I
107TH CONGRESS
2D SESSION
H. R. 5662
To amend title XXI of the Social Security Act to permit the use of unex-
pended allotments under the State children’s health care program for
an additional fiscal year, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 16, 2002
Ms. DUNN of Washington (for herself, Mrs. WILSON of New Mexico, Mr.
HASTINGS of Washington, Mr. LARSEN of Washington, Mr. SMITH of
Washington, Mr. MCDERMOTT, Mr. NETHERCUTT, and Mr. DICKS) intro-
duced the following bill; which was referred to the Committee on Energy
and Commerce
A BILL
To amend title XXI of the Social Security Act to permit
the use of unexpended allotments under the State chil-
dren’s health care program for an additional fiscal year,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Children First SCHIP
Improvement Act of 2002’’.
SEC. 2. PERMITTING USE OF RETAINED FISCAL YEAR 1998,
1999, AND 2000 SCHIP ALLOTMENTS THROUGH
FISCAL YEAR 2003.
(a) RETAINED AND REDISTRIBUTED ALLOTMENTS
FOR
FISCAL
YEARS
1998 
AND
1999.—Paragraphs
(1)(B)(ii), (2)(A)(i), and (2)(A)(ii) of section 2104(g) of
the Social Security Act (42 U.S.C. 1397dd(g)) are each
amended by striking ‘‘fiscal year 2002’’ and inserting ‘‘fis-
cal year 2003’’.
(b) FISCAL YEAR 2000.—Section 2104(g)(2) of such
Act (42 U.S.C. 1397dd(g)(2)) is amended—
(1) in the heading, by striking ‘‘AND 1999’’ and
inserting ‘‘THROUGH 2000’’;
(2) by adding at the end of subparagraph (A)
the following:
‘‘(iii) FISCAL
YEAR
2000
ALLOT-
MENT.—
‘‘(I) IN
GENERAL.—Except as
provided in subclause (II) with respect
to high unemployment States, of the
amounts allotted to a State pursuant
to this section for fiscal year 2000
that were not expended by the State
by the end of fiscal year 2002, the
amount specified in subparagraph (B)
for fiscal year 2000 for such State
shall remain available for expenditure
by the State through the end of fiscal
year 2003.
‘‘(II) SPECIAL RULE FOR HIGH
UNEMPLOYMENT
STATES.—With re-
spect only to high unemployment
States (as defined in subparagraph
(D)), of the amounts allotted to such
a State pursuant to this section for
fiscal year 2000 that were not ex-
pended by the State by the end of fis-
cal year 2002, all such amounts for
fiscal year 2000 for such State shall
remain available for expenditure by
the State through the end of fiscal
year 2003.’’; and
(3) by adding at the end the following new sub-
paragraph:
‘‘(D) HIGH
UNEMPLOYMENT
STATE
DE-
FINED.—For purposes of subparagraph (A)(iii),
the term ‘high unemployment State’ means a
State that is any of the 50 States or the Dis-
trict of Columbia and that had an unemploy-
ment rate (seasonally adjusted) of at least 6
percent in each of two consecutive months in
2002.’’.
(c) USE OF UNUSED FISCAL YEAR 1998 THROUGH
2000 FUNDS.—Section 2104(g) of such Act (42 U.S.C.
1397dd(g)), as amended by subsection (b), is further
amended by adding at the end the following new para-
graph:
‘‘(5) USE OF UNEXPENDED FISCAL YEARS 1998
THROUGH 2000 ALLOTMENTS.—Notwithstanding any
waiver granted under section 1115 or otherwise for
the use of funds under title XIX or this title that
is approved as of September 30, 2002, amounts
made available for expenditure under this subsection
to provide child health assistance under this title
shall be expended in accordance with the following
priority:
‘‘(A) First to children who are eligible for
child health assistance under this title.
‘‘(B) Second to children who are eligible
for medical assistance under title XIX.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if this section had been
enacted on September 30, 2002, and amounts under title
XXI of the Social Security Act (42 U.S.C. 1397 et seq.)
from allotments for fiscal years 1998 through 2000 are
available for expenditure on and after October 1, 2002,
under the amendments made by this section as if this sec-
tion had been enacted on September 30, 2002.
