SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECU-
RITY ACT; REFERENCES; TABLE OF CON-
TENTS. 
(a) SHORT TITLE.—This Act may be cited as ‘‘Chil-
dren’s Health Insurance Program Reauthorization Act of 
2007’’. 
(b) AMENDMENTS TO SOCIAL SECURITY ACT.—Ex-
cept as otherwise specifically provided, whenever in this 
Act an amendment is expressed in terms of an amendment 
to or repeal of a section or other provision, the reference 
shall be considered to be made to that section or other 
provision of the Social Security Act. 
(c) REFERENCES
TO
CHIP; MEDICAID; SEC-
RETARY.—In this Act: 
(1) CHIP.—The term ‘‘CHIP’’ means the 
State Children’s Health Insurance Program estab-
lished under title XXI of the Social Security Act (42 
U.S.C. 1397aa et seq.). 
(2) MEDICAID.—The term ‘‘Medicaid’’ means 
the program for medical assistance established under 
title XIX of the Social Security Act (42 U.S.C. 1396 
et seq.). 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(d) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
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Sec. 1. Short title; amendments to Social Security Act; references; table of con-
tents. 
Sec. 2. Purpose. 
Sec. 3. General effective date; exception for State legislation; contingent effec-
tive date; reliance on law. 
TITLE I—FINANCING 
Subtitle A—Funding 
Sec. 101. Extension of CHIP. 
Sec. 102. Allotments for States and territories for fiscal years 2008 through 
2012. 
Sec. 103. Child Enrollment Contingency Fund. 
Sec. 104. CHIP performance bonus payment to offset additional enrollment 
costs resulting from enrollment and retention efforts. 
Sec. 105. 2-year initial availability of CHIP allotments. 
Sec. 106. Making permanent redistribution of unused fiscal year 2005 allot-
ments to address State funding shortfalls; conforming exten-
sion of qualifying State authority; redistribution of unused al-
lotments for subsequent fiscal years. 
Sec. 107. Option for qualifying States to receive the enhanced portion of the 
CHIP matching rate for Medicaid coverage of certain children. 
Sec. 108. One-time appropriation. 
Sec. 109. Improving funding for the territories under CHIP and Medicaid. 
Subtitle B—Focus on Low-Income Children and Pregnant Women 
Sec. 111. State option to cover low-income pregnant women under CHIP 
through a State plan amendment. 
Sec. 112. Phase-out of coverage for nonpregnant childless adults under CHIP; 
conditions for coverage of parents. 
Sec. 113. Elimination of counting Medicaid child presumptive eligibility costs 
against title XXI allotment. 
Sec. 114. Denial of payments for coverage of children with effective family in-
come that exceeds 300 percent of the poverty line. 
Sec. 115. State authority under Medicaid. 
Sec. 116. Preventing substitution of CHIP coverage for private coverage. 
TITLE II—OUTREACH AND ENROLLMENT 
Subtitle A—Outreach and Enrollment Activities 
Sec. 201. Grants and enhanced administrative funding for outreach and enroll-
ment. 
Sec. 202. Increased outreach and enrollment of Indians. 
Sec. 203. State option to rely on findings from an Express Lane agency to con-
duct simplified eligibility determinations. 
Subtitle B—Reducing Barriers to Enrollment 
Sec. 211. Verification of declaration of citizenship or nationality for purposes 
of eligibility for Medicaid and CHIP. 
Sec. 212. Reducing administrative barriers to enrollment. 
Sec. 213. Model of Interstate coordinated enrollment and coverage process. 
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TITLE III—REDUCING BARRIERS TO PROVIDING PREMIUM 
ASSISTANCE 
Subtitle A—Additional State Option for Providing Premium Assistance 
Sec. 301. Additional State option for providing premium assistance. 
Sec. 302. Outreach, education, and enrollment assistance. 
Subtitle B—Coordinating Premium Assistance With Private Coverage 
Sec. 311. Special enrollment period under group health plans in case of termi-
nation of Medicaid or CHIP coverage or eligibility for assist-
ance in purchase of employment-based coverage; coordination 
of coverage. 
TITLE IV—STRENGTHENING QUALITY OF CARE AND HEALTH 
OUTCOMES 
Sec. 401. Child health quality improvement activities for children enrolled in 
Medicaid or CHIP. 
Sec. 402. Improved availability of public information regarding enrollment of 
children in CHIP and Medicaid. 
Sec. 403. Application of certain managed care quality safeguards to CHIP. 
TITLE V—IMPROVING ACCESS TO BENEFITS 
Sec. 501. Dental benefits. 
Sec. 502. Mental health parity in CHIP plans. 
Sec. 503. Application of prospective payment system for services provided by 
Federally-qualified health centers and rural health clinics. 
Sec. 504. Premium grace period. 
Sec. 505. Demonstration projects relating to diabetes prevention. 
Sec. 506. Clarification of coverage of services provided through school-based 
health centers. 
TITLE VI—PROGRAM INTEGRITY AND OTHER MISCELLANEOUS 
PROVISIONS 
Subtitle A—Program Integrity and Data Collection 
Sec. 601. Payment error rate measurement (‘‘PERM’’). 
Sec. 602. Improving data collection. 
Sec. 603. Updated Federal evaluation of CHIP. 
Sec. 604. Access to records for IG and GAO audits and evaluations. 
Sec. 605. No Federal funding for illegal aliens; disallowance for unauthorized 
expenditures. 
Subtitle B—Miscellaneous Health Provisions 
Sec. 611. Deficit Reduction Act technical corrections. 
Sec. 612. References to title XXI. 
Sec. 613. Prohibiting initiation of new health opportunity account demonstra-
tion programs. 
Sec. 614. County Medicaid health insuring organizations; GAO report on Med-
icaid managed care payment rates. 
Sec. 615. Adjustment in computation of Medicaid FMAP to disregard an ex-
traordinary employer pension contribution. 
Sec. 616. Moratorium on certain payment restrictions. 
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Sec. 617. Medicaid DSH allotments for Tennessee and Hawaii. 
Sec. 618. Clarification treatment of regional medical center. 
Sec. 619. Extension of SSI web-based asset demonstration project to the Med-
icaid program. 
Subtitle C—Other Provisions 
Sec. 621. Support for injured servicemembers. 
Sec. 622. Outreach regarding health insurance options available to children. 
Sec. 623. Sense of Senate regarding access to affordable and meaningful health 
insurance coverage. 
TITLE VII—REVENUE PROVISIONS 
Sec. 701. Increase in excise tax rate on tobacco products. 
Sec. 702. Administrative improvements. 
Sec. 703. Time for payment of corporate estimated taxes. 
SEC. 2. PURPOSE. 
It is the purpose of this Act to provide dependable 
and stable funding for children’s health insurance under 
titles XXI and XIX of the Social Security Act in order 
to enroll all six million uninsured children who are eligible, 
but not enrolled, for coverage today through such titles. 
SEC. 3. GENERAL EFFECTIVE DATE; EXCEPTION FOR STATE 
LEGISLATION; 
CONTINGENT 
EFFECTIVE 
DATE; RELIANCE ON LAW. 
(a) GENERAL EFFECTIVE DATE.—Unless otherwise 
provided in this Act, subject to subsections (b) through 
(d), this Act (and the amendments made by this Act) shall 
take effect on October 1, 2007, and shall apply to child 
health assistance and medical assistance provided on or 
after that date. 
(b) EXCEPTION FOR STATE LEGISLATION.—In the 
case of a State plan under title XIX or State child health 
plan under XXI of the Social Security Act, which the Sec-
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retary of Health and Human Services determines requires 
State legislation in order for the respective plan to meet 
one or more additional requirements imposed by amend-
ments made by this Act, the respective plan shall not be 
regarded as failing to comply with the requirements of 
such title solely on the basis of its failure to meet such 
an additional requirement before the first day of the first 
calendar quarter beginning after the close of the first reg-
ular session of the State legislature that begins after the 
date of enactment of this Act. For purposes of the pre-
vious sentence, in the case of a State that has a 2-year 
legislative session, each year of the session shall be consid-
ered to be a separate regular session of the State legisla-
ture. 
(c) CONTINGENT
EFFECTIVE
DATE
FOR
CHIP 
FUNDING FOR FISCAL YEAR 2008.—Notwithstanding any 
other provision of law, if funds are appropriated under any 
law (other than this Act) to provide allotments to States 
under CHIP for all (or any portion) of fiscal year 2008— 
(1) any amounts that are so appropriated that 
are not so allotted and obligated before the date of 
the enactment of this Act are rescinded; and 
(2) any amount provided for CHIP allotments 
to a State under this Act (and the amendments 
made by this Act) for such fiscal year shall be re-
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‘‘(I) a State that received a pay-
ment, redistribution, or allotment 
under paragraph (1), (2), or (4) of 
subsection (h), the amount of the pro-
jected total Federal payments to the 
State under this title for fiscal year 
2007, as determined on the basis of 
the November 2006 estimates certified 
by the State to the Secretary; 
‘‘(II) a State whose projected 
total Federal payments to the State 
under this title for fiscal year 2007, 
as determined on the basis of the May 
2006 estimates certified by the State 
to the Secretary, were at least 
$95,000,000 but not more than 
$96,000,000 higher than the projected 
total Federal payments to the State 
under this title for fiscal year 2007 on 
the basis of the November 2006 esti-
mates, the amount of the projected 
total Federal payments to the State 
under this title for fiscal year 2007 on 
the basis of the May 2006 estimates; 
or 
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‘‘(III) a State whose projected 
total Federal payments under this 
title for fiscal year 2007, as deter-
mined on the basis of the November 
2006 estimates certified by the State 
to the Secretary, exceeded all amounts 
available to the State for expenditure 
for fiscal year 2007 (including any 
amounts paid, allotted, or redistrib-
uted to the State in prior fiscal 
years), the amount of the projected 
total Federal payments to the State 
under this title for fiscal year 2007, 
as determined on the basis of the No-
vember 2006 estimates certified by 
the State to the Secretary, 
multiplied by the allotment increase factor 
determined under paragraph (5) for fiscal 
year 2008. 
‘‘(iv) The projected total Federal pay-
ments to the State under this title for fis-
cal year 2008, as determined on the basis 
of the August 2007 projections certified by 
the State to the Secretary by not later 
than September 30, 2007. 
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‘‘(B) FOR
THE
COMMONWEALTHS
AND 
TERRITORIES.—Subject to the succeeding provi-
sions of this paragraph and paragraph (4), the 
Secretary shall allot for fiscal year 2008 from 
the amount made available under subsection 
(a)(11) to each of the commonwealths and ter-
ritories described in subsection (c)(3) an 
amount equal to the highest amount of Federal 
payments to the commonwealth or territory 
under this title for any fiscal year occurring 
during the period of fiscal years 1998 through 
2007, multiplied by the allotment increase fac-
tor determined under paragraph (5) for fiscal 
year 2008, except that subparagraph (B) there-
of shall be applied by substituting ‘the United 
States’ for ‘the State’. 
‘‘(C) DEADLINE AND DATA FOR DETER-
MINING
FISCAL
YEAR
2008
ALLOTMENTS.—In 
computing the amounts under subparagraphs 
(A) and (B) that determine the allotments to 
States for fiscal year 2008, the Secretary shall 
use the most recent data available to the Sec-
retary before the start of that fiscal year. The 
Secretary may adjust such amounts and allot-
ments, as necessary, on the basis of the expend-
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iture data for the prior year reported by States 
on CMS Form 64 or CMS Form 21 not later 
than November 30, 2007, but in no case shall 
the Secretary adjust the allotments provided 
under subparagraph (A) or (B) for fiscal year 
2008 after December 31, 2007. 
‘‘(D) 
ADJUSTMENT
FOR
QUALIFYING 
STATES.—In the case of a qualifying State de-
scribed in paragraph (2) of section 2105(g), the 
Secretary shall permit the State to submit re-
vised projection described in subparagraph 
(A)(iv) in order to take into account changes in 
such projections attributable to the application 
of paragraph (4) of such section. 
‘‘(2) FOR FISCAL YEARS 2009 THROUGH 2011.— 
‘‘(A) IN GENERAL.—Subject to paragraphs 
(4) and (6), from the amount made available 
under paragraphs (12) through (14) of sub-
section (a) for each of fiscal years 2009 
through 2011, respectively, the Secretary shall 
compute a State allotment for each State (in-
cluding the District of Columbia and each com-
monwealth and territory) for each such fiscal 
year as follows: 
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‘‘(i) GROWTH
FACTOR
UPDATE
FOR 
FISCAL YEAR 2009.—For fiscal year 2009, 
the allotment of the State is equal to the 
sum of— 
‘‘(I) the amount of the State al-
lotment under paragraph (1) for fiscal 
year 2008; and 
‘‘(II) the amount of any pay-
ments made to the State under sub-
section (j) for fiscal year 2008, 
multiplied by the allotment increase factor 
under paragraph (5) for fiscal year 2009. 
‘‘(ii) REBASING
IN
FISCAL
YEAR 
2010.—For fiscal year 2010, the allotment 
of the State is equal to the Federal pay-
ments to the State that are attributable to 
(and countable towards) the total amount 
of allotments available under this section 
to the State in fiscal year 2009 (including 
payments made to the State under sub-
section (j) for fiscal year 2009 as well as 
amounts redistributed to the State in fiscal 
year 2009), multiplied by the allotment in-
crease factor under paragraph (5) for fis-
cal year 2010. 
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‘‘(iii) GROWTH FACTOR UPDATE FOR 
FISCAL YEAR 2011.—For fiscal year 2011, 
the allotment of the State is equal to the 
sum of— 
‘‘(I) the amount of the State al-
lotment under clause (ii) for fiscal 
year 2010; and 
‘‘(II) the amount of any pay-
ments made to the State under sub-
section (j) for fiscal year 2010, 
multiplied by the allotment increase factor 
under paragraph (5) for fiscal year 2011. 
‘‘(3) FOR FISCAL YEAR 2012.— 
‘‘(A) FIRST HALF.—Subject to paragraphs 
(4) and (6), from the amount made available 
under subparagraph (A) of paragraph (15) of 
subsection (a) for the semi-annual period de-
scribed in such paragraph, increased by the 
amount of the appropriation for such period 
under section 108 of the Children’s Health In-
surance Program Reauthorization Act of 2007, 
the Secretary shall compute a State allotment 
for each State (including the District of Colum-
bia and each commonwealth and territory) for 
such semi-annual period in an amount equal to 
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section 2105 shall apply to payments under this 
subsection in the same manner as they apply to 
payments under such section. 
‘‘(F) CONTINUED
REPORTING.—For pur-
poses of this paragraph and subsection (f), the 
State shall submit to the Secretary the State’s 
projected Federal expenditures, even if the 
amount of such expenditures exceeds the total 
amount of allotments available to the State in 
such fiscal year or period. 
‘‘(G) APPLICATION
TO
COMMONWEALTHS 
AND TERRITORIES.—No payment shall be made 
under this paragraph to a commonwealth or 
territory described in subsection (c)(3) until 
such time as the Secretary determines that 
there are in effect methods, satisfactory to the 
Secretary, for the collection and reporting of re-
liable data regarding the enrollment of children 
described in subparagraphs (A) and (B) in 
order to accurately determine the common-
wealth’s or territory’s eligibility for, and 
amount of payment, under this paragraph.’’. 
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SEC. 104. CHIP PERFORMANCE BONUS PAYMENT TO OFF-
SET ADDITIONAL ENROLLMENT COSTS RE-
SULTING FROM ENROLLMENT AND RETEN-
TION EFFORTS. 
Section 2105(a) (42 U.S.C. 1397ee(a)) is amended 
by adding at the end the following new paragraphs: 
‘‘(3) PERFORMANCE BONUS PAYMENT TO OFF-
SET ADDITIONAL MEDICAID AND CHIP CHILD EN-
ROLLMENT COSTS RESULTING FROM ENROLLMENT 
AND RETENTION EFFORTS.— 
‘‘(A) IN
GENERAL.—In addition to the 
payments made under paragraph (1), for each 
fiscal year (beginning with fiscal year 2008 and 
ending with fiscal year 2012), the Secretary 
shall pay from amounts made available under 
subparagraph (E), to each State that meets the 
condition under paragraph (4) for the fiscal 
year, an amount equal to the amount described 
in subparagraph (B) for the State and fiscal 
year. The payment under this paragraph shall 
be made, to a State for a fiscal year, as a single 
payment not later than the last day of the first 
calendar quarter of the following fiscal year. 
Payments made under this paragraph may only 
be used to reduce the number of low-income 
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children who do not have health insurance cov-
erage in the State. 
‘‘(B) AMOUNT FOR ABOVE BASELINE MED-
ICAID CHILD ENROLLMENT COSTS.—Subject to 
subparagraph (E), the amount described in this 
subparagraph for a State for a fiscal year is 
equal to the sum of the following amounts: 
‘‘(i) FIRST
TIER
ABOVE
BASELINE 
MEDICAID ENROLLEES.—An amount equal 
to the number of first tier above baseline 
child enrollees (as determined under sub-
paragraph (C)(i)) under title XIX for the 
State and fiscal year, multiplied by 15 per-
cent of the projected per capita State Med-
icaid expenditures (as determined under 
subparagraph (D)) for the State and fiscal 
year under title XIX. 
‘‘(ii) SECOND TIER ABOVE BASELINE 
MEDICAID ENROLLEES.—An amount equal 
to the number of second tier above baseline 
child enrollees (as determined under sub-
paragraph (C)(ii)) under title XIX for the 
State and fiscal year, multiplied by 62.5 
percent of the projected per capita State 
Medicaid 
expenditures 
(as 
determined 
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under subparagraph (D)) for the State and 
fiscal year under title XIX. 
‘‘(C) NUMBER OF FIRST AND SECOND TIER 
ABOVE BASELINE CHILD ENROLLEES; BASELINE 
NUMBER OF CHILD ENROLLEES.—For purposes 
of this paragraph: 
‘‘(i) FIRST
TIER
ABOVE
BASELINE 
CHILD ENROLLEES.—The number of first 
tier above baseline child enrollees for a 
State for a fiscal year under title XIX is 
equal to the number (if any, as determined 
by the Secretary) by which— 
‘‘(I) 
the 
monthly 
average 
unduplicated number of qualifying 
children (as defined in subparagraph 
(F)) enrolled during the fiscal year 
under the State plan under title XIX; 
exceeds 
‘‘(II) the baseline number of en-
rollees described in clause (iii) for the 
State and fiscal year under title XIX; 
but not to exceed 3 percent of the baseline 
number of enrollees described in subclause 
(II). 
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‘‘(ii) SECOND TIER ABOVE BASELINE 
CHILD ENROLLEES.—The number of sec-
ond tier above baseline child enrollees for 
a State for a fiscal year under title XIX is 
equal to the number (if any, as determined 
by the Secretary) by which— 
‘‘(I) 
the 
monthly 
average 
unduplicated number of qualifying 
children (as defined in subparagraph 
(F)) enrolled during the fiscal year 
under title XIX as described in clause 
(i)(I); exceeds 
‘‘(II) the sum of the baseline 
number of child enrollees described in 
clause (iii) for the State and fiscal 
year title XIX, as described in clause 
(i)(II), and the maximum number of 
first tier above baseline child enrollees 
for the State and fiscal year under 
title XIX, as determined under clause 
(i). 
‘‘(iii) BASELINE
NUMBER
OF
CHILD 
ENROLLEES.—Subject 
to 
subparagraph 
(H), the baseline number of child enrollees 
for a State under title XIX— 
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‘‘(I) for fiscal year 2008 is equal 
to the monthly average unduplicated 
number of qualifying children enrolled 
in the State plan under title XIX dur-
ing fiscal year 2007 increased by the 
population growth for children in that 
State for the year ending on June 30, 
2006 (as estimated by the Bureau of 
the Census) plus 1 percentage point; 
or 
‘‘(II) for a subsequent fiscal year 
is equal to the baseline number of 
child enrollees for the State for the 
previous fiscal year under title XIX, 
increased by the population growth 
for children in that State for the year 
ending on June 30 before the begin-
ning of the fiscal year (as estimated 
by the Bureau of the Census) plus 1 
percentage point. 
‘‘(D) PROJECTED PER CAPITA STATE MED-
ICAID EXPENDITURES.—For purposes of sub-
paragraph (B), the projected per capita State 
Medicaid expenditures for a State and fiscal 
year under title XIX is equal to the average per 
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capita expenditures (including both State and 
Federal financial participation) for children 
under the State plan under such title, including 
under waivers but not including such children 
eligible for assistance by virtue of the receipt of 
benefits under title XVI, for the most recent 
fiscal year for which actual data are available 
(as determined by the Secretary), increased (for 
each subsequent fiscal year up to and including 
the fiscal year involved) by the annual percent-
age increase in per capita amount of National 
Health Expenditures (as estimated by the Sec-
retary) for the calendar year in which the re-
spective subsequent fiscal year ends and multi-
plied by a State matching percentage equal to 
100 percent minus the Federal medical assist-
ance percentage (as defined in section 1905(b)) 
for the fiscal year involved. 
‘‘(E) AMOUNTS
AVAILABLE
FOR
PAY-
MENTS.— 
‘‘(i) INITIAL APPROPRIATION.—Out of 
any money in the Treasury not otherwise 
appropriated, 
there 
are 
appropriated 
$3,000,000,000 for fiscal year 2008 for 
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under this paragraph for a fiscal year ex-
ceeds the amount available for the fiscal 
year under this subparagraph, the amount 
to be paid under this paragraph to each 
State shall be reduced proportionally. 
‘‘(F) QUALIFYING CHILDREN DEFINED.— 
For purposes of this subsection, the term 
‘qualifying children’ means children who meet 
the eligibility criteria (including income, cat-
egorical eligibility, age, and immigration status 
criteria) in effect as of July 1, 2007, for enroll-
ment under title XIX, taking into account cri-
teria applied as of such date under title XIX 
pursuant to a waiver under section 1115. 
