I 

108TH CONGRESS 

2D SESSION H. R. 5218 

To increase health insurance coverage in America by requiring employers 

to offer health insurance coverage with greater government assistance 

and by expanding current safety net programs, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 5, 2004 

Mr. GEPHARDT introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on 

Ways and Means and Education and the Workforce, for a period to be 

subsequently determined by the Speaker, in each case for consideration 

of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To increase health insurance coverage in America by requiring employers to offer health insurance coverage with 

greater government assistance and by expanding current 

safety net programs, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Matt’s Health Insurance Plan Act of 2004’’. 
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1 (b) TABLE OF CONTENTS.—The table of contents of 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—REQUIREMENT FOR EMPLOYERS TO PROVIDE HEALTH 

INSURANCE COVERAGE 

Sec. 101. Requirement for employers to provide health insurance coverage. 

Sec. 102. Tax credits for employers to provide health insurance coverage. 

Sec. 103. Health care costs of nontaxpayer employers. 

TITLE II—EXPANSION OF EXISTING PUBLIC PROGRAMS 

Subtitle A—Access to Medicare Benefits for Individuals 55–to–65 Years of 

Age 

Sec. 201. Access to medicare benefits for individuals 55–to–65 years of age. 

Subtitle B—Refundable Tax Credit for Employee Costs of COBRA Coverage 

Sec. 211. Refundable tax credit for employee costs of COBRA coverage. 

Subtitle C—FamilyCare 

Sec. 221. Renaming of title XXI program. 

Sec. 222. Familycare coverage of parents and pregnant women under the medicaid program and title XXI. 

Sec. 223. Automatic enrollment of children born to title XXI parents. 

Sec. 224. Allowing States to simplify rules for families. 

Sec. 225. Revision and simplification of the transitional medical assistance program (TMA). 

Sec. 226. Limitations on conflicts of interest. 

Sec. 227. Increase in chip allotment for each of fiscal years 2002 through 

2004. 

Sec. 228. Demonstration programs to improve medicaid and chip outreach to 

homeless individuals and families. 

Sec. 229. Additional chip revisions. 

Sec. 230. Increased Federal reimbursement for language services under the 

medicaid program and title XXI. 

TITLE III—NATIONAL CENTER FOR EVIDENCE-BASED 

HEALTHCARE PRACTICES 

Sec. 301. Establishment of center. 
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1 TITLE I—REQUIREMENT FOR 

2 EMPLOYERS TO PROVIDE 

3 HEALTH INSURANCE COV4 ERAGE 

5 SEC. 101. REQUIREMENT FOR EMPLOYERS TO PROVIDE 

6 HEALTH INSURANCE COVERAGE. 

7 (a) IN GENERAL.—Each employers must offer health 

8 insurance coverage constituting qualified health care to 

9 employees and former employees of such employer and to 

10 their families. 

11 (b) INCORPORATION OF TERMS.—For purposes of 

12 subsection (a), the terms ‘‘employer’’, ‘‘qualified health 

13 care’’, ‘‘employee’’, ‘‘former employee’’, and ‘‘family’’ have 

14 the meanings given such terms for purposes of chapter 

15 101 of the Internal Revenue Code of 1986, as added by 

16 section 102(a). 

17 SEC. 102. TAX CREDITS FOR EMPLOYERS TO PROVIDE 

18 HEALTH INSURANCE COVERAGE. 

19 (a) IN GENERAL.—The Internal Revenue Code of 

20 1986 is amended by adding at the end the following new 

21 subtitle: 

22 ‘‘Subtitle L—Employment-Based 

23 Health Insurance Tax Credits 

‘‘CHAPTER 101—EMPLOYMENT-BASED HEALTH INSURANCE TAX 

CREDITS 
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1 ‘‘CHAPTER 101—EMPLOYMENT-BASED 

2 HEALTH INSURANCE TAX CREDITS 

‘‘Sec. 9901. Health care costs of employers. 

‘‘Sec. 9902. Health insurance costs of the self-employed. 

‘‘Sec. 9903. Health insurance costs of certain low wage workers. 

‘‘Sec. 9904. Special rules. 

3 ‘‘SEC. 9901. HEALTH CARE COSTS OF EMPLOYERS. 

4 ‘‘(a) CREDIT FOR EMPLOYERS PROVIDING INSUR5 ANCE PRE-EFFECTIVE DATE.— 

6 ‘‘(1) IN GENERAL.—In the case of a specified 

7 employer, there shall be allowed as a credit against 

8 the tax imposed by subtitle A an amount equal to 

9 60 percent of the amount paid or incurred by the 

10 employer during the taxable year to provide qualified 

11 health care (directly or otherwise) to the employees 

12 and former employees of such employer and to their 

13 families. 

14 ‘‘(2) SPECIFIED EMPLOYER.—For purposes of 

15 this subsection— 

16 ‘‘(A) IN GENERAL.—The term ‘specified 

17 employer’ means any employer who provided 

18 health care (directly or otherwise) to any em19 ployee or former employee of such employer 

20 under a group health plan (as defined in section 

21 5000(b)) during the 1-year period ending on 

22 January 1, 2005. 
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1 ‘‘(B) SUCCESSOR EMPLOYERS.—Except as 

2 provided in regulations, any entity and any 

3 predecessor or successor entities of such entity 

4 shall be treated as 1 entity. 

5 (b) CREDIT FOR OTHER EMPLOYERS.— 

6 (1) IN GENERAL.—In the case of any employer 

7 (other than an employer to which subsection (a) ap8 plies), there shall be allowed as a credit against the 

9 tax imposed by subtitle A an amount equal to the 

10 lesser of— 

11 ‘‘(A) 100 percent of the amount paid or in12 curred by the employer during the taxable year 

13 to provide qualified health care (directly or oth14 erwise) to the employees and former employees 

15 of such employer and to their families, or 

16 ‘‘(B) 60 percent of the total amounts paid 

17 or incurred (including any amounts paid or in18 curred by employees or former employees of the 

19 employer as premiums or other cost-sharing) 

20 during the taxable year to provide qualified 

21 health care (directly or otherwise) to the em22 ployees and former employees of such employer 

23 and to their families. 

24 ‘‘(c) QUALIFIED HEALTH CARE.—For purposes of 

25 this section, the term ‘qualified health care’ means health 
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1 care for which the employer bears 60 percent or more of 

2 the cost. 

3 ‘‘(d) CERTAIN EMPLOYMENT NOT TAKEN INTO AC4 COUNT.—For purposes this section, except as provided in 

5 regulations by the Secretary, an individual shall be treated 

6 as an employee only with respect to employment described 

7 in section 3121(b) (determined without regard to para8 graph (7) thereof). 

9 ‘‘SEC. 9902. HEALTH INSURANCE COSTS OF THE SELF-EM10 PLOYED. 

11 ‘‘(a) IN GENERAL.—In the case of an individual who 

12 is an employee within the meaning of section 401(c)(1), 

13 there shall be allowed as a credit against the tax imposed 

14 by subtitle A an amount equal to 60 percent of the amount 

15 paid by the taxpayer during the taxable year for insurance 

16 which constitutes medical care for the taxpayer, his 

17 spouse, and dependents. 

18 ‘‘(b) LIMITATIONS.— 

19 ‘‘(1) DOLLAR AMOUNT.—No credit shall be al20 lowed under subsection (a) to the extent that the 

21 amount of such credit exceeds the taxpayer’s earned 

22 income (within the meaning of section 401(c)) de23 rived by the taxpayer from the trade or business 

24 with respect to which the plan providing the medical 

25 care coverage is established. 
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1 ‘‘(2) OTHER COVERAGE.—Subsection (a) shall 

2 not apply to any taxpayer for any calendar month 

3 for which the taxpayer is eligible to participate in 

4 any subsidized health plan maintained by any em5 ployer of the taxpayer or of the spouse of the tax6 payer. The preceding sentence shall be applied sepa7 rately with respect to— 

8 ‘‘(A) plans which include coverage for 

9 qualified long-term care services (as defined in 

10 section 7702B(c)) or are qualified long-term 

11 care insurance contracts (as defined in section 

12 7702B(b)), and 

13 ‘‘(B) plans which do not include such cov14 erage and are not such contracts. 

15 ‘‘(3) LONG-TERM CARE PREMIUMS.—In the 

16 case of a qualified long-term care insurance contract 

17 (as defined in section 7702B(b)), only eligible long18 term care premiums (as defined in section 

19 213(d)(10) shall be taken into account under para20 graph (1). 

21 ‘‘SEC. 9903. HEALTH INSURANCE COSTS OF CERTAIN LOW 

22 WAGE WORKERS. 

23 ‘‘(a) IN GENERAL.—In the case of an individual, 

24 there shall be allowed as a credit against the tax imposed 

25 by subtitle A an amount equal to 25 percent of the amount 
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1 paid by the taxpayer for coverage of the taxpayer, his 

2 spouse, and dependents under any subsidized health plan 

3 maintained by any employer of the taxpayer or of the 

4 spouse of the taxpayer. 

5 ‘‘(b) LIMITATION.— 

6 ‘‘(1) IN GENERAL.—The amount of the credit 

7 allowed under subsection (a) shall be reduced (but 

8 not below zero) by an amount which bears the same 

9 ratio to the amount so determined as— 

10 ‘‘(A) the amount (if any) by which the tax11 payer’s adjusted gross income for the taxable 

12 year exceeds the threshold amount, bears to 

13 ‘‘(B) the threshold amount. 

14 ‘‘(2) THRESHOLD AMOUNT.—For purposes of 

15 this subsection, the term ‘threshold amount’ means 

16 the poverty line (as defined in section 673(2) of the 

17 Community Services Block Grant Act, including any 

18 revision required by such section) for a family of the 

19 size involved, as in effect at the close of the taxable 

20 year. 

21 ‘‘(c) SPECIAL RULES.— 

22 ‘‘(1) COORDINATION WITH SAVINGS AC23 COUNTS.—Amounts distributed from an Archer 

24 MSA (as defined in section 220(d)) or a health sav-
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1 ings account (as defined in section 223(d)) shall not 

2 be taken into account under subsection (a). 

3 ‘‘(2) DENIAL OF CREDIT TO DEPENDENTS.—No 

4 credit shall be allowed under this section to any indi5 vidual with respect to whom a deduction under sec6 tion 151 is allowable to another taxpayer for a tax7 able year beginning in the calendar year in which 

8 such individual’s taxable year begins. 

9 ‘‘(3) MARRIED COUPLES MUST FILE JOINT RE10 TURN.—If the taxpayer is married at the close of 

11 the taxable year, the credit shall be allowed under 

12 subsection (a) only if the taxpayer and his spouse 

13 file a joint return for the taxable year. Rules similar 

14 to the rules of paragraphs (3) and (4) of section 

15 21(e) shall apply for purposes of this paragraph. 

