 
preceding subparagraph (A), by inserting ``or subsection (c)(8)'' after 
``subparagraph (B)''.

SEC. 5. PROHIBITION ON NEW SECTION 1115 WAIVERS FOR COVERAGE OF ADULTS 
              OTHER THAN PREGNANT WOMEN.

    (a) In General.--Section 2107(f) of the Social Security Act (42 
U.S.C. 1397gg(f)) is amended--
            (1) by striking ``, the Secretary'' and inserting ``:
            ``(1) The Secretary''; and
            (2) by adding at the end the following new paragraphs:
            ``(2) The Secretary may not approve, extend, renew, or 
        amend a waiver, experimental, pilot, or demonstration project 
        with respect to a State after the date of enactment of the Kids 
        First Act that would allow funds made available under this 
        title to be used to provide child health assistance or other 
        health benefits coverage for any other adult other than a 
        pregnant woman whose family income does not exceed the income 
        eligibility level specified for a targeted low-income child in 
        that State under a waiver or project approved as of such date.
            ``(3) The Secretary may not approve, extend, renew, or 
        amend a waiver, experimental, pilot, or demonstration project 
        with respect to a State after the date of enactment of the Kids 
        First Act that would waive or modify the requirements of 
        section 2105(c)(8).''.
    (b) Clarification of Authority for Coverage of Pregnant Women.--
Section 2106 of the Social Security Act (42 U.S.C. 1397ff) is amended 
by adding at the end the following new subsection:
    ``(f) No Authority To Cover Pregnant Women Through State Plan.--For 
purposes of this title, a State may provide assistance to a pregnant 
woman under the State child health plan only--
            ``(1) by virtue of a waiver under section 1115; or
            ``(2) through the application of sections 457.10, 
        457.350(b)(2), 457.622(c)(5), and 457.626(a)(3) of title 42, 
        Code of Federal Regulations (as in effect on the date of 
        enactment of the Kids First Act).''.
    (c) Assurance of Notice to Affected Enrollees.--The Secretary of 
Health and Human Services shall establish procedures to ensure that 
States provide adequate public notice for parents, caretaker relatives, 
and nonpregnant childless adults whose eligibility for child health 
assistance or health benefits coverage under a waiver under section 
1115 of the Social Security Act will be terminated as a result of the 
amendments made by subsection (a), and that States otherwise adhere to 
regulations of the Secretary relating to procedures for terminating 
waivers under section 1115 of the Social Security Act.

SEC. 6. STANDARDIZATION OF DETERMINATION OF FAMILY INCOME FOR TARGETED 
              LOW-INCOME CHILDREN UNDER TITLE XXI AND OPTIONAL TARGETED 
              LOW-INCOME CHILDREN UNDER TITLE XIX.

    (a) Eligibility Based on Gross Income.--
            (1) In general.--Section 2110 of the Social Security Act 
        (42 U.S.C. 1397jj) is amended--
                    (A) in subsection (b)(1)(A), by inserting ``in 
                accordance with subsection (d)'' after ``State plan''; 
                and
                    (B) by adding at the end the following new 
                subsection:
    ``(d) Standardization of Determination of Family Income.--A State 
shall determine family income for purposes of determining income 
eligibility for child health assistance or other health benefits 
coverage under the State child health plan (or under a waiver of such 
plan under section 1115) solely on the basis of the gross income (as 
defined by the Secretary) of the family.''.
            (2) Prohibition on waiver of requirements.--Section 2107(f) 
        (42 U.S.C. 1397gg(f)), as amended by section 5(a), is amended 
        by adding at the end the following new paragraph:
            ``(4) The Secretary may not approve a waiver, experimental, 
        pilot, or demonstration project with respect to a State after 
        the date of enactment of the Kids First Act that would waive or 
        modify the requirements of section 2110(d) (relating to 
        determining income eligibility on the basis of gross income) 
        and regulations promulgated to carry out such requirements.''.
    (b) Regulations.--Not later than 90 days after the date of 
enactment of this Act, the Secretary of Health and Human Services shall 
promulgate interim final regulations defining gross income for purposes 
of section 2110(d) of the Social Security Act, as added by subsection 
(a).
    (c) Application to Current Enrollees.--The interim final 
regulations promulgated under subsection (b) shall not be used to 
determine the income eligibility of any individual enrolled in a State 
child health plan under title XXI of the Social Security Act on the 
date of enactment of this Act before the date on which such eligibility 
of the individual is required to be redetermined under the plan as in 
effect on such date. In the case of any individual enrolled in such 
plan on such date who, solely as a result of the application of 
subsection (d) of section 2110 of the Social Security Act (as added by 
subsection (a)) and the regulations promulgated under subsection (b), 
is determined to be ineligible for child health assistance under the 
State child health plan, a State may elect, subject to substitution of 
the Federal medical assistance percentage for the enhanced FMAP under 
section 2105(c)(8)(A) of the Social Security Act (as added by section 
4(a)), to continue to provide the individual with such assistance for 
so long as the individual otherwise would be eligible for such 
assistance and the individual's family income, if determined under the 
income and resource standards and methodologies applicable under the 
State child health plan on September 30, 2008, would not exceed the 
income eligibility level applicable to the individual under the State 
child health plan.

