‘‘(A) REGULAR FMAP FOR EXPENDITURES FOR 
PREGNANT WOMEN WITH INCOME ABOVE 133 PER-
CENT OF POVERTY.—The portion of the payments 
made for expenditures described in paragraph 
(4)(A)(ii) that represents the amount that would 
have been paid if the enhanced FMAP had not been 
substituted for the Federal medical assistance per-
centage. 
‘‘(B) FAMILYCARE
PARENTS.—Payments for 
expenditures described in paragraph (4)(A)(i). 
‘‘(C) REGULAR FMAP FOR EXPENDITURES FOR 
CERTAIN
CHILDREN
IN
FAMILIES
WITH
INCOME 
ABOVE MEDICAID MANDATORY LEVEL.—The portion 
of the payments made for expenditures described in 
paragraph (4)(B) that represents the amount that 
would have been paid if the enhanced FMAP had 
not been substituted for the Federal medical assist-
ance percentage.’’. 
(B) CONFORMING
AMENDMENTS.—Sub-
paragraph (B) of section 2105(a)(1) of the So-
cial Security Act, as amended by subsection 
(a)(1)(D), is amended to read as follows: 
‘‘(B) CERTAIN FAMILYCARE PARENTS AND 
OTHERS.—Expenditures for medical assistance 
that is attributable to expenditures described in
section 1905(u)(4), except as provided in sec-
tion 1905(u)(5).’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection apply as of October 1, 2006, to 
fiscal years beginning on or after such date and to 
expenditures under the State plan on and after such 
date, whether or not regulations implementing such 
amendments have been issued. 
(c) MAKING TITLE XXI BASE ALLOTMENTS PERMA-
NENT.—Section 2104(a) of the Social Security Act (42 
U.S.C. 1397dd(a)) is amended— 
(1) by striking ‘‘and’’ at the end of paragraph 
(9); 
(2) by striking the period at the end of para-
graph (10) and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(11) for fiscal year 2008 and each fiscal year 
thereafter, the amount of the allotment provided 
under this subsection for the preceding fiscal year 
increased by the percentage increase (if any) in the 
medical care expenditure category of the Consumer 
Price Index for All Urban Consumers (United States 
city average).’’. 
(d) GAO STUDY.—
(1) STUDY.—The Comptroller General of the 
United States shall conduct a study regarding fund-
ing under title XXI of the Social Security Act that 
examines— 
(A) the adequacy of overall funding under 
such title; 
(B) the formula for determining allotments 
and for redistribution of unspent funds under 
such title; and 
(C) the effect of waiting lists and caps on 
enrollment under such title. 
(2) REPORT.—Not later than July 1, 2007, the 
Comptroller General shall submit a report on the 
study conducted under paragraph (1). Such report 
shall include recommendations regarding a better 
mechanism for determining State allotments and re-
distribution of unspent funds under such title in 
order to ensure all eligible families in need can ac-
cess coverage through such title. 
(e) CONFORMING AMENDMENTS.— 
(1) 
ELIGIBILITY
CATEGORIES.—Section 
1905(a) of the Social Security Act (42 U.S.C. 
1396d(a)) is amended, in the matter before para-
graph (1)—
(A) by striking ‘‘or’’ at the end of clause 
(xii); 
(B) by inserting ‘‘or’’ at the end of clause 
(xiii); and 
(C) by inserting after clause (xiii) the fol-
lowing: 
‘‘(xiv) who are parents described (or treated as 
if described) in section 1902(k)(1),’’. 
(2) INCOME LIMITATIONS.—Section 1903(f)(4) 
of the Social Security Act (42 U.S.C. 1396b(f)(4)) 
is amended— 
(A) effective October 1, 2006, by inserting 
‘‘1902(a)(10)(A)(i)(VIII),’’ 
after 
‘‘1902(a)(10)(A)(i)(VII),’’; and 
(B) 
by 
inserting 
‘‘1902(a)(10)(A)(ii)(XIX),’’ 
after 
‘‘1902(a)(10)(A)(ii)(XVIII),’’. 
(3) CONFORMING
AMENDMENT
RELATING
TO 
NO WAITING PERIOD FOR PREGNANT WOMEN.—Sec-
tion 2102(b)(1)(B) of the Social Security Act (42 
U.S.C. 1397bb(b)(1)(B)) is amended— 
(A) by striking ‘‘, and’’ at the end of 
clause (i) and inserting a semicolon; 
(B) by striking the period at the end of 
clause (ii) and inserting ‘‘; and’’; and
(C) by adding at the end the following: 
‘‘(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 parent who is pregnant.’’. 
SEC. 4. AUTOMATIC ENROLLMENT OF CHILDREN BORN TO 
TITLE XXI PARENTS. 
Section 2102(b)(1) of the Social Security Act (42 
U.S.C. 1397bb(b)(1)) is amended by adding at the end 
the following: 
‘‘(C) AUTOMATIC
ELIGIBILITY
OF
CHIL-
DREN
BORN
TO
A
PARENT
BEING
PROVIDED 
FAMILYCARE.—Such eligibility standards shall 
provide for automatic coverage of a child born 
to an individual who is provided assistance 
under this title in the same manner as medical 
assistance would be provided under section 
1902(e)(4) to a child described in such sec-
tion.’’. 
SEC. 5. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS 
UNDER THE MEDICAID PROGRAM AND TITLE 
XXI. 
(a) MEDICAID PROGRAM.—Section 1903(v) of the 
Social Security Act (42 U.S.C. 1396b(v)) is amended—