16 ‘‘SEC. 9904. SPECIAL RULES. 

17 ‘‘(a) CREDITS TREATED AS REFUNDABLE.—For pur18 poses of this title, the credits allowed under this chapter 

19 shall be treated as allowed under subpart C of part IV 

20 of subchapter A of chapter 1. 

21 ‘‘(b) COORDINATION WITH DEDUCTIONS.—Any 

22 amount which is taken into account under section 

23 9901(a)(1), 9901(b)(1) (determined without regard to sec24 tion 9901(b)(1)(B)), 9902(a), or 9903(a) shall not be 
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1 taken into account in determining any deduction under 

2 subtitle A. 

3 ‘‘(c) REGULATIONS.—The Secretary may prescribe 

4 such regulations and other guidance as may be necessary 

5 or appropriate to carry out this chapter.’’. 

6 (b) CONFORMING AMENDMENTS.— 

7 (1) Section 162 of the Internal Revenue Code 

8 of 1986 is amended by striking subsection (l). 

9 (2) Paragraph (2) of section 1324(b) of title 

10 31, United States Code, is amended by inserting ‘‘or 

11 chapter 101’’ after ‘‘section 35’’. 

12 (3) The table of subtitles of the Internal Rev13 enue Code of 1986 is amended by adding at the end 

14 the following new item: 

‘‘Subtitle L—Employment-based health insurance tax credits.’’. 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this subsection shall apply to taxable years beginning after 

17 December 31, 2004. 

18 SEC. 103. HEALTH CARE COSTS OF NONTAXPAYER EMPLOY19 ERS. 

20 (a) PAYMENTS BY SECRETARY OF THE TREASURY.— 

21 The Secretary of the Treasury shall establish a program 

22 under which the Secretary shall make payments to quali23 fied nontaxpayer employers in amounts equal to the cred24 its that such employers would have been allowed under 

25 section 9901 of the Internal Revenue Code of 1986 if such 
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1 employers were subject to, and not exempt from, taxation 

2 under subtitle A of such Code. 

3 (b) QUALIFIED NONTAXPAYER EMPLOYERS.—For 

4 purposes of this section, the term ‘‘qualified nontaxpayer 

5 employer’’ means any employer which is— 

6 (A) a State, political subdivision of a 

7 State, or any agency or instrumentality of a 

8 State or political subdivision of a State, 

9 (B) any Indian tribal government (as de10 fined in section 7701(a)(40) of the Internal 

11 Revenue Code of 1986), subdivision of an In12 dian tribal government (determined in accord13 ance with section 7871(d) of such Code), or an 

14 agency or instrumentality of an Indian tribal 

15 government or subdivision thereof, or 

16 (C) any other organization (other than a 

17 governmental or tribal unit) exempt from tax 

18 under subtitle A of the Internal Revenue Code 

19 of 1986. 
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1 TITLE II—EXPANSION OF 

2 EXISTING PUBLIC PROGRAMS 

3 Subtitle A—Access to Medicare Benefits for Individuals 

4 55-to-65 Years of Age 

5 SEC. 201. ACCESS TO MEDICARE BENEFITS FOR INDIVID6 UALS 55-TO-65 YEARS OF AGE. 

7 (a) IN GENERAL.—Title XVIII of the Social Security 

8 Act, as amended by section 101(a) of the Medicare Pre9 scription Drug, Improvement, and Modernization Act of 

10 2003 (Public Law 108–173), is amended— 

11 (1) by redesignating part E as part F; and 

12 (2) by inserting after part D the following new 

13 part: 

14 ‘‘PART E—PURCHASE OF MEDICARE BENEFITS 

15 BY CERTAIN INDIVIDUALS 55-TO-65 YEARS OF 

16 AGE 

17 ‘‘SEC. 1860E–1. PROGRAM BENEFITS; ELIGIBILITY. 

18 ‘‘(a) ENTITLEMENT TO MEDICARE BENEFITS FOR

19 ENROLLED INDIVIDUALS.— 

20 ‘‘(1) IN GENERAL.—An individual enrolled 

21 under this part is entitled to the same benefits 

22 under this title as an individual entitled to benefits 

23 or enrolled under any part of this title. 

24 ‘‘(2) DEFINITIONS.—For purposes of this part: 
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1 ‘‘(A) FEDERAL OR STATE COBRA CON2 TINUATION PROVISION.—The term ‘Federal or 

3 State COBRA continuation provision’ has the 

4 meaning given the term ‘COBRA continuation 

5 provision’ in section 2791(d)(4) of the Public 

6 Health Service Act and includes a comparable 

7 State program, as determined by the Secretary. 

8 ‘‘(B) FEDERAL HEALTH INSURANCE PRO9 GRAM DEFINED.—The term ‘Federal health in10 surance program’ means any of the following: 

11 ‘‘(i) MEDICARE.—Any part of this 

12 title (other than by reason of this part). 

13 ‘‘(ii) MEDICAID.—A State plan under 

14 title XIX. 

15 ‘‘(iii) FEHBP.—The Federal employ16 ees health benefit program under chapter 

17 89 of title 5, United States Code. 

18 ‘‘(iv) TRICARE.—The TRICARE 

19 program (as defined in section 1072(7) of 

20 title 10, United States Code). 

21 ‘‘(v) ACTIVE DUTY MILITARY.—Health 

22 benefits under title 10, United States 

23 Code, to an individual as a member of the 

24 uniformed services of the United States. 
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1 ‘‘(C) GROUP HEALTH PLAN.—The term 

2 ‘group health plan’ has the meaning given such 

3 term in section 2791(a)(1) of the Public Health 

4 Service Act. 

5 ‘‘(b) ELIGIBILITY OF INDIVIDUALS AGE 55-TO-65 

6 YEARS OF AGE.— 

7 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

8 an individual who meets the following requirements 

9 with respect to a month is eligible to enroll under 

10 this part with respect to such month: 

11 ‘‘(A) AGE.—As of the last day of the 

12 month, the individual has attained 55 years of 

13 age, but has not attained 65 years of age. 

14 ‘‘(B) MEDICARE ELIGIBILITY (BUT FOR

15 AGE).—The individual would be eligible for ben16 efits under part A or part B for the month if 

17 the individual were 65 years of age. 

18 ‘‘(C) NOT ELIGIBLE FOR COVERAGE

19 UNDER GROUP HEALTH PLANS OR FEDERAL

20 HEALTH INSURANCE PROGRAMS.—The indi21 vidual is not eligible for benefits or coverage 

22 under a Federal health insurance program (as 

23 defined in subsection (a)(2)(B)) or under a 

24 group health plan (other than such eligibility 

25 merely through a Federal or State COBRA con-
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1 tinuation provision) as of the last day of the 

2 month involved. 

3 ‘‘(2) LIMITATION ON ELIGIBILITY IF TERMI4 NATED ENROLLMENT.—If an individual described in 

5 paragraph (1) enrolls under this part and coverage 

6 of the individual is terminated under section 1860E– 

7 2(d) (other than because of age), the individual is 

8 not again eligible to enroll under this subsection un9 less the following requirements are met: 

10 ‘‘(A) NEW COVERAGE UNDER GROUP

11 HEALTH PLAN OR FEDERAL HEALTH INSUR12 ANCE PROGRAM.—After the date of termination 

13 of coverage under such section, the individual 

14 obtains coverage under a group health plan or 

15 under a Federal health insurance program. 

16 ‘‘(B) SUBSEQUENT LOSS OF NEW COV17 ERAGE.—The individual subsequently loses eli18 gibility for the coverage described in subpara19 graph (A) without regard to whether the indi20 vidual has exhausted any eligibility the indi21 vidual may subsequently have for coverage 

22 under a Federal or State COBRA continuation 

23 provision. 

24 ‘‘(3) CHANGE IN HEALTH PLAN ELIGIBILITY

25 DOES NOT AFFECT COVERAGE.—In the case of an 
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1 individual who is eligible for and enrolls under this 

2 part under this subsection, the individual’s continued 

3 entitlement to benefits under this part shall not be 

4 affected by the individual’s subsequent eligibility for 

5 benefits or coverage described in paragraph (1)(C), 

6 or entitlement to such benefits or coverage. 

7 ‘‘SEC. 1860E–2. ENROLLMENT PROCESS; COVERAGE. 

8 ‘‘(a) IN GENERAL.—An individual may enroll in the 

9 program established under this part only in such manner 

10 and form as may be prescribed by regulations, and only 

11 during an enrollment period prescribed by the Secretary 

12 consistent with the provisions of this section. Such regula13 tions shall provide a process under which individuals eligi14 ble to enroll as of a month are permitted to pre-enroll dur15 ing a prior month within an enrollment period described 

16 in subsection (b). 

17 ‘‘(b) ENROLLMENT PERIODS.— 

18 ‘‘(1) INDIVIDUALS 55-TO-65 YEARS OF AGE.—In 

19 the case of individuals eligible to enroll under this 

20 part under section 1860E–1(b)— 

21 ‘‘(A) INITIAL ENROLLMENT PERIOD.—If 

22 the individual is eligible to enroll under such 

23 section for January 2005, the enrollment period 

24 shall begin on November 1, 2004, and shall end 

25 on February 28, 2005. Any such enrollment be-
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1 fore January 1, 2005, is conditioned upon com2 pliance with the conditions of eligibility for Jan3 uary 2005. 

4 ‘‘(B) SUBSEQUENT PERIODS.—If the indi5 vidual is eligible to enroll under such section for 

6 a month after January 2005, the enrollment pe7 riod shall begin on the first day of the second 

8 month before the month in which the individual 

9 first is eligible to so enroll and shall end four 

10 months later. Any such enrollment before the 

11 first day of the third month of such enrollment 

12 period is conditioned upon compliance with the 

13 conditions of eligibility for such third month. 

14 ‘‘(2) AUTHORITY TO CORRECT FOR GOVERN15 MENT ERRORS.—The provisions of section 1837(h) 

16 apply with respect to enrollment under this part in 

17 the same manner as they apply to enrollment under 

18 part B. 

19 ‘‘(c) DATE COVERAGE BEGINS.— 

20 ‘‘(1) IN GENERAL.—The period during which 

21 an individual is entitled to benefits under this part 

22 shall begin as follows, but in no case earlier than 

23 January 1, 2005: 

24 ‘‘(A) In the case of an individual who en25 rolls (including pre-enrolls) before the month in 
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1 which the individual satisfies eligibility for en2 rollment under section 1860E–1, the first day 

3 of such month of eligibility. 