SEC. 7. GRANTS FOR OUTREACH AND ENROLLMENT.

    (a) Grants.--Title XXI of the Social Security Act (42 U.S.C. 1397aa 
et seq.) is amended by adding at the end the following:

``SEC. 2111. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT.

    ``(a) Outreach and Enrollment Grants; National Campaign.--
            ``(1) In general.--From the amounts appropriated for a 
        fiscal year under subsection (f), subject to paragraph (2), the 
        Secretary shall award grants to eligible entities to conduct 
        outreach and enrollment efforts that are designed to increase 
        the enrollment and participation of eligible children under 
        this title and title XIX.
            ``(2) 10 percent set aside for national enrollment 
        campaign.--An amount equal to 10 percent of such amounts for 
        the fiscal year shall be used by the Secretary for expenditures 
        during the fiscal year to carry out a national enrollment 
        campaign in accordance with subsection (g).
    ``(b) Award of Grants.--
            ``(1) Priority for awarding.--
                    ``(A) In general.--In awarding grants under 
                subsection (a), the Secretary shall give priority to 
                eligible entities that--
                            ``(i) propose to target geographic areas 
                        with high rates of--
                                    ``(I) eligible but unenrolled 
                                children, including such children who 
                                reside in rural areas; or
                                    ``(II) racial and ethnic minorities 
                                and health disparity populations, 
                                including those proposals that address 
                                cultural and linguistic barriers to 
                                enrollment; and
                            ``(ii) submit the most demonstrable 
                        evidence required under paragraphs (1) and (2) 
                        of subsection (c).
                    ``(B) 10 percent set aside for outreach to indian 
                children.--An amount equal to 10 percent of the funds 
                appropriated under subsection (f) for a fiscal year 
                shall be used by the Secretary to award grants to 
                Indian Health Service providers and urban Indian 
                organizations receiving funds under title V of the 
                Indian Health Care Improvement Act (25 U.S.C. 1651 et 
                seq.) for outreach to, and enrollment of, children who 
                are Indians.
            ``(2) 2-year availability.--A grant awarded under this 
        section for a fiscal year shall remain available for 
        expenditure through the end of the succeeding fiscal year.
    ``(c) Application.--An eligible entity that desires to receive a 
grant under subsection (a) shall submit an application to the Secretary 
in such form and manner, and containing such information, as the 
Secretary may decide. Such application shall include--
            ``(1) evidence demonstrating that the entity includes 
        members who have access to, and credibility with, ethnic or 
        low-income populations in the communities in which activities 
        funded under the grant are to be conducted;
            ``(2) evidence demonstrating that the entity has the 
        ability to address barriers to enrollment, such as lack of 
        awareness of eligibility, stigma concerns and punitive fears 
        associated with receipt of benefits, and other cultural 
        barriers to applying for and receiving child health assistance 
        or medical assistance;
            ``(3) specific quality or outcomes performance measures to 
        evaluate the effectiveness of activities funded by a grant 
        awarded under this section; and
            ``(4) an assurance that the eligible entity shall--
                    ``(A) conduct an assessment of the effectiveness of 
                such activities against the performance measures;
                    ``(B) cooperate with the collection and reporting 
                of enrollment data and other information in order for 
                the Secretary to conduct such assessments; and
                    ``(C) in the case of an eligible entity that is not 
                the State, provide the State with enrollment data and 
                other information as necessary for the State to make 
                necessary projections of eligible children and pregnant 
                women.
    ``(d) Supplement, Not Supplant.--Federal funds awarded under this 
section shall be used to supplement, not supplant, non-Federal funds 
that are otherwise available for activities funded under this section.
    ``(e) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means 
        any of the following:
                    ``(A) A State with an approved child health plan 
                under this title.
                    ``(B) A local government.
                    ``(C) An Indian tribe or tribal consortium, a 
                tribal organization, an urban Indian organization 
                receiving funds under title V of the Indian Health Care 
                Improvement Act (25 U.S.C. 1651 et seq.), or an Indian 
                Health Service provider.
                    ``(D) A Federal health safety net organization.
                    ``(E) A State, national, local, or community-based 
                public or nonprofit private organization.
                    ``(F) A faith-based organization or consortia, to 
                the extent that a grant awarded to such an entity is 
                consistent with the requirements of section 1955 of the 
                Public Health Service Act (42 U.S.C. 300x-65) relating 
                to a grant award to non-governmental entities.