‘‘(G) APPLICATION
TO
COMMONWEALTHS 
AND TERRITORIES.—The provisions of subpara-
graph (G) of section 2104(j)(3) shall apply with 
respect to payment under this paragraph in the 
same manner as such provisions apply to pay-
ment under such section. 
‘‘(H) APPLICATION TO STATES THAT IM-
PLEMENT A MEDICAID EXPANSION FOR CHIL-
DREN AFTER FISCAL YEAR 2007.—In the case of 
a State that provides coverage under paragraph 
(1) or (2) of section 115(b) of the Children’s 
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Health Insurance Program Reauthorization Act 
of 2007 for any fiscal year after fiscal year 
2007— 
‘‘(i) any child enrolled in the State 
plan under title XIX through the applica-
tion of such an election shall be dis-
regarded from the determination for the 
State of the monthly average unduplicated 
number of qualifying children enrolled in 
such plan during the first 3 fiscal years in 
which such an election is in effect; and 
‘‘(ii) in determining the baseline num-
ber of child enrollees for the State for any 
fiscal year subsequent to such first 3 fiscal 
years, the baseline number of child enroll-
ees for the State under title XIX for the 
third of such fiscal years shall be the 
monthly average unduplicated number of 
qualifying children enrolled in the State 
plan under title XIX for such third fiscal 
year. 
‘‘(4) ENROLLMENT
AND
RETENTION
PROVI-
SIONS FOR CHILDREN.—For purposes of paragraph 
(3)(A), a State meets the condition of this para-
graph for a fiscal year if it is implementing at least 
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5 of the following enrollment and retention provi-
sions (treating each subparagraph as a separate en-
rollment and retention provision) throughout the en-
tire fiscal year: 
‘‘(A) 
CONTINUOUS
ELIGIBILITY.—The 
State has elected the option of continuous eligi-
bility for a full 12 months for all children de-
scribed in section 1902(e)(12) under title XIX 
under 19 years of age, as well as applying such 
policy under its State child health plan under 
this title. 
‘‘(B) LIBERALIZATION OF ASSET REQUIRE-
MENTS.—The State meets the requirement 
specified in either of the following clauses: 
‘‘(i) ELIMINATION OF ASSET TEST.— 
The State does not apply any asset or re-
source test for eligibility for children under 
title XIX or this title. 
‘‘(ii) ADMINISTRATIVE
VERIFICATION 
OF ASSETS.—The State— 
‘‘(I) permits a parent or care-
taker relative who is applying on be-
half of a child for medical assistance 
under title XIX or child health assist-
ance under this title to declare and 
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certify by signature under penalty of 
perjury information relating to family 
assets for purposes of determining 
and redetermining financial eligibility; 
and 
‘‘(II) takes steps to verify assets 
through means other than by requir-
ing documentation from parents and 
applicants except in individual cases 
of discrepancies or where otherwise 
justified. 
‘‘(C) ELIMINATION OF IN-PERSON INTER-
VIEW REQUIREMENT.—The State does not re-
quire an application of a child for medical as-
sistance under title XIX (or for child health as-
sistance under this title), including an applica-
tion for renewal of such assistance, to be made 
in person nor does the State require a face-to- 
face interview, unless there are discrepancies or 
individual circumstances justifying an in-person 
application or face-to-face interview. 
‘‘(D) USE
OF
JOINT
APPLICATION
FOR 
MEDICAID
AND
CHIP.—The application form 
and supplemental forms (if any) and informa-
tion verification process is the same for pur-
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poses of establishing and renewing eligibility for 
children for medical assistance under title XIX 
and child health assistance under this title. 
‘‘(E) AUTOMATIC RENEWAL (USE OF AD-
MINISTRATIVE RENEWAL).— 
‘‘(i) IN
GENERAL.—The State pro-
vides, in the case of renewal of a child’s 
eligibility for medical assistance under title 
XIX or child health assistance under this 
title, a pre-printed form completed by the 
State based on the information available to 
the State and notice to the parent or care-
taker relative of the child that eligibility of 
the child will be renewed and continued 
based on such information unless the State 
is provided other information. Nothing in 
this clause shall be construed as preventing 
a State from verifying, through electronic 
and other means, the information so pro-
vided. 
‘‘(ii) SATISFACTION
THROUGH
DEM-
ONSTRATED USE OF EX PARTE PROCESS.— 
A State shall be treated as satisfying the 
requirement of clause (i) if renewal of eli-
gibility of children under title XIX or this 
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title is determined without any require-
ment for an in-person interview, unless 
sufficient information is not in the State’s 
possession and cannot be acquired from 
other sources (including other State agen-
cies) without the participation of the appli-
cant or the applicant’s parent or caretaker 
relative. 
‘‘(F) 
PRESUMPTIVE
ELIGIBILITY
FOR 
CHILDREN.—The State is implementing section 
1920A under title XIX as well as, pursuant to 
section 2107(e)(1), under this title. 
‘‘(G) EXPRESS LANE.—The State is imple-
menting 
the 
option 
described 
in 
section 
1902(e)(13) under title XIX as well as, pursu-
ant to section 2107(e)(1), under this title. 
‘‘(H) PREMIUM ASSISTANCE SUBSIDIES.— 
The State is implementing the option of pro-
viding premium assistance subsidies under sec-
tion 2105(c)(11) or section 1906A.’’. 
SEC. 105. 2-YEAR INITIAL AVAILABILITY OF CHIP ALLOT-
MENTS. 
Section 2104(e) (42 U.S.C. 1397dd(e)) is amended 
to read as follows: 
‘‘(e) AVAILABILITY OF AMOUNTS ALLOTTED.— 
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AUTHORITY.—Section 136(e) of Public Law 110–92 is 
amended to read as follows: 
‘‘(e) APPLICABILITY.— 
‘‘(1) REDISTRIBUTION
OF
UNUSED
FISCAL 
YEAR 2005 ALLOTMENTS.—The amendment made by 
subsection (c) shall apply without regard to any limi-
tation under section 106. 
‘‘(2) EXTENSION
OF
QUALIFYING
STATE
AU-
THORITY.—The amendment made by subsection (d) 
shall be in effect through the date of the enactment 
of the Children’s Health Insurance Program Reau-
thorization Act of 2007.’’. 
(b) REDISTRIBUTIONS
OF UNUSED ALLOTMENTS 
FOR FISCAL YEARS AFTER FISCAL YEAR 2005.—Section 
2104(f) (42 U.S.C. 1397dd(f)) is amended— 
(1) by striking ‘‘The Secretary’’ and inserting 
the following: 
‘‘(1) IN GENERAL.—The Secretary’’; 
(2) by striking ‘‘States that have fully expended 
the amount of their allotments under this section.’’ 
and inserting ‘‘States that the Secretary determines 
with respect to the fiscal year for which unused al-
lotments are available for redistribution under this 
subsection, are shortfall States described in para-
graph (2) for such fiscal year, but not to exceed the 
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amount of the shortfall described in paragraph 
(2)(A) for each such State (as may be adjusted 
under paragraph (2)(C)).’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(2) SHORTFALL STATES DESCRIBED.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), with respect to a fiscal year, a short-
fall State described in this subparagraph is a 
State with a State child health plan approved 
under this title for which the Secretary esti-
mates on the basis of the most recent data 
available to the Secretary, that the projected ex-
penditures under such plan for the State for the 
fiscal year will exceed the sum of— 
‘‘(i) the amount of the State’s allot-
ments for any preceding fiscal years that 
remains available for expenditure and that 
will not be expended by the end of the im-
mediately preceding fiscal year; 
‘‘(ii) the amount (if any) of the child 
enrollment 
contingency 
fund 
payment 
under subsection (j); and 
‘‘(iii) the amount of the State’s allot-
ment for the fiscal year. 
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‘‘(B) PRORATION RULE.—If the amounts 
available for redistribution under paragraph (1) 
for a fiscal year are less than the total amounts 
of the estimated shortfalls determined for the 
year under subparagraph (A), the amount to be 
redistributed under such paragraph for each 
shortfall State shall be reduced proportionally. 
‘‘(C) RETROSPECTIVE ADJUSTMENT.—The 
Secretary may adjust the estimates and deter-
minations made under paragraph (1) and this 
paragraph with respect to a fiscal year as nec-
essary on the basis of the amounts reported by 
States not later than November 30 of the suc-
ceeding fiscal year, as approved by the Sec-
retary.’’. 
SEC. 107. OPTION FOR QUALIFYING STATES TO RECEIVE 
THE ENHANCED PORTION OF THE CHIP 
MATCHING RATE FOR MEDICAID COVERAGE 
OF CERTAIN CHILDREN. 
Section 2105(g) (42 U.S.C. 1397ee(g)) is amended— 
(1) in paragraph (1)(A), as amended by section 
136(d) of Public Law 110–92— 
(A) by inserting ‘‘subject to paragraph 
(4),’’ after ‘‘Notwithstanding any other provi-
sion of law,’’; and 
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(B) by striking ‘‘2007, or 2008’’ and in-
serting ‘‘or 2007’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(4) OPTION
FOR
ALLOTMENTS
FOR
FISCAL 
YEARS 2008 THROUGH 2012.— 
‘‘(A) PAYMENT OF ENHANCED PORTION OF 
MATCHING
RATE
FOR
CERTAIN
EXPENDI-
TURES.—In the case of expenditures described 
in subparagraph (B), a qualifying State (as de-
fined in paragraph (2)) may elect to be paid 
from the State’s allotment made under section 
2104 for any of fiscal years 2008 through 2012 
(insofar as the allotment is available to the 
State under subsections (e) and (i) of such sec-
tion) an amount each quarter equal to the addi-
tional amount that would have been paid to the 
State under title XIX with respect to such ex-
penditures if the enhanced FMAP (as deter-
mined under subsection (b)) had been sub-
stituted for the Federal medical assistance per-
centage (as defined in section 1905(b)). 
‘‘(B) EXPENDITURES
DESCRIBED.—For 
purposes of subparagraph (A), the expenditures 
described in this subparagraph are expenditures 
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made after the date of the enactment of this 
paragraph and during the period in which funds 
are available to the qualifying State for use 
under subparagraph (A), for the provision of 
medical assistance to individuals residing in the 
State who are eligible for medical assistance 
under the State plan under title XIX or under 
a waiver of such plan and who have not at-
tained age 19 (or, if a State has so elected 
under the State plan under title XIX, age 20 
or 21), and whose family income equals or ex-
ceeds 133 percent of the poverty line but does 
not exceed the Medicaid applicable income 
level.’’. 
SEC. 108. ONE-TIME APPROPRIATION. 
There is appropriated to the Secretary, out of any 
money in the Treasury not otherwise appropriated, 
$13,700,000,000 to accompany the allotment made for the 
period beginning on October 1, 2011, and ending on 
March 31, 2012, under section 2104(a)(15)(A) of the So-
cial Security Act (42 U.S.C. 1397dd(a)(15)(A)) (as added 
by section 101), to remain available until expended. Such 
amount shall be used to provide allotments to States under 
paragraph (3) of section 2104(i) of the Social Security Act 
(42 U.S.C. 1397dd(i)), as added by section 102, for the 
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first 6 months of fiscal year 2012 in the same manner 
as allotments are provided under subsection (a)(15)(A) of 
such section 2104 and subject to the same terms and con-
ditions as apply to the allotments provided from such sub-
section (a)(15)(A). 
SEC. 109. IMPROVING FUNDING FOR THE TERRITORIES 
UNDER CHIP AND MEDICAID. 
(a) REMOVAL OF FEDERAL MATCHING PAYMENTS 
FOR DATA REPORTING SYSTEMS FROM THE OVERALL 
LIMIT ON PAYMENTS TO TERRITORIES UNDER TITLE 
XIX.—Section 1108(g) (42 U.S.C. 1308(g)) is amended 
by adding at the end the following new paragraph: 
‘‘(4) EXCLUSION OF CERTAIN EXPENDITURES 
FROM
PAYMENT
LIMITS.—With respect to fiscal 
years beginning with fiscal year 2008, if Puerto 
Rico, the Virgin Islands, Guam, the Northern Mar-
iana Islands, or American Samoa qualify for a pay-
ment under subparagraph (A)(i), (B), or (F) of sec-
tion 1903(a)(3) for a calendar quarter of such fiscal 
year, the payment shall not be taken into account in 
applying subsection (f) (as increased in accordance 
with paragraphs (1), (2), and (3) of this subsection) 
to such commonwealth or territory for such fiscal 
year.’’. 
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(b) GAO STUDY AND REPORT.—Not later than Sep-
tember 30, 2009, the Comptroller General of the United 
States shall submit a report to the Committee on Finance 
of the Senate and the Committee on Energy and Com-
merce of the House of Representatives regarding Federal 
funding under Medicaid and CHIP for Puerto Rico, the 
United States Virgin Islands, Guam, American Samoa, 
and the Northern Mariana Islands. The report shall in-
clude the following: 
(1) An analysis of all relevant factors with re-
spect to— 
(A) eligible Medicaid and CHIP popu-
lations in such commonwealths and territories; 
(B) historical and projected spending needs 
of such commonwealths and territories and the 
ability of capped funding streams to respond to 
those spending needs; 
(C) the extent to which Federal poverty 
guidelines are used by such commonwealths and 
territories to determine Medicaid and CHIP eli-
gibility; and 
(D) the extent to which such common-
wealths and territories participate in data col-
lection and reporting related to Medicaid and 
CHIP, including an analysis of territory partici-
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pation in the Current Population Survey versus 
the American Community Survey. 
(2) Recommendations regarding methods for 
the collection and reporting of reliable data regard-
ing the enrollment under Medicaid and CHIP of 
children in such commonwealths and territories. 
(3) Recommendations for improving Federal 
funding under Medicaid and CHIP for such com-
monwealths and territories. 
Subtitle B—Focus on Low-Income 
Children and Pregnant Women 
SEC. 111. STATE OPTION TO COVER LOW-INCOME PREG-
NANT WOMEN UNDER CHIP THROUGH A 
STATE PLAN AMENDMENT. 
(a) IN GENERAL.—Title XXI (42 U.S.C. 1397aa et 
seq.), as amended by section 112(a), is amended by adding 
at the end the following new section: 
‘‘SEC. 2112. OPTIONAL COVERAGE OF TARGETED LOW-IN-
COME PREGNANT WOMEN THROUGH A STATE 
PLAN AMENDMENT. 
‘‘(a) IN GENERAL.—Subject to the succeeding provi-
sions of this section, a State may elect through an amend-
ment to its State child health plan under section 2102 to 
provide pregnancy-related assistance under such plan for 
targeted low-income pregnant women. 
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‘‘(b) CONDITIONS.—A State may only elect the option 
under subsection (a) if the following conditions are satis-
fied: 
‘‘(1) MINIMUM
INCOME
ELIGIBILITY
LEVELS 
FOR PREGNANT WOMEN AND CHILDREN.—The State 
has established an income eligibility level— 
‘‘(A) for pregnant women under subsection 
(a)(10)(A)(i)(III), 
(a)(10)(A)(i)(IV), 
or 
(l)(1)(A) of section 1902 that is at least 185 
percent (or such higher percent as the State 
has in effect with regard to pregnant women 
under this title) of the poverty line applicable to 
a family of the size involved, but in no case 
lower than the percent in effect under any such 
subsection as of July 1, 2007; and 
‘‘(B) for children under 19 years of age 
under this title (or title XIX) that is at least 
200 percent of the poverty line applicable to a 
family of the size involved. 
‘‘(2) NO CHIP INCOME ELIGIBILITY LEVEL FOR 
PREGNANT WOMEN LOWER THAN THE STATE’S MED-
ICAID LEVEL.—The State does not apply an effective 
income level for pregnant women under the State 
plan amendment that is lower than the effective in-
come level (expressed as a percent of the poverty line 
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and considering applicable income disregards) speci-
fied 
under 
subsection 
(a)(10)(A)(i)(III), 
(a)(10)(A)(i)(IV), or (l)(1)(A) of section 1902, on 
the date of enactment of this paragraph to be eligi-
ble for medical assistance as a pregnant woman. 
‘‘(3) NO COVERAGE FOR HIGHER INCOME PREG-
NANT WOMEN WITHOUT COVERING LOWER INCOME 
PREGNANT
WOMEN.—The State does not provide 
coverage for pregnant women with higher family in-
come without covering pregnant women with a lower 
family income. 
‘‘(4) APPLICATION
OF
REQUIREMENTS
FOR 
COVERAGE OF TARGETED LOW-INCOME CHILDREN.— 
The State provides pregnancy-related assistance for 
targeted low-income pregnant women in the same 
manner, and subject to the same requirements, as 
the State provides child health assistance for tar-
geted low-income children under the State child 
health plan, and in addition to providing child health 
assistance for such women. 
‘‘(5) NO PREEXISTING CONDITION EXCLUSION 
OR WAITING PERIOD.—The State does not apply any 
exclusion of benefits for pregnancy-related assistance 
based on any preexisting condition or any waiting 
period (including any waiting period imposed to 
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carry out section 2102(b)(3)(C)) for receipt of such 
assistance. 
‘‘(6) APPLICATION OF COST-SHARING PROTEC-
TION.—The State provides pregnancy-related assist-
ance to a targeted low-income woman consistent 
with the cost-sharing protections under section 
2103(e) and applies the limitation on total annual 
aggregate cost sharing imposed under paragraph 
(3)(B) of such section to the family of such a 
woman. 
‘‘(7) NO WAITING LIST FOR CHILDREN.—The 
State does not impose, with respect to the enroll-
ment under the State child health plan of targeted 
low-income children during the quarter, any enroll-
ment cap or other numerical limitation on enroll-
ment, any waiting list, any procedures designed to 
delay the consideration of applications for enroll-
ment, or similar limitation with respect to enroll-
ment. 
‘‘(c) OPTION TO PROVIDE PRESUMPTIVE ELIGI-
BILITY.—A State that elects the option under subsection 
(a) and satisfies the conditions described in subsection (b) 
may elect to apply section 1920 (relating to presumptive 
eligibility for pregnant women) to the State child health 
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plan in the same manner as such section applies to the 
State plan under title XIX. 
‘‘(d) DEFINITIONS.—For purposes of this section: 
‘‘(1) PREGNANCY-RELATED ASSISTANCE.—The 
term ‘pregnancy-related assistance’ has the meaning 
given the term ‘child health assistance’ in section 
2110(a) with respect to an individual during the pe-
riod described in paragraph (2)(A). 
‘‘(2) 
TARGETED
LOW-INCOME
PREGNANT 
WOMAN.—The term ‘targeted low-income pregnant 
woman’ means an individual— 
‘‘(A) during pregnancy and through the 
end of the month in which the 60-day period 
(beginning on the last day of her pregnancy) 
ends; 
‘‘(B) whose family income exceeds 185 per-
cent (or, if higher, the percent applied under 
subsection (b)(1)(A)) of the poverty line appli-
cable to a family of the size involved, but does 
not exceed the income eligibility level estab-
lished under the State child health plan under 
this title for a targeted low-income child; and 
‘‘(C) who satisfies the requirements of 
paragraphs (1)(A), (1)(C), (2), and (3) of sec-
tion 2110(b) in the same manner as a child ap-
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plying for child health assistance would have to 
satisfy such requirements. 
‘‘(e) AUTOMATIC
ENROLLMENT
FOR
CHILDREN 
BORN TO WOMEN RECEIVING PREGNANCY-RELATED AS-
SISTANCE.—If a child is born to a targeted low-income 
pregnant woman who was receiving pregnancy-related as-
sistance under this section on the date of the child’s birth, 
the child shall be deemed to have applied for child health 
assistance under the State child health plan and to have 
been found eligible for such assistance under such plan 
or to have applied for medical assistance under title XIX 
and to have been found eligible for such assistance under 
such title, as appropriate, on the date of such birth and 
to remain eligible for such assistance until the child at-
tains 1 year of age. During the period in which a child 
is deemed under the preceding sentence to be eligible for 
child health or medical assistance, the child health or med-
ical assistance eligibility identification number of the 
mother shall also serve as the identification number of the 
child, and all claims shall be submitted and paid under 
such number (unless the State issues a separate identifica-
tion number for the child before such period expires). 
‘‘(f) STATES
PROVIDING
ASSISTANCE
THROUGH 
OTHER OPTIONS.— 
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‘‘(1) CONTINUATION OF OTHER OPTIONS FOR 
PROVIDING ASSISTANCE.—The option to provide as-
sistance in accordance with the preceding sub-
sections of this section shall not limit any other op-
tion for a State to provide— 
‘‘(A) child health assistance through the 
application of sections 457.10, 457.350(b)(2), 
457.622(c)(5), and 457.626(a)(3) of title 42, 
Code of Federal Regulations (as in effect after 
the final rule adopted by the Secretary and set 
forth at 67 Fed. Reg. 61956–61974 (October 2, 
2002)), or 
‘‘(B) pregnancy-related services through 
the application of any waiver authority (as in 
effect on June 1, 2007). 
‘‘(2) CLARIFICATION OF AUTHORITY TO PRO-
VIDE POSTPARTUM SERVICES.—Any State that pro-
vides child health assistance under any authority de-
scribed in paragraph (1) may continue to provide 
such assistance, as well as postpartum services, 
through the end of the month in which the 60-day 
period (beginning on the last day of the pregnancy) 
ends, in the same manner as such assistance and 
postpartum services would be provided if provided 
under the State plan under title XIX, but only if the 
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mother would otherwise satisfy the eligibility re-
quirements that apply under the State child health 
plan (other than with respect to age) during such 
period. 
‘‘(3) NO
INFERENCE.—Nothing in this sub-
section shall be construed— 
‘‘(A) to infer congressional intent regard-
ing the legality or illegality of the content of the 
sections specified in paragraph (1)(A); or 
‘‘(B) to modify the authority to provide 
pregnancy-related services under a waiver speci-
fied in paragraph (1)(B).’’. 
(b) ADDITIONAL CONFORMING AMENDMENTS.— 
(1) NO
COST
SHARING
FOR
PREGNANCY-RE-
LATED BENEFITS.—Section 2103(e)(2) (42 U.S.C. 