4 ‘‘(B) In the case of an individual who en5 rolls during or after the month in which the in6 dividual first satisfies eligibility for enrollment 

7 under such section, the first day of the fol8 lowing month. 

9 ‘‘(2) AUTHORITY TO PROVIDE FOR PARTIAL

10 MONTHS OF COVERAGE.—Under regulations, the 

11 Secretary may, in the Secretary’s discretion, provide 

12 for coverage periods that include portions of a 

13 month in order to avoid lapses of coverage. 

14 ‘‘(3) LIMITATION ON PAYMENTS.—No payments 

15 may be made under this title with respect to the ex16 penses of an individual enrolled under this part un17 less such expenses were incurred by such individual 

18 during a period which, with respect to the individual, 

19 is a coverage period under this section. 

20 ‘‘(d) TERMINATION OF COVERAGE.— 

21 ‘‘(1) IN GENERAL.—An individual’s coverage 

22 period under this part shall continue until the indi23 vidual’s enrollment has been terminated at the ear24 liest of the following: 

25 ‘‘(A) GENERAL PROVISIONS.— 
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1 ‘‘(i) NOTICE.—The individual files no2 tice (in a form and manner prescribed by 

3 the Secretary) that the individual no 

4 longer wishes to participate in the insur5 ance program under this part. 

6 ‘‘(ii) NONPAYMENT OF PREMIUMS.— 

7 The individual fails to make payment of 

8 premiums required for enrollment under 

9 this part. 

10 ‘‘(iii) MEDICARE ELIGIBILITY.—The 

11 individual becomes entitled to benefits or 

12 enrolled under any other part of this title 

13 (other than by reason of this part). 

14 ‘‘(B) TERMINATION BASED ON AGE.—The 

15 individual attains 65 years of age. 

16 ‘‘(2) EFFECTIVE DATE OF TERMINATION.— 

17 ‘‘(A) NOTICE.—The termination of a cov18 erage period under paragraph (1)(A)(i) shall 

19 take effect at the close of the month following 

20 for which the notice is filed. 

21 ‘‘(B) NONPAYMENT OF PREMIUM.—The 

22 termination of a coverage period under para23 graph (1)(A)(ii) shall take effect on a date de24 termined under regulations, which may be de25 termined so as to provide a grace period in 
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1 which overdue premiums may be paid and cov2 erage continued. The grace period determined 

3 under the preceding sentence shall not exceed 

4 60 days; except that it may be extended for an 

5 additional 30 days in any case where the Sec6 retary determines that there was good cause for 

7 failure to pay the overdue premiums within 

8 such 60-day period. 

9 ‘‘(C) AGE OR MEDICARE ELIGIBILITY.— 

10 The termination of a coverage period under 

11 paragraph (1)(A)(iii) or (1)(B) shall take effect 

12 as of the first day of the month in which the 

13 individual attains 65 years of age or becomes 

14 entitled to benefits or enrolled in any other part 

15 of this title (other than by reason of this part). 

16 ‘‘SEC. 1860E–3. PREMIUMS. 

17 ‘‘(a) AMOUNT OF MONTHLY PREMIUMS.—The Sec18 retary shall, during September of each year (beginning 

19 with 2004), determine a monthly premium for individuals 

55 years of age or older, equal to 1 20 ⁄12 of the annual pre21 mium computed under subsection (b)(2), which shall apply 

22 with respect to coverage provided under this title for any 

23 month in the succeeding year. 

24 ‘‘(b) ANNUAL PREMIUM.— 
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1 ‘‘(1) NATIONAL, PER CAPITA AVERAGE.—The 

2 Secretary shall estimate the average, annual per 

3 capita amount that would be payable under this title 

4 with respect to individuals residing in the United 

5 States who meet the requirement of section 1860E– 

6 1(b)(1)(A) as if all such individuals were eligible for 

7 (and enrolled) under this title during the entire year 

8 (and assuming that section 1862(b)(2)(A)(i) did not 

9 apply). 

10 ‘‘(2) ANNUAL PREMIUM.—The annual premium 

11 under this subsection for months in a year is equal 

12 to the average, annual per capita amount estimated 

13 under paragraph (1) for the year. 

14 ‘‘SEC. 1860E–4. PAYMENT OF PREMIUMS. 

15 ‘‘(a) PAYMENT OF MONTHLY PREMIUM.— 

16 ‘‘(1) IN GENERAL.—The Secretary shall provide 

17 for payment and collection of the monthly premium, 

18 determined under section 1860E–3(a) for the age of 

19 the individual involved, in the same manner as for 

20 payment of monthly premiums under section 1840, 

21 except that, for purposes of applying this section, 

22 any reference in such section to the Federal Supple23 mentary Medical Insurance Trust Fund is deemed a 

24 reference to the Trust Fund established under sec25 tion 1860E–6. 
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1 ‘‘(2) PERIOD OF PAYMENT.—In the case of an 

2 individual who participates in the program estab3 lished by this title, the monthly premium shall be 

4 payable for the period commencing with the first 

5 month of the individual’s coverage period and ending 

6 with the month in which the individual’s coverage 

7 under this title terminates. 

8 ‘‘(b) APPLICATION OF CERTAIN PROVISIONS.—The 

9 provisions of section 1840 (other than subsection (h)) 

10 shall apply to premiums collected under this section in the 

11 same manner as they apply to premiums collected under 

12 part B, except that any reference in such section to the 

13 Federal Supplementary Medical Insurance Trust Fund is 

14 deemed a reference to the Trust Fund established under 

15 section 1860E–6. 

16 ‘‘SEC. 1860E–5. PROVISIONS RELATING TO EMPLOYMENT17 BASED RETIREE HEALTH COVERAGE. 

18 ‘‘(a) IN GENERAL.—In the case of an individual who 

19 would be eligible to enroll under this part but for the pro20 vision of employment-based retiree health coverage by an 

21 employer to the individual, notwithstanding the limitation 

22 under section 1860E–1(b)(1)(C), the individual is eligible 

23 to enroll under this part. 

24 ‘‘(b) MAINTENANCE OF EFFORT.—In the case of an 

25 employer that offers employment-based retiree health cov-
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1 erage to an individual who enrolls under this part, upon 

2 enrollment of the individual under this part, the employer 

3 may modify such coverage to provide for the following ben4 efits: 

5 ‘‘(1) Payment is made by the employer under 

6 such coverage for items and services for which pay7 ment may not be made under this title. 

8 ‘‘(2) Payment is made by the employer spon9 soring such coverage of 25 percent of the monthly 

10 premium under section 1860E–3 applicable to the 

11 individual after enrollment under this part. 

12 ‘‘(c) EMPLOYMENT-BASED RETIREE HEALTH COV13 ERAGE.—The term ‘employment-based retiree health cov14 erage’ has the meaning given that term in section 1860D– 

15 22(c)(1), except that, fur purposes of this part, any ref16 erence in such section to ‘part D’ is deemed to be a ref17 erence to ‘part E’. 

18 ‘‘SEC. 1860E–6. MEDICARE EARLY ACCESS TRUST FUND. 

19 ‘‘(a) ESTABLISHMENT OF TRUST FUND.— 

20 ‘‘(1) IN GENERAL.—There is hereby created on 

21 the books of the Treasury of the United States a 

22 trust fund to be known as the ‘Medicare Early Ac23 cess Trust Fund’ (in this section referred to as the 

24 ‘Trust Fund’). The Trust Fund shall consist of such 

25 gifts and bequests as may be made as provided in 
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1 section 201(i)(1) and such amounts as may be de2 posited in, or appropriated to, such fund as provided 

3 in this title. 

4 ‘‘(2) PREMIUMS.—Premiums collected under 

5 section 1860E–3 and payable under section 1860E– 

6 5(a)(2) shall be transferred to the Trust Fund. 

7 ‘‘(b) INCORPORATION OF PROVISIONS.— 

8 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

9 subsections (b) through (i) of section 1841 shall 

10 apply with respect to the Trust Fund and this title 

11 in the same manner as they apply with respect to 

12 the Federal Supplementary Medical Insurance Trust 

13 Fund and part B, respectively. 

14 ‘‘(2) MISCELLANEOUS REFERENCES.—In apply15 ing provisions of section 1841 under paragraph 

16 (1)— 

17 ‘‘(A) any reference in such section to ‘this 

18 part’ is construed to refer to this part E; 

19 ‘‘(B) any reference in section 1841(h) to 

20 section 1840(d) and in section 1841(i) to sec21 tions 1840(b)(1) and 1842(g) are deemed ref22 erences to comparable authority exercised under 

23 this part; and 

24 ‘‘(C) payments may be made under section 

25 1841(g) to the Trust Funds under sections 
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1 1817 and 1841 as reimbursement to such funds 

2 for payments they made for benefits provided 

3 under this part. 

4 ‘‘SEC. 1860E–7. OVERSIGHT AND ACCOUNTABILITY. 

5 ‘‘(a) THROUGH ANNUAL REPORTS OF TRUSTEES.— 

6 The Board of Trustees of the Medicare Early Access 

7 Trust Fund under section 1860E–6(b)(1) shall report on 

8 an annual basis to Congress concerning the status of the 

9 Trust Fund and the need for adjustments in the program 

10 under this part to maintain financial solvency of the pro11 gram under this part. 

12 ‘‘(b) PERIODIC GAO REPORTS.—The Comptroller 

13 General of the United States shall periodically submit to 

14 Congress reports on the adequacy of the financing of cov15 erage provided under this part. The Comptroller General 

16 shall include in such report such recommendations for ad17 justments in such financing and coverage as the Comp18 troller General deems appropriate in order to maintain fi19 nancial solvency of the program under this part. 

20 ‘‘SEC. 1860E–8. ADMINISTRATION AND MISCELLANEOUS. 

21 ‘‘(a) TREATMENT FOR PURPOSES OF TITLE.—Ex22 cept as otherwise provided in this part— 

23 ‘‘(1) individuals enrolled under this part shall 

24 be treated for purposes of this title as though the in-
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1 dividual were entitled to benefits and enrolled under 

2 any part of this title; and 

3 ‘‘(2) benefits described in section 1860E–1 

4 shall be payable under this title to such individuals 

5 in the same manner as if such individuals were so 

6 entitled and enrolled. 

7 ‘‘(b) NOT TREATED AS MEDICARE PROGRAM FOR

8 PURPOSES OF MEDICAID PROGRAM.—For purposes of ap9 plying title XIX (including the provision of medicare cost10 sharing assistance under such title), an individual who is 

11 enrolled under this part shall not be treated as being enti12 tled to benefits under this title. 