                    ``(G) An elementary or secondary school.
                    ``(H) A national, local, or community-based public 
                or nonprofit private organization, including 
                organizations that use community health workers or 
                community-based doula programs.
            ``(2) Federal health safety net organization.--The term 
        `Federal health safety net organization' means--
                    ``(A) a federally-qualified health center (as 
                defined in section 1905(l)(2)(B));
                    ``(B) a hospital defined as a disproportionate 
                share hospital for purposes of section 1923;
                    ``(C) a covered entity described in section 
                340B(a)(4) of the Public Health Service Act (42 U.S.C. 
                256b(a)(4)); and
                    ``(D) any other entity or consortium that serves 
                children under a federally funded program, including 
                the special supplemental nutrition program for women, 
                infants, and children (WIC) established under section 
                17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786), 
                the head start and early head start programs under the 
                Head Start Act (42 U.S.C. 9801 et seq.), the school 
                lunch program established under the Richard B. Russell 
                National School Lunch Act, and an elementary or 
                secondary school.
            ``(3) Indians; indian tribe; tribal organization; urban 
        indian organization.--The terms `Indian', `Indian tribe', 
        `tribal organization', and `urban Indian organization' have the 
        meanings given such terms in section 4 of the Indian Health 
        Care Improvement Act (25 U.S.C. 1603).
            ``(4) Community health worker.--The term `community health 
        worker' means an individual who promotes health or nutrition 
        within the community in which the individual resides--
                    ``(A) by serving as a liaison between communities 
                and health care agencies;
                    ``(B) by providing guidance and social assistance 
                to community residents;
                    ``(C) by enhancing community residents' ability to 
                effectively communicate with health care providers;
                    ``(D) by providing culturally and linguistically 
                appropriate health or nutrition education;
                    ``(E) by advocating for individual and community 
                health or nutrition needs; and
                    ``(F) by providing referral and followup services.
    ``(f) Appropriation.--
            ``(1) In general.--There is appropriated, out of any money 
        in the Treasury not otherwise appropriated, for the purpose of 
        awarding grants under this section--
                    ``(A) $100,000,000 for each of fiscal years 2009 
                and 2010;
                    ``(B) $75,000,000 for each of fiscal years 2011 and 
                2012; and
                    ``(C) $50,000,000 for fiscal year 2013.
            ``(2) Grants in addition to other amounts paid.--Amounts 
        appropriated and paid under the authority of this section shall 
        be in addition to amounts appropriated under section 2104 and 
        paid to States in accordance with section 2105, including with 
        respect to expenditures for outreach activities in accordance 
        with subsections (a)(1)(D)(iii) and (c)(2)(C) of that section.
    ``(g) National Enrollment Campaign.--From the amounts made 
available under subsection (a)(2) for a fiscal year, the Secretary 
shall develop and implement a national enrollment campaign to improve 
the enrollment of underserved child populations in the programs 
established under this title and title XIX. Such campaign may include--
            ``(1) the establishment of partnerships with the Secretary 
        of Education and the Secretary of Agriculture to develop 
        national campaigns to link the eligibility and enrollment 
        systems for the assistance programs each Secretary administers 
        that often serve the same children;
            ``(2) the integration of information about the programs 
        established under this title and title XIX in public health 
        awareness campaigns administered by the Secretary;
            ``(3) increased financial and technical support for 
        enrollment hotlines maintained by the Secretary to ensure that 
        all States participate in such hotlines;
            ``(4) the establishment of joint public awareness outreach 
        initiatives with the Secretary of Education and the Secretary 
        of Labor regarding the importance of health insurance to 
        building strong communities and the economy;
            ``(5) the development of special outreach materials for 
        Native Americans or for individuals with limited English 
        proficiency; and
            ``(6) such other outreach initiatives as the Secretary 
        determines would increase public awareness of the programs 
        under this title and title XIX.''.
    (b) Nonapplication of Administrative Expenditures Cap.--Section 
2105(c)(2) of the Social Security Act (42 U.S.C. 1397ee(c)(2)) is 
amended by adding at the end the following:
                    ``(C) Nonapplication to expenditures for outreach 
                and enrollment.--The limitation under subparagraph (A) 
                shall not apply with respect to expenditures for 
                outreach activities under section 2102(c)(1), or for 
                enrollment activities, for children eligible for child 
                health assistance under the State child health plan or 
                medical assistance under the State plan under title 
                XIX.''.