1397cc(e)(2)) is amended— 
(A) in the heading, by inserting ‘‘OR 
PREGNANCY-RELATED
ASSISTANCE’’ after 
‘‘PREVENTIVE SERVICES’’; and 
(B) by inserting before the period at the 
end the following: ‘‘or for pregnancy-related as-
sistance’’. 
(2) 
NO
WAITING
PERIOD.—Section 
2102(b)(1)(B) (42 U.S.C. 1397bb(b)(1)(B)) is 
amended— 
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(A) in clause (i), by striking ‘‘, and’’ at the 
end and inserting a semicolon; 
(B) in clause (ii), by striking the period at 
the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
clause: 
‘‘(iii) may not apply a waiting period 
(including a waiting period to carry out 
paragraph (3)(C)) in the case of a targeted 
low-income pregnant woman provided preg-
nancy-related 
assistance 
under 
section 
2112.’’. 
SEC. 112. PHASE-OUT OF COVERAGE FOR NONPREGNANT 
CHILDLESS ADULTS UNDER CHIP; CONDI-
TIONS FOR COVERAGE OF PARENTS. 
(a) PHASE-OUT RULES.— 
(1) IN
GENERAL.—Title XXI (42 U.S.C. 
1397aa et seq.) is amended by adding at the end the 
following new section: 
‘‘SEC. 2111. PHASE-OUT OF COVERAGE FOR NONPREGNANT 
CHILDLESS ADULTS; CONDITIONS FOR COV-
ERAGE OF PARENTS. 
‘‘(a) TERMINATION OF COVERAGE FOR NONPREG-
NANT CHILDLESS ADULTS.— 
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‘‘(1) NO NEW CHIP WAIVERS; AUTOMATIC EX-
TENSIONS AT STATE OPTION THROUGH 2008.—Not-
withstanding section 1115 or any other provision of 
this title, except as provided in this subsection— 
‘‘(A) the Secretary shall not on or after the 
date of the enactment of the Children’s Health 
Insurance Program Reauthorization Act of 
2007, approve or renew a waiver, experimental, 
pilot, or demonstration project that would allow 
funds made available under this title to be used 
to provide child health assistance or other 
health benefits coverage to a nonpregnant child-
less adult; and 
‘‘(B) notwithstanding the terms and condi-
tions of an applicable existing waiver, the provi-
sions of paragraph (2) shall apply for purposes 
of any period beginning on or after January 1, 
2009, in determining the period to which the 
waiver applies, the individuals eligible to be cov-
ered by the waiver, and the amount of the Fed-
eral payment under this title. 
‘‘(2) TERMINATION OF CHIP COVERAGE UNDER 
APPLICABLE
EXISTING
WAIVERS
AT
THE
END
OF 
2008.— 
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‘‘(A) IN
GENERAL.—No funds shall be 
available under this title for child health assist-
ance or other health benefits coverage that is 
provided to a nonpregnant childless adult under 
an applicable existing waiver after December 
31, 2008. 
‘‘(B) 
EXTENSION
UPON
STATE
RE-
QUEST.—If an applicable existing waiver de-
scribed in subparagraph (A) would otherwise 
expire before January 1, 2009, and the State 
requests an extension of such waiver, the Sec-
retary shall grant such an extension, but only 
through December 31, 2008. 
‘‘(C) APPLICATION OF ENHANCED FMAP.— 
The enhanced FMAP determined under section 
2105(b) shall apply to expenditures under an 
applicable existing waiver for the provision of 
child health assistance or other health benefits 
coverage to a nonpregnant childless adult dur-
ing the period beginning on the date of the en-
actment of this subsection and ending on De-
cember 31, 2008. 
‘‘(3) STATE OPTION TO APPLY FOR MEDICAID 
WAIVER
TO
CONTINUE
COVERAGE
FOR
NONPREG-
NANT CHILDLESS ADULTS.— 
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‘‘(A) IN GENERAL.—Each State for which 
coverage under an applicable existing waiver is 
terminated under paragraph (2)(A) may sub-
mit, not later than September 30, 2008, an ap-
plication to the Secretary for a waiver under 
section 1115 of the State plan under title XIX 
to provide medical assistance to a nonpregnant 
childless adult whose coverage is so terminated 
(in this subsection referred to as a ‘Medicaid 
nonpregnant childless adults waiver’). 
‘‘(B) DEADLINE
FOR
APPROVAL.—The 
Secretary shall make a decision to approve or 
deny an application for a Medicaid nonpregnant 
childless adults waiver submitted under sub-
paragraph (A) within 90 days of the date of the 
submission of the application. If no decision has 
been made by the Secretary as of December 31, 
2008, on the application of a State for a Med-
icaid nonpregnant childless adults waiver that 
was submitted to the Secretary by September 
30, 2008, the application shall be deemed ap-
proved. 
‘‘(C) 
STANDARD
FOR
BUDGET
NEU-
TRALITY.—The budget neutrality requirement 
applicable with respect to expenditures for med-
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ical assistance under a Medicaid nonpregnant 
childless adults waiver shall— 
‘‘(i) in the case of 2009, allow expend-
itures for medical assistance under title 
XIX for all such adults to not exceed the 
total amount of payments made to the 
State under paragraph (3)(B) for 2008, 
increased by the percentage increase (if 
any) in the projected nominal per capita 
amount of National Health Expenditures 
for 2009 over 2008, as most recently pub-
lished by the Secretary; and 
‘‘(ii) in the case of any succeeding 
year, allow such expenditures to not exceed 
the amount in effect under this subpara-
graph for the preceding year, increased by 
the percentage increase (if any) in the pro-
jected nominal per capita amount of Na-
tional Health Expenditures for the year in-
volved over the preceding year, as most re-
cently published by the Secretary. 
‘‘(b) RULES AND CONDITIONS FOR COVERAGE OF 
PARENTS OF TARGETED LOW-INCOME CHILDREN.— 
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‘‘(1) TWO-YEAR
TRANSITION
PERIOD; AUTO-
MATIC EXTENSION AT STATE OPTION THROUGH FIS-
CAL YEAR 2009.— 
‘‘(A) NO NEW CHIP WAIVERS.—Notwith-
standing section 1115 or any other provision of 
this title, except as provided in this sub-
section— 
‘‘(i) the Secretary shall not on or after 
the date of the enactment of the Children’s 
Health Insurance Program Reauthoriza-
tion Act of 2007 approve or renew a waiv-
er, experimental, pilot, or demonstration 
project that would allow funds made avail-
able under this title to be used to provide 
child health assistance or other health ben-
efits coverage to a parent of a targeted 
low-income child; and 
‘‘(ii) notwithstanding the terms and 
conditions of an applicable existing waiver, 
the provisions of paragraphs (2) and (3) 
shall apply for purposes of any fiscal year 
beginning on or after October 1, 2009, in 
determining the period to which the waiver 
applies, the individuals eligible to be cov-
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ered by the waiver, and the amount of the 
Federal payment under this title. 
‘‘(B) 
EXTENSION
UPON
STATE
RE-
QUEST.—If an applicable existing waiver de-
scribed in subparagraph (A) would otherwise 
expire before October 1, 2009, and the State 
requests an extension of such waiver, the Sec-
retary shall grant such an extension, but only, 
subject to paragraph (2)(A), through Sep-
tember 30, 2009. 
‘‘(C) APPLICATION OF ENHANCED FMAP.— 
The enhanced FMAP determined under section 
2105(b) shall apply to expenditures under an 
applicable existing waiver for the provision of 
child health assistance or other health benefits 
coverage to a parent of a targeted low-income 
child during fiscal years 2008 and 2009. 
‘‘(2) RULES FOR FISCAL YEARS 2010 THROUGH 
2012.— 
‘‘(A) PAYMENTS FOR COVERAGE LIMITED 
TO BLOCK GRANT FUNDED FROM STATE ALLOT-
MENT.—Any State that provides child health 
assistance or health benefits coverage under an 
applicable existing waiver for a parent of a tar-
geted low-income child may elect to continue to 
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provide such assistance or coverage through fis-
cal year 2010, 2011, or 2012, subject to the 
same terms and conditions that applied under 
the applicable existing waiver, unless otherwise 
modified in subparagraph (B). 
‘‘(B) TERMS AND CONDITIONS.— 
‘‘(i) BLOCK GRANT SET ASIDE FROM 
STATE ALLOTMENT.—If the State makes 
an election under subparagraph (A), the 
Secretary shall set aside for the State for 
each such fiscal year an amount equal to 
the Federal share of 110 percent of the 
State’s projected expenditures under the 
applicable existing waiver for providing 
child health assistance or health benefits 
coverage to all parents of targeted low-in-
come children enrolled under such waiver 
for the fiscal year (as certified by the State 
and submitted to the Secretary by not 
later than August 31 of the preceding fis-
cal year). In the case of fiscal year 2012, 
the set aside for any State shall be com-
puted separately for each period described 
in subparagraphs (A) and (B) of section 
2104(a)(15) and any reduction in the allot-
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ment for either such period under section 
2104(i)(4) shall be allocated on a pro rata 
basis to such set aside. 
‘‘(ii) 
PAYMENTS
FROM
BLOCK 
GRANT.—The Secretary shall pay the State 
from the amount set aside under clause (i) 
for the fiscal year, an amount for each 
quarter of such fiscal year equal to the ap-
plicable 
percentage 
determined 
under 
clause (iii) or (iv) for expenditures in the 
quarter for providing child health assist-
ance or other health benefits coverage to a 
parent of a targeted low-income child. 
‘‘(iii) ENHANCED FMAP ONLY IN FIS-
CAL YEAR 2010 FOR STATES WITH SIGNIFI-
CANT CHILD OUTREACH OR THAT ACHIEVE 
CHILD
COVERAGE
BENCHMARKS; 
FMAP 
FOR ANY OTHER STATES.—For purposes 
of clause (ii), the applicable percentage for 
any quarter of fiscal year 2010 is equal 
to— 
‘‘(I) the enhanced FMAP deter-
mined under section 2105(b) in the 
case of a State that meets the out-
reach or coverage benchmarks de-
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hmoore on PRODPC68 with HMBILLS
scribed in any of subparagraph (A), 
(B), or (C) of paragraph (3) for fiscal 
year 2009; or 
‘‘(II) the Federal medical assist-
ance percentage (as determined under 
section 1905(b) without regard to 
clause (4) of such section) in the case 
of any other State. 
‘‘(iv) AMOUNT OF FEDERAL MATCH-
ING PAYMENT IN 2011 OR 2012.—For pur-
poses of clause (ii), the applicable percent-
age for any quarter of fiscal year 2011 or 
2012 is equal to— 
‘‘(I) the REMAP percentage if— 
‘‘(aa) the applicable percent-
age for the State under clause 
(iii) was the enhanced FMAP for 
fiscal year 2009; and 
‘‘(bb) the State met either of 
the coverage benchmarks de-
scribed in subparagraph (B) or 
(C) of paragraph (3) for the pre-
ceding fiscal year; or 
‘‘(II) the Federal medical assist-
ance percentage (as so determined) in 
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the case of any State to which sub-
clause (I) does not apply. 
For purposes of subclause (I), the REMAP 
percentage is the percentage which is the 
sum of such Federal medical assistance 
percentage and a number of percentage 
points equal to one-half of the difference 
between such Federal medical assistance 
percentage and such enhanced FMAP. 
‘‘(v) NO FEDERAL PAYMENTS OTHER 
THAN FROM BLOCK GRANT SET ASIDE.— 
No payments shall be made to a State for 
expenditures described in clause (ii) after 
the total amount set aside under clause (i) 
for a fiscal year has been paid to the 
State. 
‘‘(vi) NO INCREASE IN INCOME ELIGI-
BILITY
LEVEL
FOR
PARENTS.—No pay-
ments shall be made to a State from the 
amount set aside under clause (i) for a fis-
cal year for expenditures for providing 
child health assistance or health benefits 
coverage to a parent of a targeted low-in-
come child whose family income exceeds 
the income eligibility level applied under 
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the applicable existing waiver to parents of 
targeted low-income children on the date of 
enactment of the Children’s Health Insur-
ance Program Reauthorization Act of 
2007. 
‘‘(3) 
OUTREACH
OR
COVERAGE
BENCH-
MARKS.—For purposes of paragraph (2), the out-
reach or coverage benchmarks described in this 
paragraph are as follows: 
‘‘(A) SIGNIFICANT CHILD OUTREACH CAM-
PAIGN.—The State— 
‘‘(i) was awarded a grant under sec-
tion 2113 for fiscal year 2009; 
‘‘(ii) implemented 1 or more of the en-
rollment and retention provisions described 
in section 2105(a)(4) for such fiscal year; 
or 
‘‘(iii) has submitted a specific plan for 
outreach for such fiscal year. 
‘‘(B) 
HIGH-PERFORMING
STATE.—The 
State, on the basis of the most timely and accu-
rate published estimates of the Bureau of the 
Census, ranks in the lowest 1⁄3 of States in 
terms of the State’s percentage of low-income 
children without health insurance. 
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‘‘(C) STATE INCREASING ENROLLMENT OF 
LOW-INCOME
CHILDREN.—The State qualified 
for a performance bonus payment under section 
2105(a)(3)(B) for the most recent fiscal year 
applicable under such section. 
‘‘(4) RULES
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed as prohibiting a 
State from submitting an application to the Sec-
retary for a waiver under section 1115 of the State 
plan under title XIX to provide medical assistance to 
a parent of a targeted low-income child that was 
provided child health assistance or health benefits 
coverage under an applicable existing waiver. 
‘‘(c) APPLICABLE EXISTING WAIVER.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘applicable exist-
ing waiver’ means a waiver, experimental, pilot, or 
demonstration project under section 1115, grand-
fathered under section 6102(c)(3) of the Deficit Re-
duction Act of 2005, or otherwise conducted under 
authority that— 
‘‘(A) would allow funds made available 
under this title to be used to provide child 
health assistance or other health benefits cov-
erage to— 
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‘‘(i) a parent of a targeted low-income 
child; 
‘‘(ii) a nonpregnant childless adult; or 
‘‘(iii) individuals described in both 
clauses (i) and (ii); and 
‘‘(B) was in effect on October 1, 2007. 
‘‘(2) DEFINITIONS.— 
‘‘(A) PARENT.—The term ‘parent’ includes 
a caretaker relative (as such term is used in 
carrying out section 1931) and a legal guard-
ian. 
‘‘(B) NONPREGNANT CHILDLESS ADULT.— 
The term ‘nonpregnant childless adult’ has the 
meaning given such term by section 2107(f).’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 2107(f) (42 U.S.C. 1397gg(f)) 
is amended— 
(i) by striking ‘‘, the Secretary’’ and 
inserting ‘‘: 
‘‘(1) The Secretary’’; 
(ii) in the first sentence, by inserting 
‘‘or a parent (as defined in section 
2111(c)(2)(A)), who is not pregnant, of a 
targeted low-income child’’ before the pe-
riod; 
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(iii) by striking the second sentence; 
and 
(iv) by adding at the end the following 
new paragraph: 
‘‘(2) The Secretary may not approve, extend, 
renew, or amend a waiver, experimental, pilot, or 
demonstration project with respect to a State after 
the date of enactment of the Children’s Health In-
surance Program Reauthorization Act of 2007 that 
would waive or modify the requirements of section 
2111.’’. 
(B) Section 6102(c) of the Deficit Reduc-
tion Act of 2005 (Public Law 109–171; 120 
Stat. 131) is amended by striking ‘‘Nothing’’ 
and inserting ‘‘Subject to section 2111 of the 
Social Security Act, as added by section 112 of 
the Children’s Health Insurance Program Re-
authorization Act of 2007, nothing’’. 
(b) GAO STUDY AND REPORT.— 
(1) IN GENERAL.—The Comptroller General of 
the United States shall conduct a study of wheth-
er— 
(A) the coverage of a parent, a caretaker 
relative (as such term is used in carrying out 
section 1931), or a legal guardian of a targeted 
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low-income child under a State health plan 
under title XXI of the Social Security Act in-
creases the enrollment of, or the quality of care 
for, children, and 
(B) such parents, relatives, and legal 
guardians who enroll in such a plan are more 
likely to enroll their children in such a plan or 
in a State plan under title XIX of such Act. 
(2) REPORT.—Not later than 2 years after the 
date of the enactment of this Act, the Comptroller 
General shall report the results of the study to the 
Committee on Finance of the Senate and the Com-
mittee on Energy and Commerce of the House of 
Representatives, including recommendations (if any) 
for changes in legislation. 
SEC. 113. ELIMINATION OF COUNTING MEDICAID CHILD 
PRESUMPTIVE ELIGIBILITY COSTS AGAINST 
TITLE XXI ALLOTMENT. 
(a) IN GENERAL.—Section 2105(a)(1) (42 U.S.C. 
1397ee(a)(1)) is amended— 
(1) in the matter preceding subparagraph (A), 
by striking ‘‘(or, in the case of expenditures de-
scribed in subparagraph (B), the Federal medical 
assistance percentage (as defined in the first sen-
tence of section 1905(b)))’’; and 
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(2) by striking subparagraph (B) and inserting 
the following new subparagraph: 
‘‘(B) [reserved]’’. 
(b) AMENDMENTS TO MEDICAID.— 
(1) ELIGIBILITY
OF
A
NEWBORN.—Section 
1902(e)(4) (42 U.S.C. 1396a(e)(4)) is amended in 
the first sentence by striking ‘‘so long as the child 
is a member of the woman’s household and the 
woman remains (or would remain if pregnant) eligi-
ble for such assistance’’. 
(2) APPLICATION OF QUALIFIED ENTITIES TO 
PRESUMPTIVE ELIGIBILITY FOR PREGNANT WOMEN 
UNDER
MEDICAID.—Section 1920(b) (42 U.S.C. 
1396r–1(b)) is amended by adding after paragraph 
(2) the following flush sentence: 
‘‘The term ‘qualified provider’ also includes a qualified en-
tity, as defined in section 1920A(b)(3).’’. 
SEC. 114. DENIAL OF PAYMENTS FOR COVERAGE OF CHIL-
DREN WITH EFFECTIVE FAMILY INCOME 
THAT EXCEEDS 300 PERCENT OF THE POV-
ERTY LINE. 
(a) IN
GENERAL.—Section 2105(c) (42 U.S.C. 
1397ee(c)) is amended by adding at the end the following 
new paragraph: 
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‘‘(8) DENIAL
OF
PAYMENTS
FOR
EXPENDI-
TURES FOR CHILD HEALTH ASSISTANCE FOR CHIL-
DREN WHOSE EFFECTIVE FAMILY INCOME EXCEEDS 
300 PERCENT OF THE POVERTY LINE.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), for child health assistance 
furnished after the date of the enactment of 
this paragraph, no payment shall be made 
under this section for any expenditures for pro-
viding child health assistance or health benefits 
coverage for a targeted low-income child whose 
effective family income would exceed 300 per-
cent of the poverty line but for the application 
of a general exclusion of a block of income that 
is not determined by type of expense or type of 
income. 
‘‘(B) 
EXCEPTION.—Subparagraph 
(A) 
shall not apply to any State that, on the date 
of enactment of the Children’s Health Insur-
ance Program Reauthorization Act of 2007, has 
an approved State plan amendment or waiver to 
provide expenditures described in such subpara-
graph under the State child health plan.’’. 
(b) RULE
OF
CONSTRUCTION.—Nothing in the 
amendments made by this section shall be construed as— 
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(1) changing any income eligibility level for chil-
dren under title XXI of the Social Security Act; or 
(2) changing the flexibility provided States 
under such title to establish the income eligibility 
level for targeted low-income children under a State 
child health plan and the methodologies used by the 
State to determine income or assets under such 
plan. 
SEC. 115. STATE AUTHORITY UNDER MEDICAID. 
(a) STATE AUTHORITY TO EXPAND INCOME OR RE-
SOURCE ELIGIBILITY LEVELS FOR CHILDREN.—Nothing 
in this Act, the amendments made by this Act, or title 
XIX of the Social Security Act, including paragraph 
(2)(B) of section 1905(u) of such Act, shall be construed 
as limiting the flexibility afforded States under such title 
to increase the income or resource eligibility levels for chil-
dren under a State plan or waiver under such title. 
(b) STATE AUTHORITY TO RECEIVE PAYMENTS 
UNDER MEDICAID FOR PROVIDING MEDICAL ASSISTANCE 
TO CHILDREN ELIGIBLE AS A RESULT OF AN INCOME OR 
RESOURCE ELIGIBILITY LEVEL EXPANSION.—A State 
may, notwithstanding the fourth sentence of subsection 
(b) of section 1905 of the Social Security Act (42 U.S.C. 
1396d) or subsection (u) of such section— 
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(1) cover individuals described in section 
1902(a)(10)(A)(ii)(IX) of the Social Security Act 
and thereby receive Federal financial participation 
for medical assistance for such individuals under 
title XIX of the Social Security Act; or 
(2) receive Federal financial participation for 
expenditures for medical assistance under Medicaid 
for children described in paragraph (2)(B) or (3) of 
section 1905(u) of such Act based on the Federal 
medical assistance percentage, as otherwise deter-
mined based on the first and third sentences of sub-
section (b) of section 1905 of the Social Security 
Act, rather than on the basis of an enhanced FMAP 
(as defined in section 2105(b) of such Act). 
SEC. 116. PREVENTING SUBSTITUTION OF CHIP COVERAGE 
FOR PRIVATE COVERAGE. 
(a) FINDINGS.— 
(1) Congress agrees with the President that 
low-income children should be the first priority of all 
States in providing child health assistance under 
CHIP. 
(2) Congress agrees with the President and the 
Congressional Budget Office that the substitution of 
CHIP coverage for private coverage occurs more fre-
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quently for children in families at higher income lev-
els. 
(3) Congress agrees with the President that it 
is appropriate that States that expand CHIP eligi-
bility to children at higher income levels should have 
achieved a high level of health benefits coverage for 
low-income children and should implement strategies 
to address such substitution. 
(4) Congress concludes that the policies speci-
fied in this section (and the amendments made by 
this section) are the appropriate policies to address 
these issues. 