13 ‘‘(c) NOT TREATED AS MEDICARE PROGRAM FOR

14 PURPOSES OF COBRA CONTINUATION PROVISIONS.—In 

15 applying a COBRA continuation provision (as defined in 

16 section 2791(d)(4) of the Public Health Service Act), any 

17 reference to an entitlement to benefits under this title 

18 shall not be construed to include entitlement to benefits 

19 under this title pursuant to the operation of this part.’’. 

20 (b) CONFORMING AMENDMENTS TO SOCIAL SECU21 RITY ACT.—(1) Section 201(i)(1) of the Social Security 

22 Act (42 U.S.C. 401(i)(1)) is amended by striking ‘‘or the 

23 Federal Supplementary Medical Insurance Trust Fund’’ 

24 and inserting ‘‘the Federal Supplementary Medical Insur-
27 

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1 ance Trust Fund, and the Medicare Early Access Trust 

2 Fund’’. 

3 (2) Section 201(g)(1)(A) of such Act (42 U.S.C. 

4 401(g)(1)(A)) is amended by striking ‘‘and the Federal 

5 Supplementary Medical Insurance Trust Fund established 

6 by title XVIII’’ and inserting ‘‘, the Federal Supple7 mentary Medical Insurance Trust Fund, and the Medicare 

8 Early Access Trust Fund established by title XVIII’’. 

9 (3) Section 1820(i) of such Act (42 U.S.C. 1395i– 

10 4(i)) is amended by striking ‘‘part D’’ and inserting ‘‘part 

11 F’’. 

12 (4) Section 1853 of such Act (42 U.S.C. 

13 1395w–23), as amended by section 222(d) of the 

14 Medicare Prescription Drug, Improvement, and 

15 Modernization Act of 2003 (Public Law 108–173), 

16 is amended by adding at the end the following new 

17 subsection: 

18 ‘‘(k) ADJUSTMENT FOR EARLY ACCESS.—In apply19 ing this section with respect to individuals entitled to bene20 fits under part E, the Secretary shall provide for an appro21 priate adjustment in, for 2005, the Medicare+Choice capi22 tation rate, and for years beginning with 2006, the pay23 ment amount determined under this section or section 

24 1858, as may be appropriate to reflect differences between 
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1 the population served under such part and the population 

2 under parts A and B.’’. 

3 (5) Section 1860D–15(c)(1) of such Act, as 

4 added by section 101(a) of the Medicare Prescrip5 tion Drug, Improvement, and Modernization Act of 

6 2003 (Public Law 108–173), is amended by adding 

7 at the end the following new subparagraph: 

8 ‘‘(E) ADJUSTMENT FOR EARLY ACCESS.— 

9 In applying this section with respect to individ10 uals entitled to benefits under part E, the Sec11 retary shall provide for an appropriate adjust12 ment in the payment amount determined under 

13 this section as may be appropriate to reflect dif14 ferences between the population served under 

15 such part and the population under parts A and 

16 B.’’. 

17 (c) OTHER CONFORMING.—(1) Section 602(2)(D)(ii) 

18 of the Employee Retirement Income Security Act of 1974 

19 (29 U.S.C. 1162(2)) is amended by inserting ‘‘(not includ20 ing an individual who is so entitled pursuant to enrollment 

21 under section 1860E–1)’’ after ‘‘Social Security Act’’. 

22 (2) Section 2202(2)(D)(ii) of the Public Health Serv23 ice Act (42 U.S.C. 300bb–2(2)(D)(ii)) is amended by in24 serting ‘‘(not including an individual who is so entitled 
29 

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1 pursuant to enrollment under section 1860E–1)’’ after 

2 ‘‘Social Security Act’’. 

3 (3) Section 4980B(f)(2)(B)(i)(V) of the Internal Rev4 enue Code of 1986 is amended by inserting ‘‘(not includ5 ing an individual who is so entitled pursuant to enrollment 

6 under section 1860E–1)’’ after ‘‘Social Security Act’’. 

7 Subtitle B—Refundable Tax Credit 

8 for Employee Costs of COBRA 

9 Coverage 

10 SEC. 211. REFUNDABLE TAX CREDIT FOR EMPLOYEE COSTS 

11 OF COBRA COVERAGE. 

12 (a) IN GENERAL.—Chapter 101 of the Internal Rev13 enue Code of 1986, as added by section 102, is amended 

14 by redesignating section 9905 as section 9906 and by in15 serting after section 9904 the following new section: 

16 ‘‘SEC. 9905. EMPLOYEE COSTS OF COBRA COVERAGE. 

17 ‘‘(a) IN GENERAL.—In the case of an individual, 

18 there shall be allowed against the tax imposed by subtitle 

19 A an amount equal to 65 percent of the amount paid by 

20 the taxpayer for coverage of the taxpayer, his spouse, and 

21 dependents under a COBRA continuation provision (as de22 fined in section 9832(d)(1)). 

23 ‘‘(b) SPECIAL RULES.—Rules similar to the rules of 

24 section 9904(c) shall apply for purposes of this section.’’. 

25 (b) CONFORMING AMENDMENTS.— 
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1 (1) Subsection (b) of section 9906 of such Code 

2 (as added by section 102 and redesignated by sub3 section (a)) is further amended by striking ‘‘or 

4 9904(a)’’ and inserting ‘‘9904(a), or 9905(a)’’. 

5 (2) The table of sections for chapter 101 of 

6 such Code is amended by striking the item relating 

7 to section 9905 and inserting the following new 

8 items: 

‘‘Sec. 9905. Employee costs of COBRA coverage. 

‘‘Sec. 9906. Special rules.’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to taxable years beginning after 

11 December 31, 2004. 

12 Subtitle C—FamilyCare 

13 SEC. 221. RENAMING OF TITLE XXI PROGRAM. 

14 (a) IN GENERAL.—The heading of title XXI of the 

15 Social Security Act (42 U.S.C. 1397aa et seq.) is amended 

16 to read as follows: 

17 ‘‘TITLE XXI—FAMILYCARE PROGRAM’’. 

18 (b) PROGRAM REFERENCES.—Any reference in any 

19 provision of Federal law or regulation to ‘‘SCHIP’’ or 

20 ‘‘State children’s health insurance program’’ under title 

21 XXI of the Social Security Act shall be deemed a reference 

22 to the FamilyCare program under such title. 
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1 SEC. 222. FAMILYCARE COVERAGE OF PARENTS AND PREG2 NANT WOMEN UNDER THE MEDICAID PRO3 GRAM AND TITLE XXI. 

4 (a) INCENTIVES TO IMPLEMENT FAMILYCARE COV5 ERAGE.— 

6 (1) UNDER MEDICAID.— 

7 (A) ESTABLISHMENT OF NEW OPTIONAL

8 ELIGIBILITY CATEGORY.—Section 

9 1902(a)(10)(A)(ii) of the Social Security Act 

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

11 (i) by striking ‘‘or’’ at the end of sub12 clause (XVII); 

13 (ii) by adding ‘‘or’’ at the end of sub14 clause (XVIII); and 

15 (iii) by adding at the end the fol16 lowing: 

17 ‘‘(XIX) who are individuals de18 scribed in subsection (k)(1) (relating 

19 to parents of categorically eligible chil20 dren);’’. 

21 (B) PARENTS DESCRIBED.—Section 1902 

22 of the Social Security Act is further amended 

23 by inserting after subsection (j) the following: 

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

25 are individuals— 
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1 ‘‘(i) who are the parents of an individual who 

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

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

4 and who is eligible for medical assistance under sub5 section (a)(10)(A); 

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

7 assistance under such subsection or under a waiver 

8 approved under section 1115 or otherwise (except 

9 under section 1931 or under subsection 

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

11 ‘‘(iii) whose family income or resources exceeds 

12 the effective income level or resource level applicable 

13 under the State plan under part A of title IV as in 

14 effect as of July 16, 1996, but does not exceed the 

15 highest effective income or resource level (if any) ap16 plicable to a child in the family under this title. 

17 ‘‘(B) In establishing an income eligibility level for in18 dividuals described in this paragraph, a State may vary 

19 such level consistent with the various income levels estab20 lished under subsection (l)(2) in order to ensure, to the 

21 maximum extent possible, that such individuals shall be 

22 enrolled in the same program as their children. 

23 ‘‘(C) An individual may not be treated as being de24 scribed in this paragraph unless, at the time of the individ25 ual’s enrollment under this title, the child referred to in 
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1 subparagraph (A)(i) of the individual is also enrolled 

2 under this title or otherwise insured. 

3 ‘‘(D) In this subsection, the term ‘parent’ includes 

4 an individual treated as a caretaker for purposes of car5 rying out section 1931. 

6 ‘‘(E) In this subsection, the term ‘effective income 

7 level’ means the income level expressed as a percent of 

8 the poverty line and considering applicable income dis9 regards. 

10 ‘‘(2) The State shall provide for coverage of a parent 

11 described in paragraph (1) or section 2111 of a child who 

12 is covered under this title or title XXI under the same 

13 title as the title as such child is covered. In the case of 

14 a parent described in paragraph (1) who is also the parent 

15 of a child who is eligible for child health assistance under 

16 title XXI, the State may elect (on a uniform basis) to 

17 cover all such parents under section 2111 or under this 

18 title.’’. 

19 (C) ENHANCED MATCHING FUNDS AVAIL20 ABLE IF CERTAIN CONDITIONS MET.—Section 

21 1905 of the Social Security Act (42 U.S.C. 

22 1396d) is amended— 

23 (i) in the fourth sentence of sub24 section (b), by striking ‘‘or subsection 
34 

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1 (u)(3)’’ and inserting ‘‘, (u)(3), or 

2 (u)(4)(A)’’; and 

3 (ii) in subsection (u)— 

4 (I) by redesignating paragraph 

5 (4) as paragraph (6), and 

6 (II) by inserting after paragraph 

7 (3) the following: 

8 ‘‘(4) For purposes of subsection (b) and section 

9 2105(a)(1): 

10 ‘‘(A) FAMILYCARE PARENTS.—The expendi11 tures described in this subparagraph are the expend12 itures described in the following clauses (i) and (ii): 

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

14 in clauses (iii) and (iv) are met, expenditures 

15 for medical assistance for parents described in 

16 section 1902(k)(1) and for parents who would 

17 be described in such section but for the fact 

18 that they are eligible for medical assistance 

19 under section 1931 or under a waiver approved 

20 under section 1115. 

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

22 conditions described in clause (v) are met, ex23 penditures for medical assistance for pregnant 

24 women described in subsection (n) or under sec25 tion 1902(l)(1)(A) in a family the income of 
35 

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1 which exceeds the effective income level applica2 ble under subsection (a)(10)(A)(i)(III) or 

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

4 involved as of January 1, 2005. 