SEC. 8. IMPROVED STATE OPTION FOR OFFERING PREMIUM ASSISTANCE FOR 
              COVERAGE OF CHILDREN THROUGH PRIVATE PLANS UNDER SCHIP 
              AND MEDICAID.

    (a) In General.--Section 2105(c) of the Social Security Act (42 
U.S.C. 1397ee(c)), as amended by section 4(a) is amended by adding at 
the end the following:
            ``(9) Additional state option for offering premium 
        assistance.--
                    ``(A) In general.--Subject to the succeeding 
                provisions of this paragraph, a State may elect to 
                offer a premium assistance subsidy (as defined in 
                subparagraph (C)) for qualified coverage (as defined in 
                subparagraph (B)) to all targeted low-income children 
                who are eligible for child health assistance under the 
                plan and have access to such coverage in accordance 
                with the requirements of this paragraph.
                    ``(B) Qualified coverage.--In this paragraph, the 
                term `qualified coverage' means the following:
                            ``(i) Qualified employer sponsored 
                        coverage.--
                                    ``(I) In general.--A group health 
                                plan or health insurance coverage 
                                offered through an employer that is--
                                            ``(aa) substantially 
                                        equivalent to the benefits 
                                        coverage in a benchmark benefit 
                                        package described in section 
                                        2103(b) or benchmark-equivalent 
                                        coverage that meets the 
                                        requirements of section 
                                        2103(a)(2);
                                            ``(bb) made similarly 
                                        available to all of the 
                                        employer's employees and for 
                                        which the employer makes a 
                                        contribution to the premium 
                                        that is not less for employees 
                                        receiving a premium assistance 
                                        subsidy under any option 
                                        available under the State child 
                                        health plan under this title or 
                                        the State plan under title XIX 
                                        to provide such assistance than 
                                        the employer contribution 
                                        provided for all other 
                                        employees; and
                                            ``(cc) cost-effective, as 
                                        determined under subclause 
                                        (II).
                                    ``(II) Cost-effectiveness.--A group 
                                health plan or health insurance 
                                coverage offered through an employer 
                                shall be considered to be cost-
                                effective if--
                                            ``(aa) the marginal premium 
                                        cost to purchase family 
                                        coverage through the employer 
                                        is less than the State cost of 
                                        providing child health 
                                        assistance through the State 
                                        child health plan for all the 
                                        children in the family who are 
                                        targeted low-income children; 
                                        or
                                            ``(bb) the marginal premium 
                                        cost between individual 
                                        coverage and purchasing family 
                                        coverage through the employer 
                                        is not greater than 175 percent 
                                        of the cost to the State to 
                                        provide child health assistance 
                                        through the State child health 
                                        plan for a targeted low-income 
                                        child.
                            ``(ii) Qualified non-group coverage.--
                        Health insurance coverage offered to 
                        individuals in the non-group health insurance 
                        market that is substantially equivalent to the 
                        benefits coverage in a benchmark benefit 
                        package described in section 2103(b) or 
                        benchmark-equivalent coverage that meets the 
                        requirements of section 2103(a)(2).
                            ``(iii) High deductible health plan.--A 
                        high deductible health plan (as defined in 
                        section 223(c)(2) of the Internal Revenue Code 
                        of 1986) purchased through a health savings 
                        account (as defined under section 223(d) of 
                        such Code).
                    ``(C) Premium assistance subsidy.--
                            ``(i) In general.--In this paragraph, the 
                        term `premium assistance subsidy' means, with 
                        respect to a targeted low-income child, the 
                        amount equal to the difference between the 
                        employee contribution required for enrollment 
                        only of the employee under qualified employer 
                        sponsored coverage and the employee 
                        contribution required for enrollment of the 
                        employee and the child in such coverage, less 
                        any applicable premium cost-sharing applied 
                        under the State child health plan, subject to 
                        the annual aggregate cost-sharing limit applied 
                        under section 2103(e)(3)(B).
                            ``(ii) State payment option.--Subject to 
                        clause (iii), a State may provide a premium 
                        assistance subsidy directly to an employer or 
                        as reimbursement to an employee for out-of-
                        pocket expenditures.
                            ``(iii) Requirement for direct payment to 
                        employee.--A State shall not pay a premium 
                        assistance subsidy directly to the employee, 
                        unless the State has established procedures to 
                        ensure that the targeted low-income child on 
                        whose behalf such payments are made are 
                        actually enrolled in the qualified employer 
                        sponsored coverage.
                            ``(iv) Treatment as child health 
                        assistance.--Expenditures for the provision of 
                        premium assistance subsidies shall be 
                        considered child health assistance described in 
                        paragraph (1)(C) of subsection (a) for purposes 
                        of making payments under that subsection.
                            ``(v) State option to require acceptance of 
                        subsidy.--A State may condition the provision 