(b) ANALYSES OF BEST PRACTICES AND METHOD-
OLOGY IN ADDRESSING CROWD-OUT.— 
(1) GAO REPORT.—Not later than 18 months 
after the date of the enactment of this Act, the 
Comptroller General of the United States shall sub-
mit to the Committee on Finance of the Senate and 
the Committee on Energy and Commerce of the 
House of Representatives and the Secretary a report 
describing the best practices by States in addressing 
the issue of CHIP crowd-out. Such report shall in-
clude analyses of— 
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(A) the impact of different geographic 
areas, including urban and rural areas, on 
CHIP crowd-out; 
(B) the impact of different State labor 
markets on CHIP crowd-out; 
(C) the impact of different strategies for 
addressing CHIP crowd-out; 
(D) the incidence of crowd-out for children 
with different levels of family income; and 
(E) the relationship (if any) between 
changes in the availability and affordability of 
dependent coverage under employer-sponsored 
health insurance and CHIP crowd-out. 
(2) IOM REPORT
ON
METHODOLOGY.—The 
Secretary shall enter into an arrangement with the 
Institute of Medicine under which the Institute sub-
mits to the Committee on Finance of the Senate and 
the Committee on Energy and Commerce of the 
House of Representatives and the Secretary, not 
later than 18 months after the date of the enact-
ment of this Act, a report on— 
(A) the most accurate, reliable, and timely 
way to measure— 
(i) on a State-by-State basis, the rate 
of public and private health benefits cov-
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erage among low-income children with 
family income that does not exceed 200 
percent of the poverty line; and 
(ii) CHIP crowd-out, including in the 
case of children with family income that 
exceeds 200 percent of the poverty line; 
and 
(B) the least burdensome way to gather 
the necessary data to conduct the measure-
ments described in subparagraph (A). 
Out of any money in the Treasury not otherwise ap-
propriated, 
there 
are 
hereby 
appropriated 
$2,000,000 to carry out this paragraph for the pe-
riod ending September 30, 2009. 
(3) INCORPORATION OF DEFINITIONS.—In this 
section, the terms ‘‘CHIP crowd-out’’, ‘‘children’’, 
‘‘poverty line’’, and ‘‘State’’ have the meanings given 
such terms for purposes of CHIP. 
(4) DEFINITION OF CHIP CROWD-OUT.—Section 
2110(c) (42 U.S.C. 1397jj(c)) is amended by adding 
at the end the following: 
‘‘(9) CHIP CROWD-OUT.—The term ‘CHIP 
crowd-out’ means the substitution of— 
‘‘(A) health benefits coverage for a child 
under this title, for 
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‘‘(B) health benefits coverage for the child 
other than under this title or title XIX.’’. 
(c) DEVELOPMENT
OF
BEST
PRACTICE
REC-
OMMENDATIONS.—Section 2107 (42 U.S.C. 1397gg) is 
amended by adding at the end the following: 
‘‘(g) DEVELOPMENT
OF
BEST
PRACTICE
REC-
OMMENDATIONS.—Within 6 months after the date of re-
ceipt of the reports under subsections (a) and (b) of sec-
tion 116 of the Children’s Health Insurance Program Re-
authorization Act of 2007, the Secretary, in consultation 
with States, including Medicaid and CHIP directors in 
States, shall publish in the Federal Register, and post on 
the public website for the Department of Health and 
Human Services— 
‘‘(1) recommendations regarding best practices 
for States to use to address CHIP crowd-out; and 
‘‘(2) uniform standards for data collection by 
States to measure and report— 
‘‘(A) health benefits coverage for children 
with family income below 200 percent of the 
poverty line; and 
‘‘(B) on CHIP crowd-out, including for 
children with family income that exceeds 200 
percent of the poverty line. 
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The Secretary, in consultation with States, including Med-
icaid and CHIP directors in States, may from time to time 
update the best practice recommendations and uniform 
standards set published under paragraphs (1) and (2) and 
shall provide for publication and posting of such updated 
recommendations and standards.’’. 
(d) REQUIREMENT TO ADDRESS CHIP CROWD-OUT; 
SECRETARIAL REVIEW.—Section 2106 (42 U.S.C. 1397ff) 
is amended by adding at the end the following: 
‘‘(f) REQUIREMENT TO ADDRESS CHIP CROWD- 
OUT; SECRETARIAL REVIEW.— 
‘‘(1) IN GENERAL.—Not later than 6 months 
after the best practice application date described in 
paragraph (2), each State that has a State child 
health plan shall submit to the Secretary a State 
plan amendment describing how the State— 
‘‘(A) will address CHIP crowd-out; and 
‘‘(B) will incorporate recommended best 
practices referred to in such paragraph. 
‘‘(2) BEST PRACTICE APPLICATION DATE.—The 
best practice application date described in this para-
graph is the date that is 6 months after the date of 
publication of recommendations regarding best prac-
tices under section 2107(g)(1). 
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‘‘(3) SECRETARIAL
REVIEW.—The Secretary 
shall— 
‘‘(A) review each State plan amendment 
submitted under paragraph (1); 
‘‘(B) determine whether the amendment 
incorporates recommended best practices re-
ferred to in paragraph (2); 
‘‘(C) in the case of a higher income eligi-
bility 
State 
(as 
defined 
in 
section 
2105(c)(9)(B)), determine whether the State 
meets the enrollment targets required under 
reference section 2105(c)(9)(C); and 
‘‘(D) notify the State of such determina-
tions.’’. 
(e) LIMITATION ON PAYMENTS FOR STATES COV-
ERING HIGHER INCOME CHILDREN.— 
(1) IN GENERAL.—Section 2105(c) (42 U.S.C. 
1397ee(c)), as amended by section 114(a), is amend-
ed by adding at the end the following new sub-
section: 
‘‘(9) LIMITATION ON PAYMENTS FOR STATES 
COVERING HIGHER INCOME CHILDREN.— 
‘‘(A) DETERMINATIONS.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall determine, for each State that is a 
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higher income eligibility State as of April 
1 of 2010 and each subsequent year, 
whether the State meets the target rate of 
coverage of low-income children required 
under subparagraph (C) and shall notify 
the State in that month of such determina-
tion. 
‘‘(ii) DETERMINATION OF FAILURE.— 
If the Secretary determines in such month 
that a higher income eligibility State does 
not meet such target rate of coverage, sub-
ject to subparagraph (E), no payment shall 
be made as of October 1 of such year on 
or after October 1, 2010, under this sec-
tion for child health assistance provided for 
higher-income children (as defined in sub-
paragraph (D)) under the State child 
health plan unless and until the State es-
tablishes it is in compliance with such re-
quirement. 
‘‘(B) 
HIGHER
INCOME
ELIGIBILITY 
STATE.—A higher income eligibility State de-
scribed in this clause is a State that— 
‘‘(i) applies under its State child 
health plan an eligibility income standard 
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for targeted low-income children that ex-
ceeds 300 percent of the poverty line; or 
‘‘(ii) because of the application of a 
general exclusion of a block of income that 
is not determined by type of expense or 
type of income, applies an effective income 
standard under the State child health plan 
for such children that exceeds 300 percent 
of the poverty line. 
‘‘(C) REQUIREMENT FOR TARGET RATE OF 
COVERAGE OF LOW-INCOME CHILDREN.— 
‘‘(i) IN GENERAL.—The requirement 
of this subparagraph for a State is that 
the rate of health benefits coverage (both 
private and public) for low-income children 
in the State is not statistically significantly 
(at a p=0.05 level) less than the target 
rate of coverage specified in clause (ii). 
‘‘(ii) TARGET RATE.—The target rate 
of coverage specified in this clause is the 
average rate (determined by the Secretary) 
of health benefits coverage (both private 
and public) as of January 1, 2010, among 
the 10 of the 50 States and the District of 
Columbia with the highest percentage of 
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health benefits coverage (both private and 
public) for low-income children. 
‘‘(iii) STANDARDS FOR DATA.—In ap-
plying this subparagraph, rates of health 
benefits coverage for States shall be deter-
mined using the uniform standards identi-
fied by the Secretary under section 
2107(g)(2). 
‘‘(D) HIGHER-INCOME
CHILD.—For pur-
poses of this paragraph, the term ‘higher in-
come child’ means, with respect to a State child 
health plan, a targeted low-income child whose 
family income— 
‘‘(i) exceeds 300 percent of the pov-
erty line; or 
‘‘(ii) would exceed 300 percent of the 
poverty line if there were not taken into 
account any general exclusion described in 
subparagraph (B)(ii). 
‘‘(E) NOTICE AND OPPORTUNITY TO COM-
PLY
WITH
TARGET
RATE.—If the Secretary 
makes a determination described in subpara-
graph (A)(ii) in April of a year, the Secretary— 
‘‘(i) shall provide the State with the 
opportunity to submit and implement a 
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corrective action plan for the State to come 
into compliance with the requirement of 
subparagraph (C) before October 1 of such 
year; 
‘‘(ii) shall not effect a denial of pay-
ment under subparagraph (A) on the basis 
of such determination before October 1 of 
such year; and 
‘‘(iii) shall not effect such a denial if 
the Secretary determines that there is a 
reasonable likelihood that the implementa-
tion of such a correction action plan will 
bring the State into compliance with the 
requirement of subparagraph (C).’’. 
(2) CONSTRUCTION.—Nothing in the amend-
ment made by paragraph (1) or this section this 
shall be construed as authorizing the Secretary of 
Health and Human Services to limit payments 
under title XXI of the Social Security Act in the 
case of a State that is not a higher income eligibility 
State (as defined in section 2105(c)(9)(B) of such 
Act, as added by paragraph (1)). 
(f) TREATMENT OF MEDICAL SUPPORT ORDERS.— 
Section 2102(b) (42 U.S.C. 1397bb(c)) is amended by 
adding at the end the following: 
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‘‘(5) TREATMENT
OF
MEDICAL
SUPPORT
OR-
DERS.— 
‘‘(A) IN GENERAL.—Nothing in this title 
shall be construed to allow the Secretary to re-
quire that a State deny eligibility for child 
health assistance to a child who is otherwise eli-
gible on the basis of the existence of a valid 
medical support order being in effect. 
‘‘(B) STATE
ELECTION.—A State may 
elect to limit eligibility for child health assist-
ance to a targeted low-income child on the basis 
of the existence of a valid medical support order 
on the child’s behalf, but only if the State does 
not deny such eligibility for a child on such 
basis if the child asserts that the order is not 
being complied with for any of the reasons de-
scribed in subparagraph (C) unless the State 
demonstrates that none of such reasons applies 
in the case involved. 
‘‘(C) REASONS
FOR
NONCOMPLIANCE.— 
The reasons described in this subparagraph for 
noncompliance with a medical support order 
with respect to a child are that the child is not 
being provided health benefits coverage pursu-
ant to such order because— 
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‘‘(i) of failure of the noncustodial par-
ent to comply with the order; 
‘‘(ii) of the failure of an employer, 
group health plan or health insurance 
issuer to comply with such order; or 
‘‘(iii) the child resides in a geographic 
area in which benefits under the health 
benefits coverage are generally unavail-
able.’’. 
(g) EFFECTIVE DATE OF AMENDMENTS; CONSIST-
ENCY OF POLICIES.—The amendments made by this sec-
tion shall take effect as if enacted on August 16, 2007. 
The Secretary may not impose (or continue in effect) any 
requirement, prevent the implementation of any provision, 
or condition the approval of any provision under any State 
child health plan, State plan amendment, or waiver re-
quest on the basis of any policy or interpretation relating 
to CHIP crowd-out, coordination with other sources of 
coverage, target rate of coverage, or medical support order 
other than under the amendments made by this section. 
In the case of a State plan amendment which was denied 
on or after August 16, 2007, on the basis of any such 
policy or interpretation in effect before the date of the en-
actment of this Act, if the State submits a modification 
of such State plan amendment that complies with title 
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XXI of the Social Security Act as amended by this Act, 
such submitted State plan amendment, as so modified, 
shall be considered as if it had been submitted (as so modi-
fied) as of the date of its original submission, but such 
State plan amendment shall not be effective before the 
date of the enactment of this Act and the exception de-
scribed in subparagraph (B) of section 2105(c)(8) of the 
Social Security Act, as added by section 114(a), shall not 
apply to such State plan amendment. 
TITLE II—OUTREACH AND 
ENROLLMENT 
Subtitle A—Outreach and 
Enrollment Activities 
SEC. 201. GRANTS AND ENHANCED ADMINISTRATIVE FUND-
ING FOR OUTREACH AND ENROLLMENT. 
(a) GRANTS.—Title XXI (42 U.S.C. 1397aa et seq.), 
as amended by section 111, is amended by adding at the 
end the following: 
‘‘SEC. 2113. GRANTS TO IMPROVE OUTREACH AND ENROLL-
MENT. 
‘‘(a) OUTREACH AND ENROLLMENT GRANTS; NA-
TIONAL CAMPAIGN.— 
‘‘(1) IN GENERAL.—From the amounts appro-
priated under subsection (g), subject to paragraph 
(2), the Secretary shall award grants to eligible enti-
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ties during the period of fiscal years 2008 through 
2012 to conduct outreach and enrollment efforts 
that are designed to increase the enrollment and 
participation of eligible children under this title and 
title XIX. 
‘‘(2) TEN PERCENT SET ASIDE FOR NATIONAL 
ENROLLMENT CAMPAIGN.—An amount equal to 10 
percent of such amounts shall be used by the Sec-
retary for expenditures during such period to carry 
out a national enrollment campaign in accordance 
with subsection (h). 
‘‘(b) PRIORITY FOR AWARD OF GRANTS.— 
‘‘(1) IN GENERAL.—In awarding grants under 
subsection (a), the Secretary shall give priority to el-
igible entities that— 
‘‘(A) propose to target geographic areas 
with high rates of— 
‘‘(i) eligible but unenrolled children, 
including such children who reside in rural 
areas; or 
‘‘(ii) racial and ethnic minorities and 
health disparity populations, including 
those proposals that address cultural and 
linguistic barriers to enrollment; and 
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‘‘(B) submit the most demonstrable evi-
dence required under paragraphs (1) and (2) of 
subsection (c). 
‘‘(2) TEN PERCENT SET ASIDE FOR OUTREACH 
TO INDIAN CHILDREN.—An amount equal to 10 per-
cent of the funds appropriated under subsection (g) 
shall be used by the Secretary to award grants to 
Indian Health Service providers and urban Indian 
organizations receiving funds under title V of the In-
dian Health Care Improvement Act (25 U.S.C. 1651 
et seq.) for outreach to, and enrollment of, children 
who are Indians. 
‘‘(c) APPLICATION.—An eligible entity that desires to 
receive a grant under subsection (a) shall submit an appli-
cation to the Secretary in such form and manner, and con-
taining such information, as the Secretary may decide. 
Such application shall include— 
‘‘(1) evidence demonstrating that the entity in-
cludes members who have access to, and credibility 
with, ethnic or low-income populations in the com-
munities in which activities funded under the grant 
are to be conducted; 
‘‘(2) evidence demonstrating that the entity has 
the ability to address barriers to enrollment, such as 
lack of awareness of eligibility, stigma concerns and 
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punitive fears associated with receipt of benefits, 
and other cultural barriers to applying for and re-
ceiving child health assistance or medical assistance; 
‘‘(3) specific quality or outcomes performance 
measures to evaluate the effectiveness of activities 
funded by a grant awarded under this section; and 
‘‘(4) an assurance that the eligible entity 
shall— 
‘‘(A) conduct an assessment of the effec-
tiveness of such activities against the perform-
ance measures; 
‘‘(B) cooperate with the collection and re-
porting of enrollment data and other informa-
tion in order for the Secretary to conduct such 
assessments; and 
‘‘(C) in the case of an eligible entity that 
is not the State, provide the State with enroll-
ment data and other information as necessary 
for the State to make necessary projections of 
eligible children and pregnant women. 
‘‘(d) DISSEMINATION OF ENROLLMENT DATA AND 
INFORMATION DETERMINED FROM EFFECTIVENESS AS-
SESSMENTS; ANNUAL REPORT.—The Secretary shall— 
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‘‘(1) make publicly available the enrollment 
data and information collected and reported in ac-
cordance with subsection (c)(4)(B); and 
‘‘(2) submit an annual report to Congress on 
the outreach and enrollment activities conducted 
with funds appropriated under this section. 
‘‘(e) MAINTENANCE
OF
EFFORT
FOR
STATES 
AWARDED GRANTS; NO STATE MATCH REQUIRED.—In 
the case of a State that is awarded a grant under this 
section— 
‘‘(1) the State share of funds expended for out-
reach and enrollment activities under the State child 
health plan shall not be less than the State share of 
such funds expended in the fiscal year preceding the 
first fiscal year for which the grant is awarded; and 
‘‘(2) no State matching funds shall be required 
for the State to receive a grant under this section. 
‘‘(f) DEFINITIONS.—In this section: 
‘‘(1) ELIGIBLE ENTITY.—The term ‘eligible en-
tity’ means any of the following: 
‘‘(A) A State with an approved child health 
plan under this title. 
‘‘(B) A local government. 
‘‘(C) An Indian tribe or tribal consortium, 
a tribal organization, an urban Indian organiza-
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tion receiving funds under title V of the Indian 
Health Care Improvement Act (25 U.S.C. 1651 
et seq.), or an Indian Health Service provider. 
‘‘(D) A Federal health safety net organiza-
tion. 
‘‘(E) A national, State, local, or commu-
nity-based public or nonprofit private organiza-
tion, including organizations that use commu-
nity health workers or community-based doula 
programs. 
‘‘(F) A faith-based organization or con-
sortia, to the extent that a grant awarded to 
such an entity is consistent with the require-
ments of section 1955 of the Public Health 
Service Act (42 U.S.C. 300x–65) relating to a 
grant award to nongovernmental entities. 
‘‘(G) An elementary or secondary school. 
‘‘(2) FEDERAL HEALTH SAFETY NET ORGANI-
ZATION.—The term ‘Federal health safety net orga-
nization’ means— 
‘‘(A) a Federally-qualified health center (as 
defined in section 1905(l)(2)(B)); 
‘‘(B) a hospital defined as a dispropor-
tionate share hospital for purposes of section 
1923; 
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‘‘(C) a covered entity described in section 
340B(a)(4) of the Public Health Service Act 
(42 U.S.C. 256b(a)(4)); and 
‘‘(D) any other entity or consortium that 
serves children under a federally funded pro-
gram, including the special supplemental nutri-
tion program for women, infants, and children 
(WIC) established under section 17 of the Child 
Nutrition Act of 1966 (42 U.S.C. 1786), the 
Head Start and Early Head Start programs 
under the Head Start Act (42 U.S.C. 9801 et 
seq.), the school lunch program established 
under the Richard B. Russell National School 
Lunch Act, and an elementary or secondary 
school. 
‘‘(3) INDIANS; INDIAN TRIBE; TRIBAL ORGANI-
ZATION; URBAN INDIAN ORGANIZATION.—The terms 
‘Indian’, ‘Indian tribe’, ‘tribal organization’, and 
‘urban Indian organization’ have the meanings given 
such terms in section 4 of the Indian Health Care 
Improvement Act (25 U.S.C. 1603). 
‘‘(4) COMMUNITY HEALTH WORKER.—The term 
‘community health worker’ means an individual who 
promotes health or nutrition within the community 
in which the individual resides— 
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‘‘(A) by serving as a liaison between com-
munities and health care agencies; 
‘‘(B) by providing guidance and social as-
sistance to community residents; 
‘‘(C) by enhancing community residents’ 
ability to effectively communicate with health 
care providers; 
‘‘(D) by providing culturally and linguis-
tically appropriate health or nutrition edu-
cation; 
‘‘(E) by advocating for individual and com-
munity health or nutrition needs; and 
‘‘(F) by providing referral and followup 
services. 
‘‘(g) APPROPRIATION.—There is appropriated, out of 
any money in the Treasury not otherwise appropriated, 
$100,000,000 for the period of fiscal years 2008 through 
2012, for the purpose of awarding grants under this sec-
tion. Amounts appropriated and paid under the authority 
of this section shall be in addition to amounts appro-
priated under section 2104 and paid to States in accord-
ance with section 2105, including with respect to expendi-
tures for outreach activities in accordance with subsections 
(a)(1)(D)(iii) and (c)(2)(C) of that section. 
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‘‘(h) NATIONAL ENROLLMENT CAMPAIGN.—From 
the amounts made available under subsection (a)(2), the 
Secretary shall develop and implement a national enroll-
ment campaign to improve the enrollment of underserved 
child populations in the programs established under this 
title and title XIX. Such campaign may include— 
‘‘(1) the establishment of partnerships with the 
Secretary of Education and the Secretary of Agri-
culture to develop national campaigns to link the eli-
gibility and enrollment systems for the assistance 
programs each Secretary administers that often 
serve the same children; 
‘‘(2) the integration of information about the 
programs established under this title and title XIX 
in public health awareness campaigns administered 
by the Secretary; 
‘‘(3) increased financial and technical support 
for enrollment hotlines maintained by the Secretary 
to ensure that all States participate in such hotlines; 
‘‘(4) the establishment of joint public awareness 
outreach initiatives with the Secretary of Education 
and the Secretary of Labor regarding the impor-
tance of health insurance to building strong commu-
nities and the economy; 
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100 
‘‘(5) the development of special outreach mate-
rials for Native Americans or for individuals with 
limited English proficiency; and 
‘‘(6) such other outreach initiatives as the Sec-
retary determines would increase public awareness of 
the programs under this title and title XIX.’’. 
(b) ENHANCED
ADMINISTRATIVE
FUNDING
FOR 
TRANSLATION
OR INTERPRETATION SERVICES UNDER 
CHIP AND MEDICAID.— 
(1) CHIP.—Section 2105(a)(1) (42 U.S.C. 