5 ‘‘(iii) CONDITIONS RELATING TO ENSURING

6 CHILDREN’S COVERAGE FOR ENHANCED MATCH

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) Such State child health plan 

16 does not limit the acceptance of applica17 tions, does not use a waiting list for chil18 dren who meet eligibility standards to 

19 qualify for assistance, and provides bene20 fits to all children in the State who apply 

21 for and meet eligibility standards. 

22 ‘‘(III) Effective for determinations of 

23 eligibility made on or after the date that is 

24 1 year after the date of the enactment of 

25 this clause, the application and renewal 
36 

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1 procedures for individuals under 19 years 

2 of age (or such higher age as the State has 

3 elected under section 1902(l)(1)(D)) for 

4 medical assistance under section 

5 1902(a)(10)(A) are not be more restrictive 

6 or burdensome than such procedures used 

7 for children with higher income under the 

8 State child health plan under title XXI. 

9 ‘‘(iv) CONDITIONS RELATING TO MINIMUM

10 COVERAGE FOR PARENTS FOR ENHANCED

11 MATCH FOR PARENTS.—The conditions de12 scribed in this clause are the following: 

13 ‘‘(I) The State does not apply an in14 come level for parents that is lower than 

15 the effective income level (expressed as a 

16 percent of the poverty line) that has been 

17 specified under the State plan under title 

18 XIX (including under a waiver authorized 

19 by the Secretary or under section 

20 1902(r)(2)), as of January 1, 2005, to be 

21 eligible for medical assistance as a parent 

22 under this title. 

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

24 and title XXI do not provide coverage for 

25 parents with higher family income without 
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1 covering parents with a lower family in2 come. 

3 ‘‘(v) CONDITIONS FOR ENHANCED MATCH

4 FOR CERTAIN PREGNANT WOMEN.—The condi5 tions described in this clause are the following: 

6 ‘‘(I) The State has established an ef7 fective income eligibility level for pregnant 

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

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

10 185 percent of the poverty line. 

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

12 and title XXI do not provide coverage for 

13 pregnant women described in subpara14 graph (A)(ii) with higher family income 

15 without covering such pregnant women 

16 with a lower family income. 

17 ‘‘(III) The State does not apply an in18 come level for pregnant women that is 

19 lower than the effective income level that 

20 has been specified under the State plan 

21 under subsection (a)(10)(A)(i)(III) or 

22 (l)(2)(A) of section 1902, as of January 1, 

23 2005, to be eligible for medical assistance 

24 as a pregnant woman. 
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1 ‘‘(IV) The State satisfies the condi2 tions described in subclauses (I) and (II) 

3 of clause (iii). 

4 ‘‘(vi) DEFINITIONS.—For purposes of this 

5 subsection: 

6 ‘‘(I) The term ‘parent’ has the mean7 ing given such term for purposes of section 

8 1902(k)(1). 

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

10 meaning given such term in section 

11 2110(c)(5).’’. 

12 (D) APPROPRIATION FROM TITLE XXI AL13 LOTMENT FOR CERTAIN MEDICAID EXPANSION

14 COSTS.—Section 2105(a) of the Social Security 

15 Act (42 U.S.C. 1397ee(a)) is amended— 

16 (i) in paragraph (1), by redesignating 

17 subparagraphs (B) through (D) as sub18 paragraphs (C) through (E), respectively, 

19 and by inserting after subparagraph (A) 

20 the following new subparagraph: 

21 ‘‘(B) for medical assistance that is attrib22 utable to expenditures described in section 

23 1905(u)(4)(A);’’; and 

24 (ii) in paragraph (2), by adding at the 

25 end the following new subparagraph: 
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1 ‘‘(E) Fifth, for expenditures for items de2 scribed in paragraph (1)(E).’’. 

3 (E) INCREASING ENHANCED FMAP TO 100

4 PERCENT FOR FISCAL YEARS 2005 AND 2006 FOR

5 COVERAGE OF PARENTS.—Section 2105(b) of 

6 such Act (42 U.S.C. 1397ee(b)) is amended by 

7 adding at the end the following new sentence: 

8 ‘‘Notwithstanding the previous sentence, the 

9 ‘enhanced FMAP’ shall be 100 percent with re10 spect to medical assistance under title XIX for 

11 expenditures described in section 

12 1905(u)(4)(A)(i), but only for such assistance 

13 furnished during fiscal year 2005 and fiscal 

14 year 2006.’’. 

15 (2) UNDER TITLE XXI.— 

16 (A) FAMILYCARE COVERAGE.—Title XXI 

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

18 seq.) is amended by adding at the end the fol19 lowing: 

20 ‘‘SEC. 2111. OPTIONAL FAMILYCARE COVERAGE OF PAR21 ENTS OF TARGETED LOW-INCOME CHILDREN. 

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

23 other provision of this title, a State may provide for cov24 erage, through an amendment to its State child health 

25 plan under section 2102, of parent health assistance for 
40 

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1 targeted low-income parents, health care assistance for 

2 targeted low-income pregnant women, or both, in accord3 ance with this section, but only if— 

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

5 health assistance, the State meets the conditions de6 scribed in clause (iii) of section 1905(u)(4)(A); 

7 ‘‘(2) with respect to the provision of health care 

8 assistance for pregnant women, the State meets the 

9 conditions described in clause (iv) of section 

10 1905(u)(4)(A); and 

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

12 targeted low-income parents, the State elects to pro13 vide medical assistance under section 

14 1902(a)(10)(A)(ii)(XIX), under section 1931, or 

15 under a waiver under section 1115 to individuals de16 scribed in section 1902(k)(1)(A)(i) and elects an ef17 fective income level that, consistent with paragraphs 

18 (1)(B) and (2) of section 1902(k), ensures to the 

19 maximum extent possible, that such individuals shall 

20 be enrolled in the same program as their children if 

21 their children are eligible for coverage under title 

22 XIX (including under a waiver authorized by the 

23 Secretary or under section 1902(r)(2)). 

24 ‘‘(b) DEFINITIONS.—For purposes of this title: 
41 

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

2 ‘parent health assistance’ has the meaning given the 

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

4 any reference to targeted low-income children were 

5 a reference to targeted low-income parents. 

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

7 meaning given the term ‘caretaker relative’ for pur8 poses of carrying out section 1931. 

9 ‘‘(3) HEALTH CARE ASSISTANCE FOR PREG10 NANT WOMEN.—The term ‘health care assistance for 

11 pregnant women’ has the meaning given the term 

12 child health assistance in section 2110(a) as if any 

13 reference to targeted low-income children were a ref14 erence to targeted low-income pregnant women. 

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

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

17 given the term targeted low-income child in section 

18 2110(b) as if the reference to a child were deemed 

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

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

21 ‘‘(A) there shall be substituted for the in22 come level described in paragraph (1)(B)(ii)(I) 

23 the applicable income level in effect for a tar24 geted low-income child; 
42 

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1 ‘‘(B) in paragraph (3), January 1, 2005, 

2 shall be substituted for July 1, 1997; and 

3 ‘‘(C) in paragraph (4), January 1, 2005, 

4 shall be substituted for March 31, 1997. 

5 ‘‘(5) TARGETED LOW-INCOME PREGNANT

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

7 woman’ has the meaning given the term targeted 

8 low-income child in section 2110(b) as if any ref9 erence to a child were a reference to a woman dur10 ing pregnancy and through the end of the month in 

11 which the 60-day period beginning on the last day 

12 of her pregnancy ends; except that in applying such 

13 section— 

14 ‘‘(A) there shall be substituted for the in15 come level described in paragraph (1)(B)(ii)(I) 

16 the applicable income level in effect for a tar17 geted low-income child; 

18 ‘‘(B) in paragraph (3), January 1, 2005, 

19 shall be substituted for July 1, 1997; and 

20 ‘‘(C) in paragraph (4), January 1, 2005, 

21 shall be substituted for March 31, 1997. 

22 ‘‘(c) REFERENCES TO TERMS AND SPECIAL

23 RULES.—In the case of, and with respect to, a State pro24 viding for coverage of parent health assistance to targeted 

25 low-income parents or health care assistance to targeted 
43 

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1 low-income pregnant women under subsection (a), the fol2 lowing special rules apply: 

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

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

5 deemed to include a reference to a targeted low-in6 come parent or a targeted low-income pregnant 

7 woman (as applicable). 

8 ‘‘(2) Any such reference to child health assist9 ance— 

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

11 deemed a reference to parent health assistance; 

12 and 

13 ‘‘(B) with respect to such pregnant women, 

14 is deemed a reference to health care assistance 

15 for pregnant women. 

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

17 case of a family (consisting of a parent and one or 

18 more children) provided coverage under this section 

19 or a pregnant woman provided coverage under this 

20 section without covering other family members, the 

21 limitation on total annual aggregate cost-sharing 

22 shall be applied to such entire family or such preg23 nant woman, respectively. 

24 ‘‘(4) In applying section 2110(b)(4), any ref25 erence to ‘section 1902(l)(2) or 1905(n)(2) (as se-
44 

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1 lected by a State)’ is deemed a reference to the ef2 fective income level applicable to parents under sec3 tion 1931 or under a waiver approved under section 

4 1115, or, in the case of a pregnant woman, the in5 come level established under section 1902(l)(2)(A). 

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

7 reference to children found through screening to be 

8 eligible for medical assistance under the State med9 icaid plan under title XIX is deemed a reference to 

10 parents and pregnant women.’’. 

11 (B) ADDITIONAL ALLOTMENT FOR STATES

12 PROVIDING FAMILYCARE.— 

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

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

15 amended by inserting after subsection (c) 

16 the following: 

17 ‘‘(d) ADDITIONAL ALLOTMENTS FOR STATE PRO18 VIDING FAMILYCARE.— 

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

20 For the purpose of providing additional allotments 

21 to States to provide FamilyCare coverage under sec22 tion 2111, there is appropriated, out of any money 

23 in the Treasury not otherwise appropriated— 

24 ‘‘(A) for fiscal year 2005, $7,000,000,000; 

25 ‘‘(B) for fiscal year 2006, $7,000,000,000; 
45 

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1 ‘‘(C) for fiscal year 2007, $3,000,000,000; 

2 ‘‘(D) for fiscal year 2008, $3,000,000,000; 

3 ‘‘(E) for fiscal year 2009, $6,000,000,000; 

4 ‘‘(F) for fiscal year 2010, $7,000,000,000; 

5 ‘‘(G) for fiscal year 2011, $8,000,000,000; 

6 ‘‘(H) for fiscal year 2012, $9,000,000,000; 

7 and 

8 ‘‘(I) for fiscal year 2013 and each fiscal 

9 year thereafter, the amount of the allotment 

10 provided under this paragraph for the preceding 

11 fiscal year increased by the percentage increase 

12 (if any) in the medical care expenditure cat13 egory of the Consumer Price Index for All 

14 Urban Consumers (United States city average). 

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

16 ‘‘(A) IN GENERAL.—In addition to the al17 lotments provided under subsections (b) and 

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

19 amount available for the additional allotments 

20 under paragraph (1) for a fiscal year, the Sec21 retary shall allot to each State with a State 

22 child health plan approved under this title— 

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

24 than a commonwealth or territory de25 scribed in clause (ii), the same proportion 
46 

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1 as the proportion of the State’s allotment 

2 under subsection (b) (determined without 

3 regard to subsection (f)) to 98.95 percent 

4 of the total amount of the allotments 

5 under such section for such States eligible 

6 for an allotment under this subparagraph 

7 for such fiscal year; and 

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

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

10 same proportion as the proportion of the 

11 commonwealth’s or territory’s allotment 

12 under subsection (c) (determined without 

13 regard to subsection (f)) to 1.05 percent of 

14 the total amount of the allotments under 

15 such section for commonwealths and terri16 tories eligible for an allotment under this 

17 subparagraph for such fiscal year. 