                        of child health assistance under the State 
                        child health plan for a targeted low-income 
                        child on the receipt of a premium assistance 
                        subsidy for enrollment in qualified employer 
                        sponsored coverage if the State determines the 
                        provision of such a subsidy to be more cost-
                        effective in accordance with subparagraph 
                        (B)(ii).
                            ``(vi) Not treated as income.--
                        Notwithstanding any other provision of law, a 
                        premium assistance subsidy provided in 
                        accordance with this paragraph shall not be 
                        treated as income to the child or the parent of 
                        the child for whom such subsidy is provided.
                    ``(D) No requirement to provide supplemental 
                coverage for benefits and additional cost-sharing 
                protection provided under the state child health 
                plan.--
                            ``(i) In general.--A State that elects the 
                        option to provide a premium assistance subsidy 
                        under this paragraph shall not be required to 
                        provide a targeted low-income child enrolled in 
                        qualified employer sponsored coverage with 
                        supplemental coverage for items or services 
                        that are not covered, or are only partially 
                        covered, under the qualified employer sponsored 
                        coverage or cost-sharing protection other than 
                        the protection required under section 
                        2103(e)(3)(B).
                            ``(ii) Notice of cost-sharing 
                        requirements.--A State shall provide a targeted 
                        low-income child or the parent of such a child 
                        (as appropriate) who is provided with a premium 
                        assistance subsidy in accordance with this 
                        paragraph with notice of the cost-sharing 
                        requirements and limitations imposed under the 
                        qualified employer sponsored coverage in which 
                        the child is enrolled upon the enrollment of 
                        the child in such coverage and annually 
                        thereafter.
                            ``(iii) Record keeping requirements.--A 
                        State may require a parent of a targeted low-
                        income child that is enrolled in qualified 
                        employer-sponsored coverage to bear the 
                        responsibility for keeping track of out-of-
                        pocket expenditures incurred for cost-sharing 
                        imposed under such coverage and to notify the 
                        State when the limit on such expenditures 
                        imposed under section 2103(e)(3)(B) has been 
                        reached for a year from the effective date of 
                        enrollment for such year.
                            ``(iv) State option for reimbursement.--A 
                        State may retroactively reimburse a parent of a 
                        targeted low-income child for out-of-pocket 
                        expenditures incurred after reaching the 5 
                        percent cost-sharing limitation imposed under 
                        section 2103(e)(3)(B) for a year.
                    ``(E) 6-month waiting period required.--A State 
                shall impose at least a 6-month waiting period from the 
                time an individual is enrolled in private health 
                insurance prior to the provision of a premium 
                assistance subsidy for a targeted low-income child in 
                accordance with this paragraph.
                    ``(F) Non application of waiting period for 
                enrollment in the state medicaid plan or the state 
                child health plan.--A targeted low-income child 
                provided a premium assistance subsidy in accordance 
                with this paragraph who loses eligibility for such 
                subsidy shall not be treated as having been enrolled in 
                private health insurance coverage for purposes of 
                applying any waiting period imposed under the State 
                child health plan or the State plan under title XIX for 
                the enrollment of the child under such plan.
                    ``(G) Assurance of special enrollment period under 
                group health plans in case of eligibility for premium 
                subsidy assistance.--No payment shall be made under 
                subsection (a) for amounts expended for the provision 
                of premium assistance subsidies under this paragraph 
                unless a State provides assurances to the Secretary 
                that the State has in effect laws requiring a group 
                health plan, a health insurance issuer offering group 
                health insurance coverage in connection with a group 
                health plan, and a self-funded health plan, to permit 
                an employee who is eligible, but not enrolled, for 
                coverage under the terms of the plan (or a child of 
                such an employee if the child is eligible, but not 
                enrolled, for coverage under such terms) to enroll for 
                coverage under the terms of the plan if the employee's 
                child becomes eligible for a premium assistance subsidy 
                under this paragraph.
                    ``(H) No effect on previously approved premium 
                assistance programs.--Nothing in this paragraph shall 
                be construed as limiting the authority of a State to 
                offer premium assistance under section 1906, a waiver 
                described in paragraph (2)(B) or (3), a waiver approved 
                under section 1115, or other authority in effect on 
                February 1, 2009.
                    ``(I) Notice of availability.--A State shall--
                            ``(i) include on any application or 
                        enrollment form for child health assistance a 
                        notice of the availability of premium 
                        assistance subsidies for the enrollment of 
                        targeted low-income children in qualified 
                        employer sponsored coverage;
                            ``(ii) provide, as part of the application 
                        and enrollment process under the State child 
                        health plan, information describing the 
                        availability of such subsidies and how to elect 
                        to obtain such a subsidy; and
                            ``(iii) establish such other procedures as 
                        the State determines necessary to ensure that 
                        parents are informed of the availability of 
                        such subsidies under the State child health 
                        plan.''.
    (b) Application to Medicaid.--Section 1906 of the Social Security 
Act (42 U.S.C. 1396e) is amended by inserting after subsection (c) the 
following:
    ``(d) The provisions of section 2105(c)(9) shall apply to a child 
who is eligible for medical assistance under the State plan in the same 
manner as such provisions apply to a targeted low-income child under a 
State child health plan under title XXI. Section 1902(a)(34) shall not 
apply to a child who is provided a premium assistance subsidy under the 
State plan in accordance with the preceding sentence.''.