1397ee(a)(1)), as amended by section 113, is 
amended— 
(A) in the matter preceding subparagraph 
(A), by inserting ‘‘(or, in the case of expendi-
tures described in subparagraph (D)(iv), the 
higher of 75 percent or the sum of the en-
hanced FMAP plus 5 percentage points)’’ after 
‘‘enhanced FMAP’’; and 
(B) in subparagraph (D)— 
(i) in clause (iii), by striking ‘‘and’’ at 
the end; 
(ii) by redesignating clause (iv) as 
clause (v); and 
(iii) by inserting after clause (iii) the 
following new clause: 
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101 
‘‘(iv) for translation or interpretation 
services in connection with the enrollment 
of, retention of, and use of services under 
this title by, individuals for whom English 
is not their primary language (as found 
necessary by the Secretary for the proper 
and efficient administration of the State 
plan); and’’. 
(2) MEDICAID.— 
(A) USE
OF
MEDICAID
FUNDS.—Section 
1903(a)(2) (42 U.S.C. 1396b(a)(2)) is amended 
by adding at the end the following new sub-
paragraph: 
‘‘(E) an amount equal to 75 percent of so much 
of the sums expended during such quarter (as found 
necessary by the Secretary for the proper and effi-
cient administration of the State plan) as are attrib-
utable to translation or interpretation services in 
connection with the enrollment of, retention of, and 
use of services under this title by, children of fami-
lies for whom English is not the primary language; 
plus’’. 
(B) USE OF COMMUNITY HEALTH WORK-
ERS FOR OUTREACH ACTIVITIES.— 
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102 
(i) IN GENERAL.—Section 2102(c)(1) 
of such Act (42 U.S.C. 1397bb(c)(1)) is 
amended by inserting ‘‘(through commu-
nity health workers and others)’’ after 
‘‘Outreach’’. 
(ii) IN FEDERAL EVALUATION.—Sec-
tion 2108(c)(3)(B) of such Act (42 U.S.C. 
1397hh(c)(3)(B)) is amended by inserting 
‘‘(such as through community health work-
ers and others)’’ after ‘‘including prac-
tices’’. 
SEC. 202. INCREASED OUTREACH AND ENROLLMENT OF IN-
DIANS. 
(a) IN GENERAL.—Section 1139 (42 U.S.C. 1320b– 
9) is amended to read as follows: 
‘‘SEC. 1139. IMPROVED ACCESS TO, AND DELIVERY OF, 
HEALTH CARE FOR INDIANS UNDER TITLES 
XIX AND XXI. 
‘‘(a) AGREEMENTS WITH STATES
FOR MEDICAID 
AND CHIP OUTREACH ON OR NEAR RESERVATIONS TO 
INCREASE
THE ENROLLMENT
OF INDIANS
IN THOSE 
PROGRAMS.— 
‘‘(1) IN GENERAL.—In order to improve the ac-
cess of Indians residing on or near a reservation to 
obtain benefits under the Medicaid and State chil-
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103 
dren’s health insurance programs established under 
titles XIX and XXI, the Secretary shall encourage 
the State to take steps to provide for enrollment on 
or near the reservation. Such steps may include out-
reach efforts such as the outstationing of eligibility 
workers, entering into agreements with the Indian 
Health Service, Indian Tribes, Tribal Organizations, 
and Urban Indian Organizations to provide out-
reach, education regarding eligibility and benefits, 
enrollment, and translation services when such serv-
ices are appropriate. 
‘‘(2) CONSTRUCTION.—Nothing in paragraph 
(1) shall be construed as affecting arrangements en-
tered into between States and the Indian Health 
Service, Indian Tribes, Tribal Organizations, or 
Urban Indian Organizations for such Service, 
Tribes, or Organizations to conduct administrative 
activities under such titles. 
‘‘(b) REQUIREMENT
TO
FACILITATE
COOPERA-
TION.—The Secretary, acting through the Centers for 
Medicare & Medicaid Services, shall take such steps as are 
necessary to facilitate cooperation with, and agreements 
between, States and the Indian Health Service, Indian 
Tribes, Tribal Organizations, or Urban Indian Organiza-
tions with respect to the provision of health care items 
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104 
and services to Indians under the programs established 
under title XIX or XXI. 
‘‘(c) DEFINITION OF INDIAN; INDIAN TRIBE; INDIAN 
HEALTH PROGRAM; TRIBAL ORGANIZATION; URBAN IN-
DIAN ORGANIZATION.—In this section, the terms ‘Indian’, 
‘Indian Tribe’, ‘Indian Health Program’, ‘Tribal Organi-
zation’, and ‘Urban Indian Organization’ have the mean-
ings given those terms in section 4 of the Indian Health 
Care Improvement Act.’’. 
(b) NONAPPLICATION
OF 10 PERCENT LIMIT
ON 
OUTREACH AND CERTAIN OTHER EXPENDITURES.—Sec-
tion 2105(c)(2) (42 U.S.C. 1397ee(c)(2)) is amended by 
adding at the end the following: 
‘‘(C) NONAPPLICATION
TO
CERTAIN
EX-
PENDITURES.—The limitation under subpara-
graph (A) shall not apply with respect to the 
following expenditures: 
‘‘(i) EXPENDITURES
TO
INCREASE 
OUTREACH TO, AND THE ENROLLMENT OF, 
INDIAN CHILDREN UNDER THIS TITLE AND 
TITLE xix.—Expenditures for outreach ac-
tivities to families of Indian children likely 
to be eligible for child health assistance 
under the plan or medical assistance under 
the State plan under title XIX (or under 
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105 
a waiver of such plan), to inform such 
families of the availability of, and to assist 
them in enrolling their children in, such 
plans, including such activities conducted 
under grants, contracts, or agreements en-
tered into under section 1139(a).’’. 
SEC. 203. STATE OPTION TO RELY ON FINDINGS FROM AN 
EXPRESS LANE AGENCY TO CONDUCT SIM-
PLIFIED ELIGIBILITY DETERMINATIONS. 
(a) APPLICATION UNDER MEDICAID AND CHIP PRO-
GRAMS.— 
(1) MEDICAID.—Section 1902(e) (42 U.S.C. 
1396a(e)) is amended by adding at the end the fol-
lowing: 
‘‘(13) EXPRESS LANE OPTION.— 
‘‘(A) IN GENERAL.— 
‘‘(i) OPTION TO USE A FINDING FROM AN 
EXPRESS LANE AGENCY.—At the option of the 
State, the State plan may provide that in deter-
mining eligibility under this title for a child (as 
defined in subparagraph (G)), the State may 
rely on a finding made within a reasonable pe-
riod (as determined by the State) from an Ex-
press Lane agency (as defined in subparagraph 
(F)) when it determines whether a child satis-
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106 
fies one or more components of eligibility for 
medical assistance under this title. The State 
may rely on a finding from an Express Lane 
agency 
notwithstanding 
sections 
1902(a)(46)(B) and 1137(d) and any dif-
ferences in budget unit, disregard, deeming or 
other methodology, if the following require-
ments are met: 
‘‘(I) PROHIBITION ON DETERMINING 
CHILDREN INELIGIBLE FOR COVERAGE.— 
If a finding from an Express Lane agency 
would result in a determination that a 
child does not satisfy an eligibility require-
ment for medical assistance under this title 
and for child health assistance under title 
XXI, the State shall determine eligibility 
for assistance using its regular procedures. 
‘‘(II) NOTICE
REQUIREMENT.—For 
any child who is found eligible for medical 
assistance under the State plan under this 
title or child health assistance under title 
XXI and who is subject to premiums based 
on an Express Lane agency’s finding of 
such child’s income level, the State shall 
provide notice that the child may qualify 
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107 
for lower premium payments if evaluated 
by the State using its regular policies and 
of the procedures for requesting such an 
evaluation. 
‘‘(III) COMPLIANCE
WITH
SCREEN 
AND
ENROLL
REQUIREMENT.—The State 
shall satisfy the requirements under sub-
paragraphs 
(A) 
and 
(B) 
of 
section 
2102(b)(3) (relating to screen and enroll) 
before enrolling a child in child health as-
sistance under title XXI. At its option, the 
State may fulfill such requirements in ac-
cordance with either option provided under 
subparagraph (C) of this paragraph. 
‘‘(IV) VERIFICATION OF CITIZENSHIP 
OR NATIONALITY STATUS.—The State shall 
satisfy 
the 
requirements 
of 
section 
1902(a)(46)(B) or 2105(c)(10), as applica-
ble for verifications of citizenship or na-
tionality status. 
‘‘(V) CODING.—The State meets the 
requirements of subparagraph (E). 
‘‘(ii) OPTION TO APPLY TO RENEWALS AND 
REDETERMINATIONS.—The State may apply the 
provisions of this paragraph when conducting 
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108 
initial determinations of eligibility, redetermina-
tions of eligibility, or both, as described in the 
State plan. 
‘‘(B) RULES OF CONSTRUCTION.—Nothing in 
this paragraph shall be construed— 
‘‘(i) to limit or prohibit a State from tak-
ing any actions otherwise permitted under this 
title or title XXI in determining eligibility for 
or enrolling children into medical assistance 
under this title or child health assistance under 
title XXI; or 
‘‘(ii) to modify the limitations in section 
1902(a)(5) concerning the agencies that may 
make a determination of eligibility for medical 
assistance under this title. 
‘‘(C) OPTIONS FOR SATISFYING THE SCREEN 
AND ENROLL REQUIREMENT.— 
‘‘(i) IN GENERAL.—With respect to a child 
whose eligibility for medical assistance under 
this title or for child health assistance under 
title XXI has been evaluated by a State agency 
using an income finding from an Express Lane 
agency, a State may carry out its duties under 
subparagraphs 
(A) 
and 
(B) 
of 
section 
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109 
2102(b)(3) (relating to screen and enroll) in ac-
cordance with either clause (ii) or clause (iii). 
‘‘(ii) 
ESTABLISHING
A
SCREENING 
THRESHOLD.— 
‘‘(I) IN GENERAL.—Under this clause, 
the State establishes a screening threshold 
set as a percentage of the Federal poverty 
level that exceeds the highest income 
threshold applicable under this title to the 
child by a minimum of 30 percentage 
points or, at State option, a higher number 
of percentage points that reflects the value 
(as determined by the State and described 
in the State plan) of any differences be-
tween income methodologies used by the 
program administered by the Express Lane 
agency and the methodologies used by the 
State in determining eligibility for medical 
assistance under this title. 
‘‘(II) CHILDREN
WITH
INCOME
NOT 
ABOVE THRESHOLD.—If the income of a 
child does not exceed the screening thresh-
old, the child is deemed to satisfy the in-
come eligibility criteria for medical assist-
ance under this title regardless of whether 
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110 
such child would otherwise satisfy such cri-
teria. 
‘‘(III) 
CHILDREN
WITH
INCOME 
ABOVE THRESHOLD.—If the income of a 
child exceeds the screening threshold, the 
child shall be considered to have an income 
above the Medicaid applicable income level 
described in section 2110(b)(4) and to sat-
isfy 
the 
requirement 
under 
section 
2110(b)(1)(C) (relating to the requirement 
that CHIP matching funds be used only 
for children not eligible for Medicaid). If 
such a child is enrolled in child health as-
sistance under title XXI, the State shall 
provide the parent, guardian, or custodial 
relative with the following: 
‘‘(aa) Notice that the child may 
be eligible to receive medical assist-
ance under the State plan under this 
title if evaluated for such assistance 
under the State’s regular procedures 
and notice of the process through 
which a parent, guardian, or custodial 
relative can request that the State 
evaluate the child’s eligibility for med-
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111 
ical assistance under this title using 
such regular procedures. 
‘‘(bb) A description of differences 
between the medical assistance pro-
vided under this title and child health 
assistance under title XXI, including 
differences in cost-sharing require-
ments and covered benefits. 
‘‘(iii) TEMPORARY ENROLLMENT IN CHIP 
PENDING SCREEN AND ENROLL.— 
‘‘(I) IN GENERAL.—Under this clause, 
a State enrolls a child in child health as-
sistance under title XXI for a temporary 
period if the child appears eligible for such 
assistance based on an income finding by 
an Express Lane agency. 
‘‘(II) 
DETERMINATION
OF
ELIGI-
BILITY.—During such temporary enroll-
ment period, the State shall determine the 
child’s eligibility for child health assistance 
under title XXI or for medical assistance 
under this title in accordance with this 
clause. 
‘‘(III) PROMPT FOLLOW UP.—In mak-
ing such a determination, the State shall 
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112 
take prompt action to determine whether 
the child should be enrolled in medical as-
sistance under this title or child health as-
sistance under title XXI pursuant to sub-
paragraphs 
(A) 
and 
(B) 
of 
section 
2102(b)(3) (relating to screen and enroll). 
‘‘(IV) REQUIREMENT FOR SIMPLIFIED 
DETERMINATION.—In making such a de-
termination, the State shall use procedures 
that, to the maximum feasible extent, re-
duce the burden imposed on the individual 
of such determination. Such procedures 
may not require the child’s parent, guard-
ian, or custodial relative to provide or 
verify information that already has been 
provided to the State agency by an Ex-
press Lane agency or another source of in-
formation unless the State agency has rea-
son to believe the information is erroneous. 
‘‘(V) AVAILABILITY OF CHIP MATCH-
ING FUNDS DURING TEMPORARY ENROLL-
MENT
PERIOD.—Medical assistance for 
items and services that are provided to a 
child enrolled in title XXI during a tem-
porary enrollment period under this clause 
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113 
shall be treated as child health assistance 
under such title. 
‘‘(D) OPTION FOR AUTOMATIC ENROLLMENT.— 
‘‘(i) IN GENERAL.—The State may initiate 
and determine eligibility for medical assistance 
under the State Medicaid plan or for child 
health assistance under the State CHIP plan 
without a program application from, or on be-
half of, the child based on data obtained from 
sources other than the child (or the child’s fam-
ily), but a child can only be automatically en-
rolled in the State Medicaid plan or the State 
CHIP plan if the child or the family affirma-
tively consents to being enrolled through affir-
mation and signature on an Express Lane 
agency application, if the requirement of clause 
(ii) is met. 
‘‘(ii) INFORMATION
REQUIREMENT.—The 
requirement of this clause is that the State in-
forms the parent, guardian, or custodial relative 
of the child of the services that will be covered, 
appropriate methods for using such services, 
premium or other cost sharing charges (if any) 
that apply, medical support obligations (under 
section 1912(a)) created by enrollment (if appli-
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114 
cable), and the actions the parent, guardian, or 
relative must take to maintain enrollment and 
renew coverage. 
‘‘(E) CODING; APPLICATION TO ENROLLMENT 
ERROR RATES.— 
‘‘(i) IN GENERAL.—For purposes of sub-
paragraph (A)(iv), the requirement of this sub-
paragraph for a State is that the State agrees 
to— 
‘‘(I) assign such codes as the Sec-
retary shall require to the children who are 
enrolled in the State Medicaid plan or the 
State CHIP plan through reliance on a 
finding made by an Express Lane agency 
for the duration of the State’s election 
under this paragraph; 
‘‘(II) annually provide the Secretary 
with a statistically valid sample (that is ap-
proved by Secretary) of the children en-
rolled in such plans through reliance on 
such a finding by conducting a full Med-
icaid eligibility review of the children iden-
tified for such sample for purposes of de-
termining an eligibility error rate (as de-
scribed in clause (iv)) with respect to the 
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115 
enrollment of such children (and shall not 
include such children in any data or sam-
ples used for purposes of complying with a 
Medicaid 
Eligibility 
Quality 
Control 
(MEQC) review or a payment error rate 
measurement (PERM) requirement); 
‘‘(III) submit the error rate deter-
mined under subclause (II) to the Sec-
retary; 
‘‘(IV) if such error rate exceeds 3 per-
cent for either of the first 2 fiscal years in 
which the State elects to apply this para-
graph, demonstrate to the satisfaction of 
the Secretary the specific corrective actions 
implemented by the State to improve upon 
such error rate; and 
‘‘(V) if such error rate exceeds 3 per-
cent for any fiscal year in which the State 
elects to apply this paragraph, a reduction 
in the amount otherwise payable to the 
State under section 1903(a) for quarters 
for that fiscal year, equal to the total 
amount of erroneous excess payments de-
termined for the fiscal year only with re-
spect to the children included in the sam-
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116 
ple for the fiscal year that are in excess of 
a 3 percent error rate with respect to such 
children. 
‘‘(ii) NO
PUNITIVE
ACTION
BASED
ON 
ERROR RATE.—The Secretary shall not apply 
the error rate derived from the sample under 
clause (i) to the entire population of children 
enrolled in the State Medicaid plan or the State 
CHIP plan through reliance on a finding made 
by an Express Lane agency, or to the popu-
lation of children enrolled in such plans on the 
basis of the State’s regular procedures for de-
termining eligibility, or penalize the State on 
the basis of such error rate in any manner 
other than the reduction of payments provided 
for under clause (i)(V). 
‘‘(iii) RULE OF CONSTRUCTION.—Nothing 
in this paragraph shall be construed as relieving 
a State that elects to apply this paragraph from 
being subject to a penalty under section 
1903(u), for payments made under the State 
Medicaid plan with respect to ineligible individ-
uals and families that are determined to exceed 
the error rate permitted under that section (as 
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117 
determined without regard to the error rate de-
termined under clause (i)(II)). 
‘‘(iv) ERROR RATE DEFINED.—In this sub-
paragraph, the term ‘error rate’ means the rate 
of erroneous excess payments for medical as-
sistance (as defined in section 1903(u)(1)(D)) 
for the period involved, except that such pay-
ments shall be limited to individuals for which 
eligibility determinations are made under this 
paragraph and except that in applying this 
paragraph under title XXI, there shall be sub-
stituted for references to provisions of this title 
corresponding provisions within title XXI. 
‘‘(F) EXPRESS LANE AGENCY.— 
‘‘(i) IN GENERAL.—In this paragraph, the 
term ‘Express Lane agency’ means a public 
agency that— 
‘‘(I) is determined by the State Med-
icaid agency or the State CHIP agency (as 
applicable) to be capable of making the de-
terminations of one or more eligibility re-
quirements 
described 
in 
subparagraph 
(A)(i); 
‘‘(II) is identified in the State Med-
icaid plan or the State CHIP plan; and 
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118 
‘‘(III) notifies the child’s family— 
‘‘(aa) of the information which 
shall be disclosed in accordance with 
this paragraph; 
‘‘(bb) that the information dis-
closed will be used solely for purposes 
of determining eligibility for medical 
assistance under the State Medicaid 
plan or for child health assistance 
under the State CHIP plan; and 
‘‘(cc) that the family may elect to 
not have the information disclosed for 
such purposes; and 
‘‘(IV) enters into, or is subject to, an 
interagency agreement to limit the disclo-
sure and use of the information disclosed. 
‘‘(ii) INCLUSION
OF
SPECIFIC
PUBLIC 
AGENCIES.—Such term includes the following: 
‘‘(I) A public agency that determines 
eligibility for assistance under any of the 
following: 
‘‘(aa) The temporary assistance 
for needy families program funded 
under part A of title IV. 
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119 
‘‘(bb) A State program funded 
under part D of title IV. 
‘‘(cc) The State Medicaid plan. 
‘‘(dd) The State CHIP plan. 
‘‘(ee) The Food Stamp Act of 
1977 (7 U.S.C. 2011 et seq.). 
‘‘(ff) The Head Start Act (42 
U.S.C. 9801 et seq.). 
‘‘(gg) The Richard B. Russell 
National 
School 
Lunch 
Act 
(42 
U.S.C. 1751 et seq.). 
‘‘(hh) The Child Nutrition Act of 
1966 (42 U.S.C. 1771 et seq.). 
‘‘(ii) The Child Care and Devel-
opment Block Grant Act of 1990 (42 
U.S.C. 9858 et seq.). 
‘‘(jj) The Stewart B. McKinney 
Homeless Assistance Act (42 U.S.C. 
11301 et seq.). 
‘‘(kk) The United States Housing 
Act of 1937 (42 U.S.C. 1437 et seq.). 
‘‘(ll) The Native American Hous-
ing Assistance and Self-Determination 
Act of 1996 (25 U.S.C. 4101 et seq.). 
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120 
‘‘(II) A State-specified governmental 
agency that has fiscal liability or legal re-
sponsibility for the accuracy of the eligi-
bility determination findings relied on by 
the State. 
‘‘(III) A public agency that is subject 
to an interagency agreement limiting the 
disclosure and use of the information dis-
closed for purposes of determining eligi-
bility under the State Medicaid plan or the 
State CHIP plan. 
‘‘(iii) EXCLUSIONS.—Such term does not 
include an agency that determines eligibility for 
a program established under the Social Services 
Block Grant established under title XX or a 
private, for-profit organization. 
‘‘(iv) RULES OF CONSTRUCTION.—Nothing 
in this paragraph shall be construed as— 
‘‘(I) exempting a State Medicaid 
agency from complying with the require-
ments of section 1902(a)(4) relating to 
merit-based personnel standards for em-
ployees of the State Medicaid agency and 
safeguards against conflicts of interest); or 
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121 
‘‘(II) authorizing a State Medicaid 
agency that elects to use Express Lane 
agencies under this subparagraph to use 
the Express Lane option to avoid com-
plying with such requirements for purposes 
of making eligibility determinations under 
the State Medicaid plan. 
‘‘(v) ADDITIONAL
DEFINITIONS.—In this 
paragraph: 
‘‘(I) STATE.—The term ‘State’ means 
1 of the 50 States or the District of Co-
lumbia. 
‘‘(II) 
STATE
CHIP
AGENCY.—The 
term ‘State CHIP agency’ means the State 
agency responsible for administering the 
State CHIP plan. 
‘‘(III) STATE CHIP PLAN.—The term 
‘State CHIP plan’ means the State child 
health plan established under title XXI 
and includes any waiver of such plan. 
‘‘(IV) STATE
MEDICAID
AGENCY.— 
The term ‘State Medicaid agency’ means 
the State agency responsible for admin-
istering the State Medicaid plan. 
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122 
‘‘(V) STATE
MEDICAID
PLAN.—The 
term ‘State Medicaid plan’ means the 
State plan established under title XIX and 
includes any waiver of such plan. 