18 ‘‘(B) AVAILABILITY AND REDISTRIBUTION

19 OF UNUSED ALLOTMENTS.—In applying sub20 sections (e) and (f) with respect to additional 

21 allotments made available under this subsection, 

22 the procedures established under such sub23 sections shall ensure such additional allotments 

24 are only made available to States which have 

25 elected to provide coverage under section 2111. 
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1 ‘‘(3) USE OF ADDITIONAL ALLOTMENT.—Addi2 tional allotments provided under this subsection are 

3 not available for amounts expended before October 

4 1, 2004. Such amounts are available for amounts ex5 pended on or after such date for child health assist6 ance for targeted low-income children, as well as for 

7 parent health assistance for targeted low-income 

8 parents, and health care assistance for targeted low9 income pregnant women. 

10 ‘‘(4) REQUIRING ELECTION TO PROVIDE COV11 ERAGE.—No payments may be made to a State 

12 under this title from an allotment provided under 

13 this subsection unless the State has made an elec14 tion to provide parent health assistance for targeted 

15 low-income parents, or health care assistance for 

16 targeted low-income pregnant women.’’. 

17 (ii) CONFORMING AMENDMENTS.— 

18 Section 2104 of the Social Security Act 

19 (42 U.S.C. 1397dd) is amended— 

20 (I) in subsection (a), by inserting 

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

22 ‘‘under this section,’’; 

23 (II) in subsection (b)(1), by in24 serting ‘‘and subsection (d)’’ after 

25 ‘‘Subject to paragraph (4)’’; and 
48 

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1 (III) in subsection (c)(1), by in2 serting ‘‘subject to subsection (d),’’ 

3 after ‘‘for a fiscal year,’’. 

4 (C) NO COST-SHARING FOR PREGNANCY5 RELATED BENEFITS.—Section 2103(e)(2) of 

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

7 1397cc(e)(2)) is amended— 

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

9 PREGNANCY-RELATED SERVICES’’ after 

10 ‘‘PREVENTIVE SERVICES’’; and 

11 (ii) by inserting before the period at 

12 the end the following: ‘‘and for pregnancy13 related services’’. 

14 (3) EFFECTIVE DATE.—The amendments made 

15 by this subsection apply to items and services fur16 nished on or after October 1, 2004, whether or not 

17 regulations implementing such amendments have 

18 been issued. 

19 (b) RULES FOR IMPLEMENTATION BEGINNING WITH

20 FISCAL YEAR 2006.— 

21 (1) EXPANSION OF AVAILABILITY OF EN22 HANCED MATCH UNDER MEDICAID FOR PRE-CHIP

23 EXPANSIONS.—Paragraph (4) of section 1905(u) of 

24 the Social Security Act (42 U.S.C. 1396d(u)), as in25 serted by subsection (a)(1)(C), is amended— 
49 

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1 (A) by amending clause (ii) of subpara2 graph (A) to read as follows: 

3 ‘‘(ii) CERTAIN PREGNANT WOMEN.—Ex4 penditures for medical assistance for pregnant 

5 women under section 1902(l)(1)(A) in a family 

6 the income of which exceeds the 133 percent of 

7 the income official poverty line, but only if the 

8 income level established under section 

9 1902(l)(2) (or under a Statewide waiver under 

10 section 1115) for pregnant women is 185 per11 cent of the income official poverty line.’’; and 

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

13 ‘‘(B) CHILDREN IN FAMILIES WITH INCOME

14 ABOVE MEDICAID MANDATORY LEVEL NOT PRE15 VIOUSLY DESCRIBED.—The expenditures described 

16 in this subparagraph are expenditures (other than 

17 expenditures described in paragraph (2) or (3)) for 

18 medical assistance made available to any child who 

19 is eligible for assistance under section 

20 1902(a)(10)(A) (other than under clause (i)) and 

21 the income of whose family exceeds the minimum in22 come level required under subsection 1902(l)(2) (or, 

23 if higher, the minimum level required under section 

24 1931 for that State) for a child of the age involved 
50 

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1 (treating any child who is 19 or 20 years of age as 

2 being 18 years of age).’’. 

3 (2) OFFSET OF ADDITIONAL EXPENDITURES

4 FOR ENHANCED MATCH FOR PRE-CHIP EXPAN5 SION.—Section 1905 of the Social Security Act (42 

6 U.S.C. 1396d) is amended— 

7 (A) in the fourth sentence of subsection 

8 (b), by inserting ‘‘(except in the case of expend9 itures described in subsection (u)(5))’’ after ‘‘do 

10 not exceed’’; 

11 (B) in subsection (u), by inserting after 

12 paragraph (4) (as inserted by subparagraph 

13 (C)), the following: 

14 ‘‘(5) For purposes of the fourth sentence of sub15 section (b) and section 2105(a), the following payments 

16 under this title do not count against a State’s allotment 

17 under section 2104: 

18 ‘‘(A) REGULAR FMAP FOR EXPENDITURES FOR

19 PREGNANT WOMEN WITH INCOME ABOVE 133 PER20 CENT OF POVERTY.—The portion of the payments 

21 made for expenditures described in paragraph 

22 (4)(A)(ii) that represents the amount that would 

23 have been paid if the enhanced FMAP had not been 

24 substituted for the Federal medical assistance per25 centage. 
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1 ‘‘(B) FAMILYCARE PARENTS.—Payments for 

2 expenditures described in paragraph (4)(A)(i). 

3 ‘‘(C) REGULAR FMAP FOR EXPENDITURES FOR

4 CERTAIN CHILDREN IN FAMILIES WITH INCOME

5 ABOVE MEDICAID MANDATORY LEVEL.—The portion 

6 of the payments made for expenditures described in 

7 paragraph (4)(B) that represents the amount that 

8 would have been paid if the enhanced FMAP had 

9 not been substituted for the Federal medical assist10 ance percentage.’’. 

11 (B) CONFORMING AMENDMENTS.—Sub12 paragraph (B) of section 2105(a)(1) of the So13 cial Security Act, as amended by subsection 

14 (a)(1)(D), is amended to read as follows: 

15 ‘‘(B) CERTAIN FAMILYCARE PARENTS AND

16 OTHERS.—Expenditures for medical assistance 

17 that is attributable to expenditures described in 

18 section 1905(u)(4), except as provided in sec19 tion 1905(u)(5).’’. 

20 (3) EFFECTIVE DATE.—The amendments made 

21 by this subsection apply as of October 1, 2005, to 

22 fiscal years beginning on or after such date and to 

23 expenditures under the State plan on and after such 

24 date, whether or not regulations implementing such 

25 amendments have been issued. 
52 

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1 (c) MAKING TITLE XXI BASE ALLOTMENTS PERMA2 NENT.—Section 2104(a) of the Social Security Act (42 

3 U.S.C. 1397dd(a)) is amended— 

4 (1) by striking ‘‘and’’ at the end of paragraph 

5 (9); 

6 (2) by striking the period at the end of para7 graph (10) and inserting ‘‘; and’’; and 

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

9 ‘‘(11) for fiscal year 2008 and each fiscal year 

10 thereafter, the amount of the allotment provided 

11 under this subsection for the preceding fiscal year 

12 increased by the percentage increase (if any) in the 

13 medical care expenditure category of the Consumer 

14 Price Index for All Urban Consumers (United States 

15 city average).’’. 

16 (d) GAO STUDY.— 

17 (1) STUDY.—The Comptroller General of the 

18 United States shall conduct a study regarding fund19 ing under title XXI of the Social Security Act that 

20 examines— 

21 (A) the adequacy of overall funding under 

22 such title; 

23 (B) the formula for determining allotments 

24 and for redistribution of unspent funds under 

25 such title; and 
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1 (C) the effect of waiting lists and caps on 

2 enrollment under such title. 

3 (2) REPORT.—Not later than July 1, 2006, the 

4 Comptroller General shall submit a report on the 

5 study conducted under paragraph (1). Such report 

6 shall include recommendations regarding a better 

7 mechanism for determining State allotments and re8 distribution of unspent funds under such title in 

9 order to ensure all eligible families in need can ac10 cess coverage through such title. 

11 (e) CONFORMING AMENDMENTS.— 

12 (1) ELIGIBILITY CATEGORIES.—Section 

13 1905(a) of the Social Security Act (42 U.S.C. 

14 1396d(a)) is amended, in the matter before para15 graph (1)— 

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

17 (xii); 

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

19 (xiii); and 

20 (C) by inserting after clause (xiii) the fol21 lowing: 

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

23 if described) in section 1902(k)(1),’’. 
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1 (2) INCOME LIMITATIONS.—Section 1903(f)(4) 

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

3 is amended— 

4 (A) effective October 1, 2005, by inserting 

5 ‘‘1902(a)(10)(A)(i)(VIII),’’ after 

6 ‘‘1902(a)(10)(A)(i)(VII),’’; and 

7 (B) by inserting 

8 ‘‘1902(a)(10)(A)(ii)(XIX),’’ after 

9 ‘‘1902(a)(10)(A)(ii)(XVIII),’’. 