SEC. 9. TREATMENT OF UNBORN CHILDREN.

    (a) Codification of Current Regulations.--Section 2110(c)(1) of the 
Social Security Act (42 U.S.C. 1397jj(c)(1)) is amended by striking the 
period at the end and inserting the following: ``, and includes, at the 
option of a State, an unborn child. For purposes of the previous 
sentence, the term `unborn child' means a member of the species Homo 
sapiens, at any stage of development, who is carried in the womb.''.
    (b) Clarifications Regarding Coverage of Mothers.--Section 2103 (42 
U.S.C. 1397cc) is amended by adding at the end the following new 
subsection:
    ``(g) Clarifications Regarding Authority To Provide Postpartum 
Services and Maternal Health Care.--Any State that provides child 
health assistance to an unborn child under the option described in 
section 2110(c)(1) may--
            ``(1) continue to provide such assistance to the mother, as 
        well as postpartum services, through the end of the month in 
        which the 60-day period (beginning on the last day of 
        pregnancy) ends; and
            ``(2) in the interest of the child to be born, have 
        flexibility in defining and providing services to benefit 
        either the mother or unborn child consistent with the health of 
        both.''.

SEC. 10. 50 PERCENT MATCHING RATE FOR ALL MEDICAID ADMINISTRATIVE 
              COSTS.