‘‘(G) CHILD DEFINED.—For purposes of this 
paragraph, the term ‘child’ means an individual 
under 19 years of age, or, at the option of a State, 
such higher age, not to exceed 21 years of age, as 
the State may elect. 
‘‘(H) APPLICATION.—This paragraph shall not 
apply to with respect to eligibility determinations 
made after September 30, 2012.’’. 
(2) CHIP.—Section 2107(e)(1) (42 U.S.C. 
1397gg(e)(1)) is amended by redesignating subpara-
graphs (B), (C), and (D) as subparagraphs (C), (D), 
and (E), respectively, and by inserting after sub-
paragraph (A) the following new subparagraph: 
‘‘(B) Section 1902(e)(13) (relating to the 
State option to rely on findings from an Ex-
press Lane agency to help evaluate a child’s eli-
gibility for medical assistance).’’. 
(b) EVALUATION AND REPORT.— 
(1) EVALUATION.—The Secretary shall con-
duct, by grant, contract, or interagency agreement, 
a comprehensive, independent evaluation of the op-
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123 
tion provided under the amendments made by sub-
section (a). Such evaluation shall include an analysis 
of the effectiveness of the option, and shall include— 
(A) obtaining a statistically valid sample of 
the children who were enrolled in the State 
Medicaid plan or the State CHIP plan through 
reliance on a finding made by an Express Lane 
agency and determining the percentage of chil-
dren who were erroneously enrolled in such 
plans; 
(B) determining whether enrolling children 
in such plans through reliance on a finding 
made by an Express Lane agency improves the 
ability of a State to identify and enroll low-in-
come, uninsured children who are eligible but 
not enrolled in such plans; 
(C) evaluating the administrative costs or 
savings related to identifying and enrolling chil-
dren in such plans through reliance on such 
findings, and the extent to which such costs dif-
fer from the costs that the State otherwise 
would have incurred to identify and enroll low- 
income, uninsured children who are eligible but 
not enrolled in such plans; and 
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124 
(D) any recommendations for legislative or 
administrative changes that would improve the 
effectiveness of enrolling children in such plans 
through reliance on such findings. 
(2) REPORT
TO
CONGRESS.—Not later than 
September 30, 2011, the Secretary shall submit a 
report to Congress on the results of the evaluation 
under paragraph (1). 
(3) FUNDING.— 
(A) IN GENERAL.—Out of any funds in the 
Treasury not otherwise appropriated, there is 
appropriated to the Secretary to carry out the 
evaluation under this subsection $5,000,000 for 
the period of fiscal years 2008 through 2011. 
(B) BUDGET AUTHORITY.—Subparagraph 
(A) constitutes budget authority in advance of 
appropriations Act and represents the obliga-
tion of the Federal Government to provide for 
the payment of such amount to conduct the 
evaluation under this subsection. 
(c) ELECTRONIC TRANSMISSION OF INFORMATION.— 
Section 1902 (42 U.S.C. 1396a) is amended by adding 
at the end the following new subsection: 
‘‘(dd) ELECTRONIC TRANSMISSION
OF INFORMA-
TION.—If the State agency determining eligibility for med-
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125 
ical assistance under this title or child health assistance 
under title XXI verifies an element of eligibility based on 
information from an Express Lane Agency (as defined in 
subsection (e)(13)(F)), or from another public agency, 
then the applicant’s signature under penalty of perjury 
shall not be required as to such element. Any signature 
requirement for an application for medical assistance may 
be satisfied through an electronic signature, as defined in 
section 1710(1) of the Government Paperwork Elimi-
nation Act (44 U.S.C. 3504 note). The requirements of 
subparagraphs (A) and (B) of section 1137(d)(2) may be 
met through evidence in digital or electronic form.’’. 
(d) AUTHORIZATION
OF
INFORMATION
DISCLO-
SURE.— 
(1) IN GENERAL.—Title XIX is amended— 
(A) by redesignating section 1939 as sec-
tion 1940; and 
(B) by inserting after section 1938 the fol-
lowing new section: 
‘‘SEC. 1939. AUTHORIZATION TO RECEIVE RELEVANT IN-
FORMATION. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, a Federal or State agency or private entity 
in possession of the sources of data directly relevant to 
eligibility determinations under this title (including eligi-
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126 
bility files maintained by Express Lane agencies described 
in section 1902(e)(13)(F), information described in para-
graph (2) or (3) of section 1137(a), vital records informa-
tion about births in any State, and information described 
in sections 453(i) and 1902(a)(25)(I)) is authorized to 
convey such data or information to the State agency ad-
ministering the State plan under this title, to the extent 
such conveyance meets the requirements of subsection (b). 
‘‘(b) REQUIREMENTS FOR CONVEYANCE.—Data or 
information may be conveyed pursuant to subsection (a) 
only if the following requirements are met: 
‘‘(1) The individual whose circumstances are 
described in the data or information (or such indi-
vidual’s parent, guardian, caretaker relative, or au-
thorized representative) has either provided advance 
consent to disclosure or has not objected to disclo-
sure after receiving advance notice of disclosure and 
a reasonable opportunity to object. 
‘‘(2) Such data or information are used solely 
for the purposes of— 
‘‘(A) identifying individuals who are eligi-
ble or potentially eligible for medical assistance 
under this title and enrolling or attempting to 
enroll such individuals in the State plan; and 
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127 
‘‘(B) verifying the eligibility of individuals 
for medical assistance under the State plan. 
‘‘(3) An interagency or other agreement, con-
sistent with standards developed by the Secretary— 
‘‘(A) prevents the unauthorized use, disclo-
sure, or modification of such data and other-
wise meets applicable Federal requirements 
safeguarding privacy and data security; and 
‘‘(B) requires the State agency admin-
istering the State plan to use the data and in-
formation obtained under this section to seek to 
enroll individuals in the plan. 
‘‘(c) PENALTIES FOR IMPROPER DISCLOSURE.— 
‘‘(1) CIVIL MONEY PENALTY.—A private entity 
described in the subsection (a) that publishes, dis-
closes, or makes known in any manner, or to any ex-
tent not authorized by Federal law, any information 
obtained under this section is subject to a civil 
money penalty in an amount equal to $10,000 for 
each such unauthorized publication or disclosure. 
The provisions of section 1128A (other than sub-
sections (a) and (b) and the second sentence of sub-
section (f)) shall apply to a civil money penalty 
under this paragraph in the same manner as such 
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128 
provisions apply to a penalty or proceeding under 
section 1128A(a). 
‘‘(2) CRIMINAL PENALTY.—A private entity de-
scribed in the subsection (a) that willfully publishes, 
discloses, or makes known in any manner, or to any 
extent not authorized by Federal law, any informa-
tion obtained under this section shall be fined not 
more than $10,000 or imprisoned not more than 1 
year, or both, for each such unauthorized publication 
or disclosure. 
‘‘(d) RULE OF CONSTRUCTION.—The limitations and 
requirements that apply to disclosure pursuant to this sec-
tion shall not be construed to prohibit the conveyance or 
disclosure of data or information otherwise permitted 
under Federal law (without regard to this section).’’. 
(2) CONFORMING AMENDMENT TO TITLE XXI.— 
Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)), as 
amended by subsection (a)(2), is amended by adding 
at the end the following new subparagraph: 
‘‘(F) Section 1939 (relating to authoriza-
tion to receive data directly relevant to eligi-
bility determinations).’’. 
(3) CONFORMING AMENDMENT TO PROVIDE AC-
CESS TO DATA ABOUT ENROLLMENT IN INSURANCE 
FOR PURPOSES OF EVALUATING APPLICATIONS AND 
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129 
FOR
CHIP.—Section 1902(a)(25)(I)(i) (42 U.S.C. 
1396a(a)(25)(I)(i)) is amended— 
(A) by inserting ‘‘(and, at State option, in-
dividuals who apply or whose eligibility for med-
ical assistance is being evaluated in accordance 
with section 1902(e)(13)(D))’’ after ‘‘with re-
spect to individuals who are eligible’’; and 
(B) by inserting ‘‘under this title (and, at 
State option, child health assistance under title 
XXI)’’ after ‘‘the State plan’’. 
(e) AUTHORIZATION
FOR STATES ELECTING EX-
PRESS LANE OPTION TO RECEIVE CERTAIN DATA DI-
RECTLY RELEVANT TO DETERMINING ELIGIBILITY AND 
CORRECT AMOUNT OF ASSISTANCE.—The Secretary shall 
enter into such agreements as are necessary to permit a 
State that elects the Express Lane option under section 
1902(e)(13) of the Social Security Act to receive data di-
rectly relevant to eligibility determinations and deter-
mining the correct amount of benefits under a State child 
health plan under CHIP or a State plan under Medicaid 
from the following: 
(1) The National Directory of New Hires estab-
lished under section 453(i) of the Social Security 
Act (42 U.S.C. 653(i)). 
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130 
(2) Data regarding enrollment in insurance that 
may help to facilitate outreach and enrollment under 
the State Medicaid plan, the State CHIP plan, and 
such other programs as the Secretary may specify. 
(f) EFFECTIVE DATE.—The amendments made by 
this section are effective on January 1, 2008. 
Subtitle B—Reducing Barriers to 
Enrollment 
SEC. 211. VERIFICATION OF DECLARATION OF CITIZENSHIP 
OR NATIONALITY FOR PURPOSES OF ELIGI-
BILITY FOR MEDICAID AND CHIP. 
(a) 
ALTERNATIVE
STATE
PROCESS
FOR 
VERIFICATION OF DECLARATION OF CITIZENSHIP OR NA-
TIONALITY FOR PURPOSES OF ELIGIBILITY FOR MED-
ICAID.— 
(1) ALTERNATIVE
TO
DOCUMENTATION
RE-
QUIREMENT.— 
(A) IN
GENERAL.—Section 1902 (42 
U.S.C. 1396a), as amended by section 203(c), 
is amended— 
(i) in subsection (a)(46)— 
(I) by inserting ‘‘(A)’’ after 
‘‘(46)’’; 
(II) by adding ‘‘and’’ after the 
semicolon; and 
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131 
(III) by adding at the end the 
following new subparagraph: 
‘‘(B) provide, with respect to an individual de-
claring to be a citizen or national of the United 
States for purposes of establishing eligibility under 
this title, that the State shall satisfy the require-
ments of— 
‘‘(i) section 1903(x); or 
‘‘(ii) subsection (ee);’’; and 
(ii) by adding at the end the following 
new subsection: 
‘‘(ee)(1) For purposes of subsection (a)(46)(B)(ii), 
the requirements of this subsection with respect to an indi-
vidual declaring to be a citizen or national of the United 
States for purposes of establishing eligibility under this 
title, are, in lieu of requiring the individual to present sat-
isfactory documentary evidence of citizenship or nation-
ality under section 1903(x) (if the individual is not de-
scribed in paragraph (2) of that section), as follows: 
‘‘(A) The State submits the name and social se-
curity number of the individual to the Commissioner 
of Social Security as part of the program established 
under paragraph (2). 
‘‘(B) If the State receives notice from the Com-
missioner of Social Security that the name or social 
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132 
security number, or the declaration of citizenship or 
nationality, of the individual is inconsistent with in-
formation in the records maintained by the Commis-
sioner— 
‘‘(i) the State makes a reasonable effort to 
identify and address the causes of such incon-
sistency, including through typographical or 
other clerical errors, by contacting the indi-
vidual to confirm the accuracy of the name or 
social security number submitted or declaration 
of citizenship or nationality and by taking such 
additional actions as the Secretary, through 
regulation or other guidance, or the State may 
identify, and continues to provide the individual 
with medical assistance while making such ef-
fort; and 
‘‘(ii) in the case such inconsistency is not 
resolved under clause (i), the State— 
‘‘(I) notifies the individual of such 
fact; 
‘‘(II) provides the individual with a 
period of 90 days from the date on which 
the notice required under subclause (I) is 
received by the individual to either present 
satisfactory documentary evidence of citi-
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133 
zenship or nationality (as defined in sec-
tion 1903(x)(3)) or resolve the inconsist-
ency with the Commissioner of Social Se-
curity (and continues to provide the indi-
vidual with medical assistance during such 
90-day period); and 
‘‘(III) disenrolls the individual from 
the State plan under this title within 30 
days after the end of such 90-day period if 
no such documentary evidence is presented 
or if such inconsistency is not resolved. 
‘‘(2)(A) Each State electing to satisfy the require-
ments of this subsection for purposes of section 
1902(a)(46)(B) shall establish a program under which the 
State submits at least monthly to the Commissioner of So-
cial Security for comparison of the name and social secu-
rity number, of each individual newly enrolled in the State 
plan under this title that month who is not described in 
section 1903(x)(2) and who declares to be a United States 
citizen or national, with information in records maintained 
by the Commissioner. 
‘‘(B) In establishing the State program under this 
paragraph, the State may enter into an agreement with 
the Commissioner of Social Security— 
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134 
‘‘(i) to provide, through an on-line system or 
otherwise, for the electronic submission of, and re-
sponse to, the information submitted under subpara-
graph (A) for an individual enrolled in the State 
plan under this title who declares to be citizen or na-
tional on at least a monthly basis; or 
‘‘(ii) to provide for a determination of the con-
sistency of the information submitted with the infor-
mation maintainted in the records of the Commis-
sioner through such other method as agreed to by 
the State and the Commissioner and approved by 
the Secretary, provided that such method is no more 
burdensome for individuals to comply with than any 
burdens that may apply under a method described in 
clause (i). 
‘‘(C) The program established under this paragraph 
shall provide that, in the case of any individual who is 
required to submit a social security number to the State 
under subparagraph (A) and who is unable to provide the 
State with such number, shall be provided with at least 
the reasonable opportunity to present satisfactory docu-
mentary evidence of citizenship or nationality (as defined 
in section 1903(x)(3)) as is provided under clauses (i) and 
(ii) of section 1137(d)(4)(A) to an individual for the sub-
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135 
mittal to the State of evidence indicating a satisfactory 
immigration status. 
‘‘(3)(A) The State agency implementing the plan ap-
proved under this title shall, at such times and in such 
form as the Secretary may specify, provide information on 
the percentage each month that the inconsistent submis-
sions bears to the total submissions made for comparison 
for such month. For purposes of this subparagraph, a 
name, social security number, or declaration of citizenship 
or nationality of an individual shall be treated as incon-
sistent and included in the determination of such percent-
age only if— 
‘‘(i) the information submitted by the individual 
is not consistent with information in records main-
tained by the Commissioner of Social Security; 
‘‘(ii) the inconsistency is not resolved by the 
State; 
‘‘(iii) the individual was provided with a reason-
able period of time to resolve the inconsistency with 
the Commissioner of Social Security or provide satis-
factory documentation of citizenship status and did 
not successfully resolve such inconsistency; and 
‘‘(iv) payment has been made for an item or 
service furnished to the individual under this title. 
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136 
‘‘(B) If, for any fiscal year, the average monthly per-
centage determined under subparagraph (A) is greater 
than 3 percent— 
‘‘(i) the State shall develop and adopt a correc-
tive plan to review its procedures for verifying the 
identities of individuals seeking to enroll in the State 
plan under this title and to identify and implement 
changes in such procedures to improve their accu-
racy; and 
‘‘(ii) pay to the Secretary an amount equal to 
the amount which bears the same ratio to the total 
payments under the State plan for the fiscal year for 
providing medical assistance to individuals who pro-
vided inconsistent information as the number of in-
dividuals with inconsistent information in excess of 
3 percent of such total submitted bears to the total 
number of individuals with inconsistent information. 
‘‘(C) The Secretary may waive, in certain limited 
cases, all or part of the payment under subparagraph 
(B)(ii) if the State is unable to reach the allowable error 
rate despite a good faith effort by such State. 
‘‘(D) Subparagraph (A) and (B) shall not apply to 
a State for a fiscal year if there is an agreement described 
in paragraph (2)(B) in effect as of the close of the fiscal 
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137 
year that provides for the submission on a real-time basis 
of the information described in such paragraph. 
‘‘(4) Nothing in this subsection shall affect the rights 
of any individual under this title to appeal any 
disenrollment from a State plan.’’. 
(B) COSTS OF IMPLEMENTING AND MAIN-
TAINING
SYSTEM.—Section 
1903(a)(3) 
(42 
U.S.C. 1396b(a)(3)) is amended— 
(i) by striking ‘‘plus’’ at the end of 
subparagraph (E) and inserting ‘‘and’’, 
and 
(ii) by adding at the end the following 
new subparagraph: 
‘‘(F)(i) 90 percent of the sums expended 
during the quarter as are attributable to the de-
sign, development, or installation of such 
mechanized verification and information re-
trieval systems as the Secretary determines are 
necessary to implement section 1902(ee) (in-
cluding a system described in paragraph (2)(B) 
thereof), and 
‘‘(ii) 75 percent of the sums expended dur-
ing the quarter as are attributable to the oper-
ation of systems to which clause (i) applies, 
plus’’. 
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138 
(2) LIMITATION ON WAIVER AUTHORITY.—Not-
withstanding any provision of section 1115 of the 
Social Security Act (42 U.S.C. 1315), or any other 
provision of law, the Secretary may not waive the re-
quirements of section 1902(a)(46)(B) of such Act 
(42 U.S.C. 1396a(a)(46)(B)) with respect to a 
State. 
(3) CONFORMING AMENDMENTS.—Section 1903 
(42 U.S.C. 1396b) is amended— 
(A) in subsection (i)(22), by striking ‘‘sub-
section 
(x)’’ 
and 
inserting 
‘‘section 
1902(a)(46)(B)’’; and 
(B) in subsection (x)(1), by striking ‘‘sub-
section 
(i)(22)’’ 
and 
inserting 
‘‘section 
1902(a)(46)(B)(i)’’. 
(4) APPROPRIATION.—Out of any money in the 
Treasury of the United States not otherwise appro-
priated, there are appropriated to the Commissioner 
of Social Security $5,000,000 to remain available 
until expended to carry out the Commissioner’s re-
sponsibilities under section 1902(ee) of the Social 
Security Act, as added by subsection (a). 
(b) CLARIFICATION OF REQUIREMENTS RELATING 
TO PRESENTATION
OF SATISFACTORY DOCUMENTARY 
EVIDENCE OF CITIZENSHIP OR NATIONALITY.— 
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139 
(1) ACCEPTANCE OF DOCUMENTARY EVIDENCE 
ISSUED
BY
A
FEDERALLY
RECOGNIZED
INDIAN 
TRIBE.—Section 
1903(x)(3)(B) 
(42 
U.S.C. 
1396b(x)(3)(B)) is amended— 
(A) by redesignating clause (v) as clause 
(vi); and 
(B) by inserting after clause (iv), the fol-
lowing new clause: 
‘‘(v)(I) Except as provided in subclause (II), a 
document issued by a federally recognized Indian 
tribe evidencing membership or enrollment in, or af-
filiation with, such tribe (such as a tribal enrollment 
card or certificate of degree of Indian blood). 
‘‘(II) With respect to those federally recognized 
Indian tribes located within States having an inter-
national border whose membership includes individ-
uals who are not citizens of the United States, the 
Secretary shall, after consulting with such tribes, 
issue regulations authorizing the presentation of 
such other forms of documentation (including tribal 
documentation, if appropriate) that the Secretary 
determines to be satisfactory documentary evidence 
of citizenship or nationality for purposes of satis-
fying the requirement of this subsection.’’. 
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140 
(2) REQUIREMENT
TO
PROVIDE
REASONABLE 
OPPORTUNITY
TO
PRESENT
SATISFACTORY
DOCU-
MENTARY EVIDENCE.—Section 1903(x) (42 U.S.C. 
1396b(x)) is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(4) In the case of an individual declaring to be a 
citizen or national of the United States with respect to 
whom a State requires the presentation of satisfactory 
documentary evidence of citizenship or nationality under 
section 1902(a)(46)(B)(i), the individual shall be provided 
at least the reasonable opportunity to present satisfactory 
documentary evidence of citizenship or nationality under 
this subsection as is provided under clauses (i) and (ii) 
of section 1137(d)(4)(A) to an individual for the submittal 
to the State of evidence indicating a satisfactory immigra-
tion status.’’. 
(3) CHILDREN BORN IN THE UNITED STATES 
TO MOTHERS ELIGIBLE FOR MEDICAID.— 
(A) CLARIFICATION
OF
RULES.—Section 
1903(x) (42 U.S.C. 1396b(x)), as amended by 
paragraph (2), is amended— 
(i) in paragraph (2)— 
(I) in subparagraph (C), by strik-
ing ‘‘or’’ at the end; 
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141 
(II) by redesignating subpara-
graph (D) as subparagraph (E); and 
(III) by inserting after subpara-
graph (C) the following new subpara-
graph: 
‘‘(D) pursuant to the application of section 
1902(e)(4) (and, in the case of an individual who is 
eligible for medical assistance on such basis, the in-
dividual shall be deemed to have provided satisfac-
tory documentary evidence of citizenship or nation-
ality and shall not be required to provide further 
documentary evidence on any date that occurs dur-
ing or after the period in which the individual is eli-
gible for medical assistance on such basis); or’’; and 
(ii) by adding at the end the following 
new paragraph: 
‘‘(5) Nothing in subparagraph (A) or (B) of section 
1902(a)(46), the preceding paragraphs of this subsection, 
or the Deficit Reduction Act of 2005, including section 
6036 of such Act, shall be construed as changing the re-
quirement of section 1902(e)(4) that a child born in the 
United States to an alien mother for whom medical assist-
ance for the delivery of such child is available as treatment 
of an emergency medical condition pursuant to subsection 
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142 
(v) shall be deemed eligible for medical assistance during 
the first year of such child’s life.’’. 
(B) STATE REQUIREMENT TO ISSUE SEPA-
RATE
IDENTIFICATION
NUMBER.—Section 
1902(e)(4) (42 U.S.C. 1396a(e)(4)) is amended 
by adding at the end the following new sen-
tence: ‘‘Notwithstanding the preceding sentence, 
in the case of a child who is born in the United 
States to an alien mother for whom medical as-
sistance for the delivery of the child is made 
available pursuant to section 1903(v), the State 
immediately shall issue a separate identification 
number for the child upon notification by the 
facility at which such delivery occurred of the 
child’s birth.’’. 