10 (3) CONFORMING AMENDMENT RELATING TO

11 NO WAITING PERIOD FOR PREGNANT WOMEN.—Sec12 tion 2102(b)(1)(B) of the Social Security Act (42 

13 U.S.C. 1397bb(b)(1)(B)) is amended— 

14 (A) by striking ‘‘, and’’ at the end of 

15 clause (i) and inserting a semicolon; 

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

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

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

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

20 (including a waiting period to carry out 

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

22 low-income parent who is pregnant.’’. 
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1 SEC. 223. AUTOMATIC ENROLLMENT OF CHILDREN BORN 

2 TO TITLE XXI PARENTS. 

3 Section 2102(b)(1) of the Social Security Act (42 

4 U.S.C. 1397bb(b)(1)) is amended by adding at the end 

5 the following: 

6 ‘‘(C) AUTOMATIC ELIGIBILITY OF CHIL7 DREN BORN TO A PARENT BEING PROVIDED

8 FAMILYCARE.—Such eligibility standards shall 

9 provide for automatic coverage of a child born 

10 to an individual who is provided assistance 

11 under this title in the same manner as medical 

12 assistance would be provided under section 

13 1902(e)(4) to a child described in such sec14 tion.’’. 

15 SEC. 224. ALLOWING STATES TO SIMPLIFY RULES FOR FAM16 ILIES. 

17 (a) PRESUMPTIVE ELIGIBILITY.— 

18 (1) APPLICATION TO PRESUMPTIVE ELIGIBILITY

19 FOR PREGNANT WOMEN UNDER MEDICAID.—Section 

20 1920(b) of the Social Security Act (42 U.S.C. 

21 1396r–1(b)) is amended by adding at the end after 

22 and below paragraph (2) the following flush sen23 tence: 

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

25 as defined in section 1920A(b)(3).’’. 
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1 (2) OPTIONAL APPLICATION OF PRESUMPTIVE

2 ELIGIBILITY PROVISIONS TO PARENTS.—Section 

3 1920A of the Social Security Act (42 U.S.C. 1396r– 

4 1a) is amended by adding at the end the following: 

5 ‘‘(e) A State may elect to apply the previous provi6 sions of this section to provide for a period of presumptive 

7 eligibility for medical assistance for a parent of a child 

8 with respect to whom such a period is provided under this 

9 section.’’. 

10 (3) APPLICATION UNDER TITLE XXI.—Section 

11 2107(e)(1)(D) of the Social Security Act (42 U.S.C. 

12 1397gg(e)(1)) is amended to read as follows: 

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

14 presumptive eligibility).’’. 

15 (b) 12-MONTHS CONTINUOUS ELIGIBILITY.— 

16 (1) MEDICAID.—Section 1902(e)(12) of the So17 cial Security Act (42 U.S.C. 1396a(e)(12)) is 

18 amended— 

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

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

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

22 State (not to exceed 19 years of age)’’ and in23 serting ‘‘19 years of age (or such higher age as 

24 the State has elected under subsection 

25 (l)(1)(D)) or, at the option of the State, who is 
57 

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1 eligible for medical assistance as the parent of 

2 such a child’’; and 

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

4 period (not to exceed 12 months) ’’ and insert5 ing ‘‘the 12-month period beginning on the 

6 date’’. 

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

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

9 at the end the following: ‘‘Such methods shall pro10 vide continuous eligibility for children under this 

11 title in a manner that is no less generous than the 

12 12-months continuous eligibility provided under sec13 tion 1902(e)(12) for children described in such sec14 tion under title XIX. If a State has elected to apply 

15 section 1902(e)(12) to parents, such methods may 

16 provide continuous eligibility for parents under this 

17 title in a manner that is no less generous than the 

18 12-months continuous eligibility provided under such 

19 section for parents described in such section under 

20 title XIX.’’. 

21 (3) EFFECTIVE DATE.—The amendments made 

22 by this subsection shall take effect on July 1, 2005, 

23 whether or not regulations implementing such 

24 amendments have been issued. 
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1 (c) 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).’’. 
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1 SEC. 225. REVISION AND SIMPLIFICATION OF THE TRANSI2 TIONAL MEDICAL ASSISTANCE PROGRAM 

3 (TMA). 

4 (a) MAKING REPORTING REQUIREMENTS OPTIONAL; 

5 OPTION OF EXTENDED ELIGIBILITY.— 

6 (1) OPTION FOR MAKING REPORTING REQUIRE7 MENTS OPTIONAL.—Section 1925(b) of the Social 

8 Security Act (42 U.S.C. 1396r–6(b)) is amended— 

9 (A) in paragraph (1), by inserting ‘‘, at the 

10 option of a State,’’ after ‘‘and which’’; 

11 (B) in paragraph (2)(A), by inserting 

12 ‘‘Subject to subparagraph (C)—’’ after ‘‘(A) 

13 NOTICES.—’’; 

14 (C) in paragraph (2)(B), by inserting 

15 ‘‘Subject to subparagraph (C)—’’ after ‘‘(B) 

16 REPORTING REQUIREMENTS.—’’; 

17 (D) by adding at the end the following new 

18 subparagraph: 

19 ‘‘(C) STATE OPTION TO WAIVE NOTICE

20 AND REPORTING REQUIREMENTS.—A State 

21 may waive some or all of the reporting require22 ments under clauses (i) and (ii) of subpara23 graph (B). Insofar as it waives such a reporting 

24 requirement, the State need not provide for a 

25 notice under subparagraph (A) relating to such 

26 requirement.’’; and 
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1 (E) in paragraph (3)(A)(iii), by inserting 

2 ‘‘the State has not waived under paragraph 

3 (2)(C) the reporting requirement with respect 

4 to such month under paragraph (2)(B) and if’’ 

5 after ‘‘6-month period if’’. 

6 (2) STATE OPTION TO EXTEND ELIGIBILITY

7 FOR LOW-INCOME INDIVIDUALS FOR UP TO 12 ADDI8 TIONAL MONTHS.—Section 1925 of such Act (42 

9 U.S.C. 1396r–6) is further amended— 

10 (A) by redesignating subsections (c) 

11 through (f) as subsections (d) through (g); and 

12 (B) by inserting after subsection (b) the 

13 following new subsection: 

14 ‘‘(c) STATE OPTION OF UP TO 12 MONTHS OF ADDI15 TIONAL ELIGIBILITY.— 

16 ‘‘(1) IN GENERAL.—Notwithstanding any other 

17 provision of this title, each State plan approved 

18 under this title may provide, at the option of the 

19 State, that the State shall offer to each family which 

20 received assistance during the entire 6-month period 

21 under subsection (b) and which meets the applicable 

22 requirement of paragraph (2), in the last month of 

23 the period the option of extending coverage under 

24 this subsection for the succeeding period not to ex25 ceed 12 months. 
61 

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1 ‘‘(2) INCOME RESTRICTION.—The option under 

2 paragraph (1) shall not be made available to a fam3 ily for a succeeding period unless the State deter4 mines that the family’s average gross monthly earn5 ings (less such costs for such child care as is nec6 essary for the employment of the caretaker relative) 

7 as of the end of the 6-month period under sub8 section (b) does not exceed 185 percent of the offi9 cial poverty line (as defined by the Office of Man10 agement and Budget, and revised annually in ac11 cordance with section 673(2) of the Omnibus Budget 

12 Reconciliation Act of 1981) applicable to a family of 

13 the size involved. 

14 ‘‘(3) APPLICATION OF EXTENSION RULES.— 

15 The provisions of paragraphs (2), (3), (4), and (5) 

16 of subsection (b) shall apply to the extension pro17 vided under this subsection in the same manner as 

18 they apply to the extension provided under sub19 section (b)(1), except that for purposes of this sub20 section— 

21 ‘‘(A) any reference to a 6-month period 

22 under subsection (b)(1) is deemed a reference 

23 to the extension period provided under para24 graph (1) and any deadlines for any notices or 

25 reporting and the premium payment periods 
62 

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1 shall be modified to correspond to the appro2 priate calendar quarters of coverage provided 

3 under this subsection; and 

4 ‘‘(B) any reference to a provision of sub5 section (a) or (b) is deemed a reference to the 

6 corresponding provision of subsection (b) or of 

7 this subsection, respectively.’’. 

8 (b) STATE OPTION TO WAIVE RECEIPT OF MED9 ICAID FOR 3 OF PREVIOUS 6 MONTHS TO QUALIFY FOR

10 TMA.—Section 1925(a)(1) of such Act (42 U.S.C. 1396r– 

11 6(a)(1)) is amended by adding at the end the following: 

12 ‘‘A State may, at its option, also apply the previous sen13 tence in the case of a family that was receiving such aid 

14 for fewer than 3 months, or that had applied for and was 

15 eligible for such aid for fewer than 3 months, during the 

16 6 immediately preceding months described in such sen17 tence.’’. 

18 (c) ELIMINATION OF SUNSET FOR TMA.— 

19 (1) Subsection (g) of section 1925 of such Act 

20 (42 U.S.C. 1396r–6), as redesignated under sub21 section (a)(2), is repealed. 

22 (2) Section 1902(e)(1) of such Act (42 U.S.C. 

23 1396a(e)(1)) is amended by striking ‘‘(A) 

24 Nothwithstanding’’ and all that follows through 
63 

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1 ‘‘During such period, for’’ in subparagraph (B) and 

2 inserting ‘‘For’’. 

3 (d) CMS REPORT ON ENROLLMENT AND PARTICIPA4 TION RATES UNDER TMA.—Section 1925 of such Act, 

5 as amended by subsections (a)(2) and (c)(1), is amended 

6 by adding at the end the following new subsection: 

7 ‘‘(g) ADDITIONAL PROVISIONS.— 

8 ‘‘(1) COLLECTION AND REPORTING OF PARTICI9 PATION INFORMATION.—Each State shall— 

10 ‘‘(A) collect and submit to the Secretary, 

11 in a format specified by the Secretary, informa12 tion on average monthly enrollment and average 

13 monthly participation rates for adults and chil14 dren under this section; and 

15 ‘‘(B) make such information publicly avail16 able. 

17 Such information shall be submitted under subpara18 graph (A) at the same time and frequency in which 

19 other enrollment information under this title is sub20 mitted to the Secretary. Using such information, the 

21 Secretary shall submit to Congress annual reports 

22 concerning such rates.’’. 

23 (e) COORDINATION OF WORK.—Section 1925(g) of 

24 such Act, as added by subsection (d), is amended by add25 ing at the end the following new paragraph: 
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•HR 5218 IH 

1 ‘‘(2) COORDINATION WITH ADMINISTRATION

2 FOR CHILDREN AND FAMILIES.—The Administrator 

3 of the Centers for Medicare & Medicaid Services, in 

4 carrying out this section, shall work with the Assist5 ant Secretary for the Administration for Children 

6 and Families to develop guidance or other technical 

7 assistance for States regarding best practices in 

8 guaranteeing access to transitional medical assist9 ance under this section.’’. 