    Section 1903(a) of the Social Security Act (42 U.S.C. 1396b(a)) is 
amended--
            (1) by striking paragraph (2);
            (2) by redesignating paragraph (3)(E) as paragraph (2) and 
        re-locating and indenting it appropriately;
            (3) in paragraph (2), as so redesignated, by redesignating 
        clauses (i) and (ii) as subparagraphs (A) and (B), and 
        indenting them appropriately;
            (4) by striking paragraphs (3) and (4);
            (5) in paragraph (5), by striking ``which are attributable 
        to the offering, arranging, and furnishing'' and inserting 
        ``which are for the medical assistance costs of furnishing'';
            (6) by striking paragraph (6);
            (7) in paragraph (7), by striking ``subject to section 
        1919(g)(3)(B),''; and
            (8) by redesignating paragraphs (5) and (7) as paragraphs 
        (3) and (4), respectively.

SEC. 11. REDUCTION IN PAYMENTS FOR MEDICAID ADMINISTRATIVE COSTS TO 
              PREVENT DUPLICATION OF SUCH PAYMENTS UNDER TANF.

    Section 1903 of the Social Security Act (42 U.S.C. 1396b) is 
amended--
            (1) in subsection (a)(7), by striking ``section 
        1919(g)(3)(B)'' and inserting ``subsection (h)'';
            (2) in subsection (a)(2)(D) by inserting ``, subject to 
        subsection (g)(3)(C) of such section'' after ``as are 
        attributable to State activities under section 1919(g)''; and
            (3) by adding after subsection (g) the following new 
        subsection:
    ``(h) Reduction in Payments for Administrative Costs To Prevent 
Duplication of Payments Under Title IV.--Beginning with the calendar 
quarter commencing April 1, 2009, the Secretary shall reduce the amount 
paid to each State under subsection (a)(7) for each quarter by an 
amount equal to \1/4\ of the annualized amount determined for the 
Medicaid program under section 16(k)(2)(B) of the Food Stamp Act of 
1977 (7 U.S.C. 2025(k)(2)(B)).''.

SEC. 12. ELIMINATION OF WAIVER OF CERTAIN MEDICAID PROVIDER TAX 
              PROVISIONS.

    Effective October 1, 2009, subsection (c) of section 4722 of the 
Balanced Budget Act of 1997 (Public Law 105-33; 111 Stat. 515) is 
repealed.

SEC. 13. ELIMINATION OF SPECIAL PAYMENTS FOR CERTAIN PUBLIC HOSPITALS.

    Effective October 1, 2009, subsection (d) of section 701 of the 
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act 
of 2000, as enacted into law by section 1(a)(6) of Public Law 106-554 
(42 U.S.C. 1396r-4 note), is repealed.

SEC. 14. EFFECTIVE DATE; COORDINATION OF FUNDING FOR FISCAL YEAR 2009.

    (a) In General.--Unless otherwise specified, subject to subsection 
(b), the amendments made by this Act shall take effect on the date of 
enactment of this Act.
    (b) Delay if State Legislation Required.--In the case of a State 
child health plan under title XXI of the Social Security Act or a 
waiver of such plan under section 1115 of such Act which the Secretary 
of Health and Human Services determines requires State legislation 
(other than legislation appropriating funds) in order for the plan or 
waiver to meet the additional requirements imposed by the amendments 
made by this Act, the State child health plan or waiver shall not be 
regarded as failing to comply with the requirements of such title XXI 
solely on the basis of its failure to meet such additional requirements 
before the first day of the first calendar quarter beginning after the 
close of the first regular session of the State legislature that begins 
after the date of the enactment of this Act. For purposes of the 
previous sentence, in the case of a State that has a 2-year legislative 
session, each year of such session shall be deemed to be a separate 
regular session of the State legislature.
    (c) Coordination of Funding for Fiscal Year 2009.--Notwithstanding 
any other provision of law, insofar as funds have been appropriated 
under section 2104(a)(11) of the Social Security Act, as amended by 
section 201(a) of Public Law 110-173 and in effect on January 1, 2009, 
to provide allotments to States under title XXI of the Social Security 
Act for fiscal year 2009--
            (1) any amounts that are so appropriated that are not so 
        allotted and obligated before the date of the enactment of this 
        Act are rescinded; and
            (2) any amount provided for allotments under title XXI of 
        such Act to a State under the amendments made by this Act for 
        such fiscal year shall be reduced by the amount of such 
        appropriations so allotted and obligated before such date.
                                 <all>
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