(4) 
TECHNICAL
AMENDMENTS.—Section 
1903(x)(2) (42 U.S.C. 1396b(x)) is amended— 
(A) in subparagraph (B)— 
(i) by realigning the left margin of the 
matter preceding clause (i) 2 ems to the 
left; and 
(ii) by realigning the left margins of 
clauses (i) and (ii), respectively, 2 ems to 
the left; and 
(B) in subparagraph (C)— 
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143 
(i) by realigning the left margin of the 
matter preceding clause (i) 2 ems to the 
left; and 
(ii) by realigning the left margins of 
clauses (i) and (ii), respectively, 2 ems to 
the left. 
(c) APPLICATION OF DOCUMENTATION SYSTEM TO 
CHIP.— 
(1) IN GENERAL.—Section 2105(c) (42 U.S.C. 
1397ee(c)), as amended by sections 114(a) and 
116(c), is amended by adding at the end the fol-
lowing new paragraph: 
‘‘(10) CITIZENSHIP DOCUMENTATION REQUIRE-
MENTS.— 
‘‘(A) IN GENERAL.—No payment may be 
made under this section with respect to an indi-
vidual who has, or is, declared to be a citizen 
or national of the United States for purposes of 
establishing eligibility under this title unless the 
State meets the requirements of section 
1902(a)(46)(B) with respect to the individual. 
‘‘(B) ENHANCED
PAYMENTS.—Notwith-
standing subsection (b), the enhanced FMAP 
with respect to payments under subsection (a) 
for expenditures described in clause (i) or (ii) of 
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144 
section 1903(a)(3)(F) necessary to comply with 
subparagraph (A) shall in no event be less than 
90 percent and 75 percent, respectively.’’. 
(2) NONAPPLICATION OF ADMINISTRATIVE EX-
PENDITURES
CAP.—Section 
2105(c)(2)(C) 
(42 
U.S.C. 1397ee(c)(2)(C)), as amended by section 
202(b), is amended by adding at the end the fol-
lowing: 
‘‘(ii) 
EXPENDITURES
TO
COMPLY 
WITH
CITIZENSHIP
OR
NATIONALITY 
VERIFICATION
REQUIREMENTS.—Expendi-
tures necessary for the State to comply 
with paragraph (9)(A).’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.— 
(A) IN GENERAL.—Except as provided in 
subparagraph (B), the amendments made by 
this section shall take effect on October 1, 
2008. 
(B) 
TECHNICAL
AMENDMENTS.—The 
amendments made by— 
(i) paragraphs (1), (2), and (3) of 
subsection (b) shall take effect as if in-
cluded in the enactment of section 6036 of 
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145 
the Deficit Reduction Act of 2005 (Public 
Law 109–171; 120 Stat. 80); and 
(ii) paragraph (4) of subsection (b) 
shall take effect as if included in the enact-
ment of section 405 of division B of the 
Tax Relief and Health Care Act of 2006 
(Public Law 109–432; 120 Stat. 2996). 
(2) RESTORATION
OF
ELIGIBILITY.—In the 
case of an individual who, during the period that 
began on July 1, 2006, and ends on October 1, 
2008, was determined to be ineligible for medical as-
sistance under a State Medicaid plan, including any 
waiver of such plan, solely as a result of the applica-
tion of subsections (i)(22) and (x) of section 1903 
of the Social Security Act (as in effect during such 
period), but who would have been determined eligible 
for such assistance if such subsections, as amended 
by subsection (b), had applied to the individual, a 
State may deem the individual to be eligible for such 
assistance as of the date that the individual was de-
termined to be ineligible for such medical assistance 
on such basis. 
(3) SPECIAL TRANSITION RULE FOR INDIANS.— 
During the period that begins on July 1, 2006, and 
ends on the effective date of final regulations issued 
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146 
under subclause (II) of section 1903(x)(3)(B)(v) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1396b(x)(3)(B)(v)) 
(as 
added 
by 
subsection 
(b)(1)(B)), an individual who is a member of a fed-
erally-recognized Indian tribe described in subclause 
(II) of that section who presents a document de-
scribed in subclause (I) of such section that is issued 
by such Indian tribe, shall be deemed to have pre-
sented satisfactory evidence of citizenship or nation-
ality for purposes of satisfying the requirement of 
subsection (x) of section 1903 of such Act. 
SEC. 212. REDUCING ADMINISTRATIVE BARRIERS TO EN-
ROLLMENT. 
Section 2102(b) (42 U.S.C. 1397bb(b)) is amended— 
(1) by redesignating paragraph (4) as para-
graph (5); and 
(2) by inserting after paragraph (3) the fol-
lowing new paragraph: 
‘‘(4) REDUCTION
OF
ADMINISTRATIVE
BAR-
RIERS TO ENROLLMENT.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), the plan shall include a description 
of the procedures used to reduce administrative 
barriers to the enrollment of children and preg-
nant women who are eligible for medical assist-
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147 
ance under title XIX or for child health assist-
ance or health benefits coverage under this title. 
Such procedures shall be established and re-
vised as often as the State determines appro-
priate to take into account the most recent in-
formation available to the State identifying 
such barriers. 
‘‘(B) DEEMED COMPLIANCE IF JOINT AP-
PLICATION AND RENEWAL PROCESS THAT PER-
MITS APPLICATION OTHER THAN IN PERSON.— 
A State shall be deemed to comply with sub-
paragraph (A) if the State’s application and re-
newal forms and supplemental forms (if any) 
and information verification process is the same 
for purposes of establishing and renewing eligi-
bility for children and pregnant women for 
medical assistance under title XIX and child 
health assistance under this title, and such 
process does not require an application to be 
made in person or a face-to-face interview.’’. 
SEC. 213. MODEL OF INTERSTATE COORDINATED ENROLL-
MENT AND COVERAGE PROCESS. 
(a) IN GENERAL.—In order to assure continuity of 
coverage of low-income children under the Medicaid pro-
gram and the State Children’s Health Insurance Program 
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148 
(CHIP), not later than 18 months after the date of the 
enactment of this Act, the Secretary of Health and 
Human Services, in consultation with State Medicaid and 
CHIP directors and organizations representing program 
beneficiaries, shall develop a model process for the coordi-
nation of the enrollment, retention, and coverage under 
such programs of children who, because of migration of 
families, emergency evacuations, natural or other disas-
ters, public health emergencies, educational needs, or oth-
erwise, frequently change their State of residency or other-
wise are temporarily located outside of the State of their 
residency. 
(b) REPORT TO CONGRESS.—After development of 
such model process, the Secretary of Health and Human 
Services shall submit to Congress a report describing addi-
tional steps or authority needed to make further improve-
ments to coordinate the enrollment, retention, and cov-
erage under CHIP and Medicaid of children described in 
subsection (a). 
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149 
TITLE III—REDUCING BARRIERS 
TO PROVIDING PREMIUM AS-
SISTANCE 
Subtitle A—Additional State Op-
tion for Providing Premium As-
sistance 
SEC. 301. ADDITIONAL STATE OPTION FOR PROVIDING 
PREMIUM ASSISTANCE. 
(a) CHIP.— 
(1) IN GENERAL.—Section 2105(c) (42 U.S.C. 
1397ee(c)), as amended by sections 114(a), 116(c), 
and 211(c), is amended by adding at the end the fol-
lowing: 
‘‘(11) STATE OPTION TO OFFER PREMIUM AS-
SISTANCE.— 
‘‘(A) IN GENERAL.—A State may elect to 
offer a premium assistance subsidy (as defined 
in subparagraph (C)) for qualified employer- 
sponsored coverage (as defined in subparagraph 
(B)) to all targeted low-income children who are 
eligible for child health assistance under the 
plan and have access to such coverage in ac-
cordance with the requirements of this para-
graph. No subsidy shall be provided to a tar-
geted low-income child under this paragraph 
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150 
unless the child (or the child’s parent) volun-
tarily elects to receive such a subsidy. A State 
may not require such an election as a condition 
of receipt of child health assistance. 
‘‘(B) QUALIFIED
EMPLOYER-SPONSORED 
COVERAGE.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), in this paragraph, the term ‘qualified 
employer-sponsored coverage’ means a 
group health plan or health insurance cov-
erage offered through an employer— 
‘‘(I) that qualifies as creditable 
coverage as a group health plan under 
section 2701(c)(1) of the Public 
Health Service Act; 
‘‘(II) for which the employer con-
tribution toward any premium for 
such coverage is at least 40 percent; 
and 
‘‘(III) that is offered to all indi-
viduals in a manner that would be 
considered a nondiscriminatory eligi-
bility classification for purposes of 
paragraph (3)(A)(ii) of section 105(h) 
of the Internal Revenue Code of 1986 
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151 
(but determined without regard to 
clause (i) of subparagraph (B) of such 
paragraph). 
‘‘(ii) EXCEPTION.—Such term does 
not include coverage consisting of— 
‘‘(I) benefits provided under a 
health flexible spending arrangement 
(as defined in section 106(c)(2) of the 
Internal Revenue Code of 1986); or 
‘‘(II) a high deductible health 
plan (as defined in section 223(c)(2) 
of such Code), without regard to 
whether the plan is purchased in con-
junction with a health savings account 
(as defined under section 223(d) of 
such Code). 
‘‘(C) PREMIUM ASSISTANCE SUBSIDY.— 
‘‘(i) IN GENERAL.—In this paragraph, 
the term ‘premium assistance subsidy’ 
means, with respect to a targeted low-in-
come child, the amount equal to the dif-
ference between the employee contribution 
required for enrollment only of the em-
ployee under qualified employer-sponsored 
coverage and the employee contribution re-
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152 
quired for enrollment of the employee and 
the child in such coverage, less any appli-
cable premium cost-sharing applied under 
the State child health plan (subject to the 
limitations imposed under section 2103(e), 
including the requirement to count the 
total amount of the employee contribution 
required for enrollment of the employee 
and the child in such coverage toward the 
annual aggregate cost-sharing limit applied 
under paragraph (3)(B) of such section). 
‘‘(ii) STATE
PAYMENT
OPTION.—A 
State may provide a premium assistance 
subsidy either as reimbursement to an em-
ployee for out-of-pocket expenditures or, 
subject to clause (iii), directly to the em-
ployee’s employer. 
‘‘(iii) EMPLOYER OPT-OUT.—An em-
ployer may notify a State that it elects to 
opt-out of being directly paid a premium 
assistance subsidy on behalf of an em-
ployee. In the event of such a notification, 
an employer shall withhold the total 
amount of the employee contribution re-
quired for enrollment of the employee and 
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153 
the child in the qualified employer-spon-
sored coverage and the State shall pay the 
premium assistance subsidy directly to the 
employee. 
‘‘(iv) TREATMENT AS CHILD HEALTH 
ASSISTANCE.—Expenditures for the provi-
sion of premium assistance subsidies shall 
be considered child health assistance de-
scribed in paragraph (1)(C) of subsection 
(a) for purposes of making payments 
under that subsection. 
‘‘(D) APPLICATION OF SECONDARY PAYOR 
RULES.—The State shall be a secondary payor 
for any items or services provided under the 
qualified employer-sponsored coverage for which 
the State provides child health assistance under 
the State child health plan. 
‘‘(E) REQUIREMENT TO PROVIDE SUPPLE-
MENTAL COVERAGE FOR BENEFITS AND COST- 
SHARING PROTECTION PROVIDED UNDER THE 
STATE CHILD HEALTH PLAN.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
section 2110(b)(1)(C), the State shall pro-
vide for each targeted low-income child en-
rolled in qualified employer-sponsored cov-
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154 
erage, supplemental coverage consisting 
of— 
‘‘(I) items or services that are 
not covered, or are only partially cov-
ered, under the qualified employer- 
sponsored coverage; and 
‘‘(II) cost-sharing protection con-
sistent with section 2103(e). 
‘‘(ii) RECORD
KEEPING
REQUIRE-
MENTS.—For purposes of carrying out 
clause (i), a State may elect to directly pay 
out-of-pocket expenditures for cost-sharing 
imposed under the qualified employer-spon-
sored coverage and collect or not collect all 
or any portion of such expenditures from 
the parent of the child. 
‘‘(F) APPLICATION
OF
WAITING
PERIOD 
IMPOSED UNDER THE STATE.—Any waiting pe-
riod imposed under the State child health plan 
prior to the provision of child health assistance 
to a targeted low-income child under the State 
plan shall apply to the same extent to the provi-
sion of a premium assistance subsidy for the 
child under this paragraph. 
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155 
‘‘(G) 
OPT-OUT
PERMITTED
FOR
ANY 
MONTH.—A State shall establish a process for 
permitting the parent of a targeted low-income 
child receiving a premium assistance subsidy to 
disenroll the child from the qualified employer- 
sponsored coverage and enroll the child in, and 
receive child health assistance under, the State 
child health plan, effective on the first day of 
any month for which the child is eligible for 
such assistance and in a manner that ensures 
continuity of coverage for the child. 
‘‘(H) APPLICATION
TO
PARENTS.—If a 
State provides child health assistance or health 
benefits coverage to parents of a targeted low- 
income 
child 
in 
accordance 
with 
section 
2111(b), the State may elect to offer a pre-
mium assistance subsidy to a parent of a tar-
geted low-income child who is eligible for such 
a subsidy under this paragraph in the same 
manner as the State offers such a subsidy for 
the enrollment of the child in qualified em-
ployer-sponsored coverage, except that— 
‘‘(i) the amount of the premium as-
sistance subsidy shall be increased to take 
into account the cost of the enrollment of 
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156 
the parent in the qualified employer-spon-
sored coverage or, at the option of the 
State if the State determines it cost-effec-
tive, the cost of the enrollment of the 
child’s family in such coverage; and 
‘‘(ii) any reference in this paragraph 
to a child is deemed to include a reference 
to the parent or, if applicable under clause 
(i), the family of the child. 
‘‘(I) ADDITIONAL STATE OPTION FOR PRO-
VIDING PREMIUM ASSISTANCE.— 
‘‘(i) IN GENERAL.—A State may es-
tablish an employer-family premium assist-
ance purchasing pool for employers with 
less than 250 employees who have at least 
1 employee who is a pregnant woman eligi-
ble for assistance under the State child 
health plan (including through the applica-
tion of an option described in section 
2112(f)) or a member of a family with at 
least 1 targeted low-income child and to 
provide a premium assistance subsidy 
under this paragraph for enrollment in 
coverage made available through such pool. 
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157 
‘‘(ii) ACCESS
TO
CHOICE
OF
COV-
ERAGE.—A State that elects the option 
under clause (i) shall identify and offer ac-
cess to not less than 2 private health plans 
that are health benefits coverage that is 
equivalent to the benefits coverage in a 
benchmark benefit package described in 
section 2103(b) or benchmark-equivalent 
coverage that meets the requirements of 
section 2103(a)(2) for employees described 
in clause (i). 
‘‘(iii) CLARIFICATION
OF
PAYMENT 
FOR
ADMINISTRATIVE
EXPENDITURES.— 
Nothing in this subparagraph shall be con-
strued as permitting payment under this 
section for administrative expenditures at-
tributable to the establishment or oper-
ation of such pool, except to the extent 
that such payment would otherwise be per-
mitted under this title. 
‘‘(J) NO EFFECT ON PREMIUM ASSISTANCE 
WAIVER
PROGRAMS.—Nothing in this para-
graph shall be construed as limiting the author-
ity of a State to offer premium assistance under 
section 1906 or 1906A, a waiver described in 
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158 
paragraph (2)(B) or (3), a waiver approved 
under section 1115, or other authority in effect 
prior to the date of enactment of the Children’s 
Health Insurance Program Reauthorization Act 
of 2007. 
‘‘(K) NOTICE
OF
AVAILABILITY.—If a 
State elects to provide premium assistance sub-
sidies in accordance with this paragraph, the 
State shall— 
‘‘(i) include on any application or en-
rollment form for child health assistance a 
notice of the availability of premium assist-
ance subsidies for the enrollment of tar-
geted low-income children in qualified em-
ployer-sponsored coverage; 
‘‘(ii) provide, as part of the applica-
tion and enrollment process under the 
State child health plan, information de-
scribing the availability of such subsidies 
and how to elect to obtain such a subsidy; 
and 
‘‘(iii) establish such other procedures 
as the State determines necessary to en-
sure that parents are fully informed of the 
choices for receiving child health assistance 
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159 
under the State child health plan or 
through the receipt of premium assistance 
subsidies. 
‘‘(L) APPLICATION
TO
QUALIFIED
EM-
PLOYER-SPONSORED BENCHMARK COVERAGE.— 
If a group health plan or health insurance cov-
erage offered through an employer is certified 
by an actuary as health benefits coverage that 
is equivalent to the benefits coverage in a 
benchmark benefit package described in section 
2103(b) or benchmark-equivalent coverage that 
meets the requirements of section 2103(a)(2), 
the State may provide premium assistance sub-
sidies for enrollment of targeted low-income 
children in such group health plan or health in-
surance coverage in the same manner as such 
subsidies are provided under this paragraph for 
enrollment in qualified employer-sponsored cov-
erage, but without regard to the requirement to 
provide supplemental coverage for benefits and 
cost-sharing protection provided under the 
State child health plan under subparagraph 
(E). 
‘‘(M) SATISFACTION OF COST-EFFECTIVE-
NESS TEST.—Premium assistance subsidies for 
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160 
qualified employer-sponsored coverage offered 
under this paragraph shall be deemed to meet 
the requirement of subparagraph (A) of para-
graph (3). 
‘‘(N) COORDINATION WITH MEDICAID.—In 
the case of a targeted low-income child who re-
ceives child health assistance through a State 
plan under title XIX and who voluntarily elects 
to receive a premium assistance subsidy under 
this section, the provisions of section 1906A 
shall apply and shall supersede any other provi-
sions of this paragraph that are inconsistent 
with such section.’’. 
(2) DETERMINATION OF COST-EFFECTIVENESS 
FOR PREMIUM ASSISTANCE OR PURCHASE OF FAM-
ILY COVERAGE.— 
(A) IN GENERAL.—Section 2105(c)(3)(A) 
(42 U.S.C. 1397ee(c)(3)(A)) is amended by 
striking ‘‘relative to’’ and all that follows 
through the comma and inserting ‘‘relative to 
‘‘(i) the amount of expenditures under 
the State child health plan, including ad-
ministrative expenditures, that the State 
would have made to provide comparable 
coverage of the targeted low-income child 
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161 
involved or the family involved (as applica-
ble); or 
‘‘(ii) the aggregate amount of expendi-
tures that the State would have made 
under the State child health plan, includ-
ing administrative expenditures, for pro-
viding coverage under such plan for all 
such children or families.’’. 
(B) NONAPPLICATION TO PREVIOUSLY AP-
PROVED COVERAGE.—The amendment made by 
subparagraph (A) shall not apply to coverage 
the purchase of which has been approved by the 
Secretary under section 2105(c)(3) of the Social 
Security Act prior to the date of enactment of 
this Act. 
(b) MEDICAID.—Title XIX is amended by inserting 
after section 1906 the following new section: 
‘‘PREMIUM ASSISTANCE OPTION FOR CHILDREN 
‘‘SEC. 1906A. (a) IN GENERAL.—A State may elect 
to offer a premium assistance subsidy (as defined in sub-
section (c)) for qualified employer-sponsored coverage (as 
defined in subsection (b)) to all individuals under age 19 
who are entitled to medical assistance under this title (and 
to the parent of such an individual) who have access to 
such coverage if the State meets the requirements of this 
section. 
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162 
‘‘(b) 
QUALIFIED
EMPLOYER-SPONSORED
COV-
ERAGE.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2)), 
in this paragraph, the term ‘qualified employer-spon-
sored coverage’ means a group health plan or health 
insurance coverage offered through an employer— 
‘‘(A) that qualifies as creditable coverage 
as a group health plan under section 2701(c)(1) 
of the Public Health Service Act; 
‘‘(B) for which the employer contribution 
toward any premium for such coverage is at 
least 40 percent; and 
‘‘(C) that is offered to all individuals in a 
manner that would be considered a nondiscrim-
inatory eligibility classification for purposes of 
paragraph (3)(A)(ii) of section 105(h) of the 
Internal Revenue Code of 1986 (but determined 
without regard to clause (i) of subparagraph 
(B) of such paragraph). 
‘‘(2) EXCEPTION.—Such term does not include 
coverage consisting of— 
‘‘(A) benefits provided under a health flexi-
ble spending arrangement (as defined in section 
106(c)(2) of the Internal Revenue Code of 
1986); or 
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163 
‘‘(B) a high deductible health plan (as de-
fined in section 223(c)(2) of such Code), with-
out regard to whether the plan is purchased in 
conjunction with a health savings account (as 
defined under section 223(d) of such Code). 
‘‘(3) TREATMENT
AS
THIRD
PARTY
LIABIL-
ITY.—The State shall treat the coverage provided 
under qualified employer-sponsored coverage as a 
third party liability under section 1902(a)(25). 
‘‘(c) PREMIUM ASSISTANCE SUBSIDY.—In this sec-
tion, the term ‘premium assistance subsidy’ means the 
amount of the employee contribution for enrollment in the 
qualified employer-sponsored coverage by the individual 
under age 19 or by the individual’s family. Premium as-
sistance subsidies under this section shall be considered, 
for purposes of section 1903(a), to be a payment for med-
ical assistance. 
‘‘(d) VOLUNTARY PARTICIPATION.— 
‘‘(1) EMPLOYERS.—Participation by an em-
ployer in a premium assistance subsidy offered by a 
State under this section shall be voluntary. An em-
ployer may notify a State that it elects to opt-out of 
being directly paid a premium assistance subsidy on 
behalf of an employee. 