SEC. 3. SCHIP COVERAGE OF CHILDREN ABOVE THE MED-
ICAID MANDATORY LEVEL FOR CERTAIN
STATES 
MEETING 
ADDITIONAL 
REQUIRE-
MENTS.
Section 2110(b) of the Social Security Act (42 U.S.C.
1397jj(b)) is amended—
(1) in paragraph (1)(B)(ii)(I), by inserting be-
fore the semicolon the following: ‘‘, or, with respect
to allotments for fiscal years beginning with fiscal
year 2001, in the case of an eligible State (as de-
fined in paragraph (5)), whose family income (as so
determined) exceeds such medicaid applicable income
level’’; and
(2) by adding at the end the following new
paragraph:
‘‘(5) ELIGIBLE STATE.—For purposes of para-
graph (1)(B)(ii)(I), an eligible State is a State that,
with respect to the fiscal year involved, meets all of
the following conditions:
‘‘(A) EXPANDED
ELIGIBILITY
OF
CHIL-
DREN UNDER MEDICAID.—The State’s plan for
medical assistance under title XIX provides for
eligibility for medical assistance of children who
are under 19 years of age and whose family in-
come does not exceed 185 percent of the pov-
erty line.
‘‘(B) HIGHEST
SCHIP
INCOME
ELIGI-
BILITY.—The State child health plan (whether
implemented under this title or under title
XIX)—
‘‘(i) has the highest income eligibility
standard permitted under this title as of
January 1, 2001;
‘‘(ii) does not impose any waiting list,
numerical limitation, or similar limitation
on the eligibility of children for child
health assistance; and
‘‘(iii) provides benefits to all children
in the State who apply for and meet eligi-
bility standards.
‘‘(C) NO
LOSS
OF
MEDICAID
OR
SCHIP
COVERAGE
DUE
TO
INABILITY
TO
PAY
PRE-
MIUMS AND COST-SHARING.—The State’s plan
for medical assistance under title XIX and the
State child health plan do deny an eligible child
coverage or needed care because of an inability
to pay premiums or cost-sharing otherwise im-
posed under the respective plan.
‘‘(D) UNIFORM, SIMPLIFIED APPLICATION
FORM.—With respect to children who are eligi-
ble for medical assistance under section
1902(a)(10)(A), the State uses the same uni-
form, simplified application form (including, if
applicable, permitting application other than in
person) for purposes of establishing eligibility
for benefits under this title and also under title
XIX.
‘‘(E) NO ASSET TEST.—The State does not
impose an asset test for eligibility under this
title or under section 1902(l) with respect to
children.
‘‘(F) 12-MONTH
CONTINUOUS
ENROLL-
MENT.—The State has elected the option of
continuing eligibility under section 1902(e)(12)
and has elected a 12-month period under sub-
paragraph (A) of such section and provides for
a similar period of continuous eligibility under
the State child health plan.
‘‘(G) COORDINATED
ENROLLMENT
PROC-
ESS.—The State’s enrollment process under
this title is coordinated with such process under
title XIX so that—
‘‘(i) a family need only interact with a
single agency in order to determine wheth-
er a child is eligible for benefits under this
title or title XIX; and
‘‘(ii) transfers of enrollment, without
a gap in coverage, automatically occur for
a child in a family the income of which
changes so that the child is no longer eligi-
ble for benefits under one such title but be-
comes eligible for benefits under the other
title.
‘‘(H) SAME VERIFICATION AND REDETER-
MINATION
POLICIES; 
AUTOMATIC
REASSESS-
MENT OF ELIGIBILITY.—With respect to chil-
dren who are eligible for medical assistance
under section 1902(a)(10)(A), the State pro-
vides for initial eligibility determinations and
redeterminations of eligibility using the same
verification policies (including policies respect-
ing face-to-face interviews), forms, and fre-
quency as the State uses for such purposes
under this title, and, as part of such redeter-
minations, provides for the automatic reassess-
ment of the eligibility of such children for as-
sistance under this title and title XIX.
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