10 (f) ELIMINATION OF TMA REQUIREMENT FOR

11 STATES THAT EXTEND COVERAGE TO CHILDREN AND

12 PARENTS THROUGH 185 PERCENT OF POVERTY.— 

13 (1) IN GENERAL.—Section 1925 of such Act is 

14 further amended by adding at the end the following 

15 new subsection: 

16 ‘‘(h) PROVISIONS OPTIONAL FOR STATES THAT EX17 TEND COVERAGE TO CHILDREN AND PARENTS THROUGH

18 185 PERCENT OF POVERTY.—A State may (but is not re19 quired to) meet the requirements of subsections (a) and 

20 (b) if it provides for medical assistance under section 1931 

21 to families (including both children and caretaker rel22 atives) the average gross monthly earning of which (less 

23 such costs for such child care as is necessary for the em24 ployment of a caretaker relative) is at or below a level that 

25 is at least 185 percent of the official poverty line (as de-
65 

•HR 5218 IH 

1 fined by the Office of Management and Budget, and re2 vised annually in accordance with section 673(2) of the 

3 Omnibus Budget Reconciliation Act of 1981) applicable 

4 to a family of the size involved.’’. 

5 (2) CONFORMING AMENDMENTS.—Such section 

6 is further amended, in subsections (a)(1) and (b)(1), 

7 by inserting ‘‘, but subject to subsection (h),’’ after 

8 ‘‘Notwithstanding any other provision of this title,’’ 

9 each place it appears. 

10 (g) EXTENDING USE OF OUTSTATIONED WORKERS

11 TO ACCEPT APPLICATIONS FOR TRANSITIONAL MEDICAL

12 ASSISTANCE.—Section 1902(a)(55) of such Act (42 

13 U.S.C. 1396a(a)(55)) is amended by inserting ‘‘and under 

14 section 1931’’ after ‘‘(a)(10)(A)(ii)(IX)’’. 

15 (h) EFFECTIVE DATES.—(1) Except as provided in 

16 this subsection, the amendments made by this section shall 

17 apply to calendar quarters beginning on or after the date 

18 of the enactment of this Act, without regard to whether 

19 or not final regulations to carry out such amendments 

20 have been promulgated by such date. 

21 (2) In the case of a State plan for medical assistance 

22 under title XIX of the Social Security Act which the Sec23 retary of Health and Human Services determines requires 

24 State legislation (other than legislation appropriating 

25 funds) in order for the plan to meet the additional require-
66 

•HR 5218 IH 

1 ments imposed by the amendments made by this section, 

2 the State plan shall not be regarded as failing to comply 

3 with the requirements of such title solely on the basis of 

4 its failure to meet these additional requirements before the 

5 first day of the first calendar quarter beginning after the 

6 close of the first regular session of the State legislature 

7 that begins after the date of the enactment of this Act. 

8 For purposes of the previous sentence, in the case of a 

9 State that has a 2-year legislative session, each year of 

10 such session shall be deemed to be a separate regular ses11 sion of the State legislature. 

12 SEC. 226. LIMITATIONS ON CONFLICTS OF INTEREST. 

13 (a) LIMITATION ON CONFLICTS OF INTEREST IN

14 MARKETING ACTIVITIES.— 

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

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

17 adding at the end the following: 

18 ‘‘(8) LIMITATION ON EXPENDITURES FOR MAR19 KETING ACTIVITIES.—Amounts expended by a State 

20 for the use of an administrative vendor in marketing 

21 health benefits coverage to low-income children 

22 under this title shall not be considered, for purposes 

23 of subsection (a)(2)(D), to be reasonable costs to ad24 minister the plan unless the following conditions are 

25 met with respect to the vendor: 
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1 ‘‘(A) The vendor is independent of any en2 tity offering the coverage in the same area of 

3 the State in which the vendor is conducting 

4 marketing activities. 

5 ‘‘(B) No person who is an owner, em6 ployee, consultant, or has a contract with the 

7 vendor either has any direct or indirect finan8 cial interest with such an entity or has been ex9 cluded from participation in the program under 

10 this title or title XVIII or XIX or debarred by 

11 any Federal agency, or subject to a civil money 

12 penalty under this Act.’’. 

13 (b) PROHIBITION OF AFFILIATION WITH DEBARRED

14 INDIVIDUALS.— 

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

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

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

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

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

20 following: 

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

22 an entity that receives payments under the plan un23 less— 

24 ‘‘(A) no person with an ownership or con25 trol interest (as defined in section 1124(a)(3)) 
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1 in the entity is a person that is debarred, sus2 pended, or otherwise excluded from partici3 pating in procurement or non-procurement ac4 tivities under the Federal Acquisition Regula5 tion; and 

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

7 employment, consulting, or other agreement for 

8 the provision of items or services that are mate9 rial to such entity’s obligations under the plan 

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

11 (2) TITLE XXI.—Section 2107(e)(1) of the So12 cial Security Act (42 U.S.C. 1397gg(e)(1)) is 

13 amended 

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

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

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

17 ‘‘(E) Section 1902(a)(67) (relating to pro18 hibition of affiliation with debarred individ19 uals).’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to expenditures made on or after 

22 July 1, 2005, whether or not regulations implementing 

23 such amendments have been issued. 
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1 SEC. 227. INCREASE IN CHIP ALLOTMENT FOR EACH OF 

2 FISCAL YEARS 2002 THROUGH 2004. 

3 Effective as if included in the enactment of the Bal4 anced Budget Act of 1997, paragraphs (5), (6), and (7) 

5 of section 2104(a) of the Social Security Act (42 U.S.C. 

6 1397dd(a)) are amended by striking ‘‘$3,150,000,000’’ 

7 each place it appears and inserting ‘‘$4,150,000,000’’. 

8 SEC. 228. DEMONSTRATION PROGRAMS TO IMPROVE MED9 ICAID AND CHIP OUTREACH TO HOMELESS 

10 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.). 
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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 2005, 

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

23 SEC. 229. ADDITIONAL CHIP REVISIONS. 

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

25 FAMILIES WITH INCOME BELOW 150 PERCENT OF POV-
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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) EMPLOYER COVERAGE WAIVER CHANGES.—Sec15 tion 2105(c)(3) of such Act (42 U.S.C. 1397ee(c)(3)) is 

16 amended— 

17 (1) by redesignating subparagraphs (A) and 

18 (B) as clauses (i) and (ii) and indenting appro19 priately; 

20 (2) by designating the matter beginning with 

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

22 with the heading ‘‘IN GENERAL’’ and indenting ap23 propriately; and 

24 (3) by adding at the end the following new sub25 paragraph: 
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1 ‘‘(B) APPLICATION OF REQUIREMENTS.— 

2 In carrying out subparagraph (A)— 

3 ‘‘(i) in determining cost-effectiveness, 

4 the Secretary shall measure against family 

5 coverage costs to the extent that a State 

6 has expanded coverage to parents pursuant 

7 to section 2111; 

8 ‘‘(ii) subject to clause (iii), the State 

9 shall provide satisfactory assurances that 

10 the minimum benefits and cost-sharing 

11 protections established under this title are 

12 provided, either through the coverage 

13 under subparagraph (A) or as a supple14 ment to such coverage; and 

15 ‘‘(iii) coverage under such subpara16 graph shall not be considered to violate 

17 clause (ii) because it does not comply with 

18 requirements relating to reviews of health 

19 service decisions if the enrollee involved is 

20 provided the option of being provided bene21 fits directly under this title.’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section apply as of January 1, 2005, whether or not 

24 regulations implementing such amendments have been 

25 issued. 
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1 SEC. 230. INCREASED FEDERAL REIMBURSEMENT FOR 

2 LANGUAGE SERVICES UNDER THE MEDICAID 

3 PROGRAM AND TITLE XXI. 

4 (a) MEDICAID.—Section 1903(a)(3) of the Social Se5 curity Act (42 U.S.C. 1396b(a)(3)) is amended— 

6 (1) in subparagraph (D), by striking ‘‘plus’’ at 

7 the end and inserting ‘‘and’’; and 

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

9 ‘‘(E) 90 percent of the sums expended with 

10 respect to costs incurred during such quarter as 

11 are attributable to the provision of language 

12 services, including oral interpretation, trans13 lations of written materials, and other language 

14 services, for individuals with limited English 

15 proficiency who apply for, or receive, medical 

16 assistance under the State plan; plus’’. 

17 (b) SCHIP.—Section 2105(a)(1) of the Social Secu18 rity Act (42 U.S.C.1397ee(a)) is amended— 

19 (1) in the matter preceding subparagraph (A), 

20 by inserting ‘‘or, in the case of expenditures de21 scribed in subparagraph (D)(iv), 90 percent’’ after 

22 ‘‘enhanced FMAP’’; and 

23 (2) in subparagraph (D)— 

24 (A) in clause (iii), by striking ‘‘and’’ at the 

25 end; 
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1 (B) be redesignating clause (iv) as clause 

2 (v); and 

3 (C) by inserting after clause (iii) the fol4 lowing: 

5 ‘‘(iv) for expenditures attributable to 

6 the provision of language services, includ7 ing oral interpretation, translations of 

8 written materials, and other language serv9 ices, for individuals with limited English 

10 proficiency who apply for, or receive, child 

11 health assistance under the plan; and’’. 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section take effect on January 1, 2005. 

14 TITLE III—NATIONAL CENTER 

15 FOR EVIDENCE-BASED 

16 HEALTHCARE PRACTICES 

17 SEC. 301. ESTABLISHMENT OF CENTER. 

18 Part E of title IV of the Public Health Service Act 

19 (42 U.S.C. 287 et seq.) is amended by adding at the end 

20 the following subpart: 

21 ‘‘Subpart 7—National Center for Evidence-Based 

22 Healthcare Practices 

23 ‘‘SEC. 485J. PURPOSE OF CENTER. 

24 ‘‘(a) IN GENERAL.—The general purpose of the Na25 tional Center for Evidence-Based Healthcare Practices (in 
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1 this subpart referred to as the ‘Center’) is the establish2 ment of national standards for healthcare practices that 

3 are based on scientific evidence developed through the con4 duct of research and the collection of data (in this subpart 

5 referred to as ‘evidence-based practices’). 

6 ‘‘(b) CERTAIN DUTIES.— With respect to evidence7 based practices established under subsection (a), the Di8 rector of the Center— 

9 ‘‘(1) shall disseminate the practices and provide 

10 general information on the practices to the public 

11 and health professionals; 

12 ‘‘(2) may conduct and support programs for 

13 training health professionals with respect to the 

14 practices; and 

15 ‘‘(3) may provide to healthcare entities tech16 nical assistance regarding the practices. 

17 ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—For the 

18 purpose of carrying out this section, there are authorized 

19 to be appropriated such sums as may be necessary for 

20 each of the fiscal years 2005 through 2009.’’ 

Æ