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164 
‘‘(2) BENEFICIARIES.—No subsidy shall be pro-
vided to an individual under age 19 under this sec-
tion unless the individual (or the individual’s parent) 
voluntarily elects to receive such a subsidy. A State 
may not require such an election as a condition of 
receipt of medical assistance. State may not require, 
as a condition of an individual under age 19 (or the 
individual’s parent) being or remaining eligible for 
medical assistance under this title, apply for enroll-
ment in qualified employer-sponsored coverage under 
this section. 
‘‘(3) OPT-OUT PERMITTED FOR ANY MONTH.— 
A State shall establish a process for permitting the 
parent of an individual under age 19 receiving a pre-
mium assistance subsidy to disenroll the individual 
from the qualified employer-sponsored coverage. 
‘‘(e) REQUIREMENT TO PAY PREMIUMS AND COST- 
SHARING AND PROVIDE SUPPLEMENTAL COVERAGE.—In 
the case of the participation of an individual under age 
19 (or the individual’s parent) in a premium assistance 
subsidy under this section for qualified employer-spon-
sored coverage, the State shall provide for payment of all 
enrollee premiums for enrollment in such coverage and all 
deductibles, coinsurance, and other cost-sharing obliga-
tions for items and services otherwise covered under the 
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165 
State plan under this title (exceeding the amount other-
wise permitted under section 1916 or, if applicable, section 
1916A). The fact that an individual under age 19 (or a 
parent) elects to enroll in qualified employer-sponsored 
coverage under this section shall not change the individ-
ual’s (or parent’s) eligibility for medical assistance under 
the State plan, except insofar as section 1902(a)(25) pro-
vides that payments for such assistance shall first be made 
under such coverage.’’. 
(c) GAO STUDY AND REPORT.—Not later than Janu-
ary 1, 2009, the Comptroller General of the United States 
shall study cost and coverage issues relating to any State 
premium assistance programs for which Federal matching 
payments are made under title XIX or XXI of the Social 
Security Act, including under waiver authority, and shall 
submit a report to the Committee on Finance of the Sen-
ate and the Committee on Energy and Commerce of the 
House of Representatives on the results of such study. 
SEC. 302. OUTREACH, EDUCATION, AND ENROLLMENT AS-
SISTANCE. 
(a) REQUIREMENT TO INCLUDE DESCRIPTION OF 
OUTREACH, EDUCATION, AND ENROLLMENT EFFORTS 
RELATED TO PREMIUM ASSISTANCE SUBSIDIES IN STATE 
CHILD HEALTH PLAN.—Section 2102(c) (42 U.S.C. 
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166 
1397bb(c)) is amended by adding at the end the following 
new paragraph: 
‘‘(3) PREMIUM ASSISTANCE SUBSIDIES.—In the 
case of a State that provides for premium assistance 
subsidies under the State child health plan in ac-
cordance with paragraph (2)(B), (3), or (10) of sec-
tion 2105(c), or a waiver approved under section 
1115, outreach, education, and enrollment assistance 
for families of children likely to be eligible for such 
subsidies, to inform such families of the availability 
of, and to assist them in enrolling their children in, 
such subsidies, and for employers likely to provide 
coverage that is eligible for such subsidies, including 
the specific, significant resources the State intends 
to apply to educate employers about the availability 
of premium assistance subsidies under the State 
child health plan.’’. 
(b) NONAPPLICATION
OF 10 PERCENT LIMIT
ON 
OUTREACH AND CERTAIN OTHER EXPENDITURES.—Sec-
tion 2105(c)(2)(C) (42 U.S.C. 1397ee(c)(2)(C)), as 
amended by section 301(c)(2), is amended by adding at 
the end the following new clause: 
‘‘(iv) EXPENDITURES FOR OUTREACH 
TO INCREASE THE ENROLLMENT OF CHIL-
DREN UNDER THIS TITLE AND TITLE xix 
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167 
THROUGH
PREMIUM
ASSISTANCE
SUB-
SIDIES.—Expenditures for outreach activi-
ties to families of children likely to be eligi-
ble for premium assistance subsidies in ac-
cordance with paragraph (2)(B), (3), or 
(10), or a waiver approved under section 
1115, to inform such families of the avail-
ability of, and to assist them in enrolling 
their children in, such subsidies, and to 
employers likely to provide qualified em-
ployer-sponsored coverage (as defined in 
subparagraph (B) of such paragraph), but 
not to exceed an amount equal to 1.25 per-
cent of the maximum amount permitted to 
be expended under subparagraph (A) for 
items described in subsection (a)(1)(D).’’. 
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168 
Subtitle B—Coordinating Premium 
Assistance With Private Coverage 
SEC. 311. SPECIAL ENROLLMENT PERIOD UNDER GROUP 
HEALTH PLANS IN CASE OF TERMINATION OF 
MEDICAID OR CHIP COVERAGE OR ELIGI-
BILITY FOR ASSISTANCE IN PURCHASE OF 
EMPLOYMENT-BASED COVERAGE; COORDINA-
TION OF COVERAGE. 
(a) AMENDMENTS TO INTERNAL REVENUE CODE OF 
1986.—Section 9801(f) of the Internal Revenue Code of 
1986 (relating to special enrollment periods) is amended 
by adding at the end the following new paragraph: 
‘‘(3) SPECIAL RULES RELATING TO MEDICAID 
AND CHIP.— 
‘‘(A) IN GENERAL.—A group health plan 
shall permit an employee who is eligible, but 
not enrolled, for coverage under the terms of 
the plan (or a dependent of such an employee 
if the dependent is eligible, but not enrolled, for 
coverage under such terms) to enroll for cov-
erage under the terms of the plan if either of 
the following conditions is met: 
‘‘(i) TERMINATION OF MEDICAID OR 
CHIP
COVERAGE.—The employee or de-
pendent is covered under a Medicaid plan 
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169 
under title XIX of the Social Security Act 
or under a State child health plan under 
title XXI of such Act and coverage of the 
employee or dependent under such a plan 
is terminated as a result of loss of eligi-
bility for such coverage and the employee 
requests coverage under the group health 
plan not later than 60 days after the date 
of termination of such coverage. 
‘‘(ii) ELIGIBILITY FOR EMPLOYMENT 
ASSISTANCE UNDER MEDICAID OR CHIP.— 
The employee or dependent becomes eligi-
ble for assistance, with respect to coverage 
under the group health plan under such 
Medicaid plan or State child health plan 
(including under any waiver or demonstra-
tion project conducted under or in relation 
to such a plan), if the employee requests 
coverage under the group health plan not 
later than 60 days after the date the em-
ployee or dependent is determined to be el-
igible for such assistance. 
‘‘(B) EMPLOYEE OUTREACH AND DISCLO-
SURE.— 
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170 
‘‘(i) OUTREACH TO EMPLOYEES RE-
GARDING AVAILABILITY OF MEDICAID AND 
CHIP COVERAGE.— 
‘‘(I) IN
GENERAL.—Each em-
ployer that maintains a group health 
plan in a State that provides medical 
assistance under a State Medicaid 
plan under title XIX of the Social Se-
curity Act, or child health assistance 
under a State child health plan under 
title XXI of such Act, in the form of 
premium assistance for the purchase 
of coverage under a group health 
plan, shall provide to each employee a 
written notice informing the employee 
of potential opportunities then cur-
rently available in the State in which 
the employee resides for premium as-
sistance under such plans for health 
coverage of the employee or the em-
ployee’s dependents. For purposes of 
compliance with this clause, the em-
ployer may use any State-specific 
model notice developed in accordance 
with section 701(f)(3)(B)(i)(II) of the 
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171 
Employee Retirement Income Security 
Act 
of 
1974 
(29 
U.S.C. 
1181(f)(3)(B)(i)(II)). 
‘‘(II) OPTION TO PROVIDE CON-
CURRENT WITH PROVISION OF PLAN 
MATERIALS
TO
EMPLOYEE.—An em-
ployer may provide the model notice 
applicable to the State in which an 
employee resides concurrent with the 
furnishing of materials notifying the 
employee of health plan eligibility, 
concurrent with materials provided to 
the employee in connection with an 
open season or election process con-
ducted under the plan, or concurrent 
with the furnishing of the summary 
plan description as provided in section 
104(b) of the Employee Retirement 
Income Security Act of 1974 (29 
U.S.C. 1024). 
‘‘(ii) 
DISCLOSURE
ABOUT
GROUP 
HEALTH PLAN BENEFITS TO STATES FOR 
MEDICAID
AND
CHIP
ELIGIBLE
INDIVID-
UALS.—In the case of a participant or ben-
eficiary of a group health plan who is cov-
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172 
ered under a Medicaid plan of a State 
under title XIX of the Social Security Act 
or under a State child health plan under 
title XXI of such Act, the plan adminis-
trator of the group health plan shall dis-
close to the State, upon request, informa-
tion about the benefits available under the 
group health plan in sufficient specificity, 
as determined under regulations of the 
Secretary of Health and Human Services 
in consultation with the Secretary that re-
quire use of the model coverage coordina-
tion disclosure form developed under sec-
tion 311(b)(1)(C) of the Children’s Health 
Insurance Program Reauthorization Act of 
2007, so as to permit the State to make a 
determination (under paragraph (2)(B), 
(3), or (10) of section 2105(c) of the So-
cial Security Act or otherwise) concerning 
the cost-effectiveness of the State pro-
viding medical or child health assistance 
through premium assistance for the pur-
chase of coverage under such group health 
plan and in order for the State to provide 
supplemental benefits required under para-
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173 
graph (10)(E) of such section or other au-
thority.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) AMENDMENTS TO EMPLOYEE RETIREMENT 
INCOME SECURITY ACT.— 
(A) IN GENERAL.—Section 701(f) of the 
Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1181(f)) is amended by adding 
at the end the following new paragraph: 
‘‘(3) SPECIAL RULES FOR APPLICATION IN CASE 
OF MEDICAID AND CHIP.— 
‘‘(A) IN GENERAL.—A group health plan, 
and a health insurance issuer offering group 
health insurance coverage in connection with a 
group health plan, shall permit an employee 
who is eligible, but not enrolled, for coverage 
under the terms of the plan (or a dependent of 
such an employee if the dependent is eligible, 
but not enrolled, for coverage under such 
terms) to enroll for coverage under the terms of 
the plan if either of the following conditions is 
met: 
‘‘(i) TERMINATION OF MEDICAID OR 
CHIP
COVERAGE.—The employee or de-
pendent is covered under a Medicaid plan 
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174 
under title XIX of the Social Security Act 
or under a State child health plan under 
title XXI of such Act and coverage of the 
employee or dependent under such a plan 
is terminated as a result of loss of eligi-
bility for such coverage and the employee 
requests coverage under the group health 
plan (or health insurance coverage) not 
later than 60 days after the date of termi-
nation of such coverage. 
‘‘(ii) ELIGIBILITY FOR EMPLOYMENT 
ASSISTANCE UNDER MEDICAID OR CHIP.— 
The employee or dependent becomes eligi-
ble for assistance, with respect to coverage 
under the group health plan or health in-
surance coverage, under such Medicaid 
plan or State child health plan (including 
under any waiver or demonstration project 
conducted under or in relation to such a 
plan), if the employee requests coverage 
under the group health plan or health in-
surance coverage not later than 60 days 
after the date the employee or dependent is 
determined to be eligible for such assist-
ance. 
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175 
‘‘(B) COORDINATION WITH MEDICAID AND 
CHIP.— 
‘‘(i) OUTREACH TO EMPLOYEES RE-
GARDING AVAILABILITY OF MEDICAID AND 
CHIP COVERAGE.— 
‘‘(I) IN
GENERAL.—Each em-
ployer that maintains a group health 
plan in a State that provides medical 
assistance under a State Medicaid 
plan under title XIX of the Social Se-
curity Act, or child health assistance 
under a State child health plan under 
title XXI of such Act, in the form of 
premium assistance for the purchase 
of coverage under a group health 
plan, shall provide to each employee a 
written notice informing the employee 
of potential opportunities then cur-
rently available in the State in which 
the employee resides for premium as-
sistance under such plans for health 
coverage of the employee or the em-
ployee’s dependents. 
‘‘(II) MODEL NOTICE.—Not later 
than 1 year after the date of enact-
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176 
ment of the Children’s Health Insur-
ance Program Reauthorization Act of 
2007, the Secretary and the Secretary 
of Health and Human Services, in 
consultation with Directors of State 
Medicaid agencies under title XIX of 
the Social Security Act and Directors 
of State CHIP agencies under title 
XXI of such Act, shall jointly develop 
national and State-specific model no-
tices for purposes of subparagraph 
(A). The Secretary shall provide em-
ployers with such model notices so as 
to enable employers to timely comply 
with the requirements of subpara-
graph (A). Such model notices shall 
include information regarding how an 
employee may contact the State in 
which the employee resides for addi-
tional information regarding potential 
opportunities for such premium assist-
ance, including how to apply for such 
assistance. 
‘‘(III) OPTION TO PROVIDE CON-
CURRENT WITH PROVISION OF PLAN 
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177 
MATERIALS
TO
EMPLOYEE.—An em-
ployer may provide the model notice 
applicable to the State in which an 
employee resides concurrent with the 
furnishing of materials notifying the 
employee of health plan eligibility, 
concurrent with materials provided to 
the employee in connection with an 
open season or election process con-
ducted under the plan, or concurrent 
with the furnishing of the summary 
plan description as provided in section 
104(b). 
‘‘(ii) 
DISCLOSURE
ABOUT
GROUP 
HEALTH PLAN BENEFITS TO STATES FOR 
MEDICAID
AND
CHIP
ELIGIBLE
INDIVID-
UALS.—In the case of a participant or ben-
eficiary of a group health plan who is cov-
ered under a Medicaid plan of a State 
under title XIX of the Social Security Act 
or under a State child health plan under 
title XXI of such Act, the plan adminis-
trator of the group health plan shall dis-
close to the State, upon request, informa-
tion about the benefits available under the 
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178 
group health plan in sufficient specificity, 
as determined under regulations of the 
Secretary of Health and Human Services 
in consultation with the Secretary that re-
quire use of the model coverage coordina-
tion disclosure form developed under sec-
tion 311(b)(1)(C) of the Children’s Health 
Insurance Program Reauthorization Act of 
2007, so as to permit the State to make a 
determination (under paragraph (2)(B), 
(3), or (10) of section 2105(c) of the So-
cial Security Act or otherwise) concerning 
the cost-effectiveness of the State pro-
viding medical or child health assistance 
through premium assistance for the pur-
chase of coverage under such group health 
plan and in order for the State to provide 
supplemental benefits required under para-
graph (10)(E) of such section or other au-
thority.’’. 
(B) CONFORMING
AMENDMENT.—Section 
102(b) of the Employee Retirement Income Se-
curity Act of 1974 (29 U.S.C. 1022(b)) is 
amended— 
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180 
ordination disclosure form described 
in subclause (II) and to identify the 
impediments to the effective coordina-
tion of coverage available to families 
that include employees of employers 
that maintain group health plans and 
members who are eligible for medical 
assistance under title XIX of the So-
cial Security Act or child health as-
sistance or other health benefits cov-
erage under title XXI of such Act. 
(II) MODEL COVERAGE COORDI-
NATION
DISCLOSURE
FORM
DE-
SCRIBED.—The model form described 
in this subclause is a form for plan 
administrators of group health plans 
to complete for purposes of permitting 
a State to determine the availability 
and cost-effectiveness of the coverage 
available under such plans to employ-
ees who have family members who are 
eligible for premium assistance offered 
under a State plan under title XIX or 
XXI of such Act and to allow for co-
ordination of coverage for enrollees of 
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181 
such plans. Such form shall provide 
the following information in addition 
to such other information as the 
Working Group determines appro-
priate: 
(aa) 
A 
determination 
of 
whether the employee is eligible 
for coverage under the group 
health plan. 
(bb) The name and contract 
information of the plan adminis-
trator of the group health plan. 
(cc) The benefits offered 
under the plan. 
(dd) The premiums and 
cost-sharing required under the 
plan. 
(ee) Any other information 
relevant to coverage under the 
plan. 
(ii) 
MEMBERSHIP.—The 
Working 
Group shall consist of not more than 30 
members and shall be composed of rep-
resentatives of— 
(I) the Department of Labor; 
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182 
(II) the Department of Health 
and Human Services; 
(III) State directors of the Med-
icaid program under title XIX of the 
Social Security Act; 
(IV) State directors of the State 
Children’s Health Insurance Program 
under title XXI of the Social Security 
Act; 
(V) employers, including owners 
of small businesses and their trade or 
industry representatives and certified 
human resource and payroll profes-
sionals; 
(VI) plan administrators and 
plan sponsors of group health plans 
(as defined in section 607(1) of the 
Employee Retirement Income Security 
Act of 1974); 
(VII) health insurance issuers; 
and 
(VIII) children and other bene-
ficiaries of medical assistance under 
title XIX of the Social Security Act or 
child health assistance or other health 
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183 
benefits coverage under title XXI of 
such Act. 
(iii) COMPENSATION.—The members 
of the Working Group shall serve without 
compensation. 
(iv) ADMINISTRATIVE SUPPORT.—The 
Department of Health and Human Serv-
ices and the Department of Labor shall 
jointly provide appropriate administrative 
support to the Working Group, including 
technical assistance. The Working Group 
may use the services and facilities of either 
such Department, with or without reim-
bursement, as jointly determined by such 
Departments. 
(v) REPORT.— 
(I) REPORT BY WORKING GROUP 
TO
THE
SECRETARIES.—Not later 
than 18 months after the date of the 
enactment of this Act, the Working 
Group shall submit to the Secretary of 
Labor and the Secretary of Health 
and Human Services the model form 
described in clause (i)(II) along with a 
report containing recommendations 
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184 
for appropriate measures to address 
the impediments to the effective co-
ordination of coverage between group 
health plans and the State plans 
under titles XIX and XXI of the So-
cial Security Act. 
(II) REPORT BY SECRETARIES TO 
THE
CONGRESS.—Not later than 2 
months after receipt of the report 
pursuant to subclause (I), the Secre-
taries shall jointly submit a report to 
each House of the Congress regarding 
the recommendations contained in the 
report under such subclause. 
(vi) 
TERMINATION.—The 
Working 
Group shall terminate 30 days after the 
date of the issuance of its report under 
clause (v). 
(D) EFFECTIVE DATES.—The Secretary of 
Labor and the Secretary of Health and Human 
Services shall develop the initial model notices 
under section 701(f)(3)(B)(i)(II) of the Em-
ployee Retirement Income Security Act of 1974, 
and the Secretary of Labor shall provide such 
notices to employers, not later than the date 
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185 
that is 1 year after the date of enactment of 
this Act, and each employer shall provide the 
initial annual notices to such employer’s em-
ployees beginning with the first plan year that 
begins after the date on which such initial 
model notices are first issued. The model cov-
erage coordination disclosure form developed 
under subparagraph (C) shall apply with re-
spect to requests made by States beginning 
with the first plan year that begins after the 
date on which such model coverage coordination 
disclosure form is first issued. 
(E) ENFORCEMENT.—Section 502 of the 
Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1132) is amended— 
(i) in subsection (a)(6), by striking 
‘‘or (8)’’ and inserting ‘‘(8), or (9)’’; and 
(ii) in subsection (c), by redesignating 
paragraph (9) as paragraph (10), and by 
inserting after paragraph (8) the following: 
‘‘(9)(A) The Secretary may assess a civil penalty 
against any employer of up to $100 a day from the date 
of the employer’s failure to meet the notice requirement 
of section 701(f)(3)(B)(i)(I). For purposes of this sub-
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204 
‘‘(2) REQUIREMENTS.—In awarding grants 
under this subsection, the Secretary shall ensure 
that— 
‘‘(A) only 1 demonstration project funded 
under a grant awarded under this subsection 
shall be conducted in a State; and 
‘‘(B) demonstration projects funded under 
grants awarded under this subsection shall be 
conducted evenly between States with large 
urban areas and States with large rural areas. 
‘‘(3) 
AUTHORITY
FOR
MULTISTATE 
PROJECTS.—A demonstration project conducted with 
a grant awarded under this subsection may be con-
ducted on a multistate basis, as needed. 
‘‘(4) FUNDING.—$20,000,000 of the amount 
appropriated under subsection (i) for a fiscal year 
shall be used to carry out this subsection. 
‘‘(e) 
CHILDHOOD
OBESITY
DEMONSTRATION 
PROJECT.— 
‘‘(1) AUTHORITY
TO
CONDUCT
DEMONSTRA-
TION.—The Secretary, in consultation with the Ad-
ministrator of the Centers for Medicare & Medicaid 
Services, shall conduct a demonstration project to 
develop a comprehensive and systematic model for 
reducing childhood obesity by awarding grants to eli-
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283 
cigarette tubes removed during 2000 or 2001)’’ and in-
serting ‘‘6.26 cents’’. 
(e) SMOKELESS TOBACCO.—Section 5701(e) of such 
Code is amended— 
(1) by striking ‘‘58.5 cents (51 cents on snuff 
removed during 2000 or 2001)’’ in paragraph (1) 
and inserting ‘‘$1.50’’, and 
(2) by striking ‘‘19.5 cents (17 cents on chew-
ing tobacco removed during 2000 or 2001)’’ in para-
graph (2) and inserting ‘‘50 cents’’. 
(f) PIPE TOBACCO.—Section 5701(f) of such Code is 
amended by striking ‘‘$1.0969 cents (95.67 cents on pipe 
tobacco removed during 2000 or 2001)’’ and inserting 
‘‘$2.8126 cents’’. 
(g) ROLL-YOUR-OWN TOBACCO.—Section 5701(g) of 
such Code is amended by striking ‘‘$1.0969 cents (95.67 
cents on roll-your-own tobacco removed during 2000 or 
2001)’’ and inserting ‘‘$8.8889 cents’’. 
(h) FLOOR STOCKS TAXES.— 
(1) IMPOSITION OF TAX.—On tobacco products 
(other than cigars described in section 5701(a)(2) of 
the Internal Revenue Code of 1986) and cigarette 
papers and tubes manufactured in or imported into 
the United States which are removed before January 
1, 2008, and held on such date for sale by any per-
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