I 
108TH CONGRESS 
2D SESSION 
H. R. 4350
To amend titles XIX and XXI of the Social Security Act to provide for 
FamilyCare coverage for parents of enrolled children, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 12, 2004
Mr. DINGELL (for himself, Mr. BROWN of Ohio, Mr. RANGEL, Mr. STARK, 
Mr. WAXMAN, Ms. PELOSI, Mr. GEORGE MILLER of California, Mr. 
PALLONE, Mr. ABERCROMBIE, Mr. ALLEN, Mr. BACA, Mr. BOUCHER, 
Mrs. CAPPS, Ms. CARSON of Indiana, Mrs. CHRISTENSEN, Mr. CROWLEY, 
Mr. CUMMINGS, Mr. DAVIS of Florida, Ms. DEGETTE, Ms. DELAURO, 
Mr. DEUTSCH, Mr. DOYLE, Mr. EMANUEL, Mr. ENGEL, Ms. ESHOO, Mr. 
EVANS, Mr. FILNER, Mr. FRANK of Massachusetts, Mr. FROST, Mr. 
GEPHARDT, Mr. GONZALEZ, Mr. GORDON, Mr. GREEN of Texas, Mr. 
GRIJALVA, Mr. HINCHEY, Mr. HOEFFEL, Ms. JACKSON-LEE of Texas, 
Mrs. JONES of Ohio, Mr. KILDEE, Ms. KILPATRICK, Mr. KIND, Ms. LEE, 
Mr. LYNCH, Ms. MCCARTHY
of Missouri, Ms. MCCOLLUM, Mr. 
MCDERMOTT, Mr. MCGOVERN, Mr. MCNULTY, Mr. MARKEY, Mr. MAT-
SUI, Mr. MEEKS of New York, Mr. MENENDEZ, Mr. MOORE, Mr. MORAN 
of Virginia, Mr. NADLER, Mrs. NAPOLITANO, Mr. PASTOR, Mr. PAYNE, 
Mr. RODRIGUEZ, Ms. ROYBAL-ALLARD, Mr. RUPPERSBERGER, Mr. 
RUSH, Mr. SANDLIN, Ms. SCHAKOWSKY, Mr. SCOTT of Virginia, Mr. 
SERRANO, Ms. SLAUGHTER, Ms. SOLIS, Mr. STRICKLAND, Mr. STUPAK, 
Mr. TIERNEY, Mr. WEINER, Mr. WYNN, Mr. JACKSON of Illinois, Mr. 
ANDREWS, Mr. LEVIN, Mr. KENNEDY of Rhode Island, Mr. OLVER, Mr. 
HOLT, Mr. KLECZKA, Ms. WATERS, Mr. BISHOP of New York, Ms. 
WOOLSEY, Mrs. DAVIS of California, Mr. RYAN of Ohio, Mr. VAN 
HOLLEN, Mr. HONDA, Mr. MICHAUD, Mr. ALEXANDER, Mr. WEXLER, 
Ms. LINDA T. SA´NCHEZ of California, Mr. DELAHUNT, Mr. CLAY, Mr. 
HOYER, and Mr. KUCINICH) introduced the following bill; which was re-
ferred to the Committee on Energy and Commerce 
A BILL 
To amend titles XIX and XXI of the Social Security Act
to provide for FamilyCare coverage for parents of en-
rolled children, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘FamilyCare Act of 2004’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows:
Sec. 1. Short title; table of contents. 
Sec. 2. Renaming of title XXI program. 
Sec. 3. FamilyCare coverage of parents and pregnant women under the med-
icaid program and title XXI. 
Sec. 4. Automatic enrollment of children born to title XXI parents. 
Sec. 5. Optional coverage of legal immigrants under the medicaid program and 
title XXI. 
Sec. 6. Optional coverage of children through age 20 under the medicaid pro-
gram and title XXI. 
Sec. 7. Allowing States to simplify rules for families. 
Sec. 8. Revision and simplification of the transitional medical assistance pro-
gram (TMA). 
Sec. 9. Limitations on conflicts of interest. 
Sec. 10. Increase in CHIP allotment for each of fiscal years 2002 through 
2004. 
Sec. 11. Demonstration programs to improve medicaid and CHIP outreach to 
homeless individuals and families. 
Sec. 12. Additional CHIP revisions. 
Sec. 13. Increased federal reimbursement for language services under the med-
icaid program and title XXI.
SEC. 2. RENAMING OF TITLE XXI PROGRAM. 
(a) IN GENERAL.—The heading of title XXI of the 
Social Security Act (42 U.S.C. 1397aa et seq.) is amended 
to read as follows: 
‘‘TITLE XXI—FAMILYCARE PROGRAM’’. 
(b) PROGRAM REFERENCES.—Any reference in any 
provision of Federal law or regulation to ‘‘SCHIP’’ or
‘‘State children’s health insurance program’’ under title 
XXI of the Social Security Act shall be deemed a reference 
to the FamilyCare program under such title. 
SEC. 3. FAMILYCARE COVERAGE OF PARENTS AND PREG-
NANT WOMEN UNDER THE MEDICAID PRO-
GRAM AND TITLE XXI. 
(a) INCENTIVES TO IMPLEMENT FAMILYCARE COV-
ERAGE.—
(1) UNDER MEDICAID.—
(A) ESTABLISHMENT OF NEW OPTIONAL 
ELIGIBILITY
CATEGORY.—Section 
1902(a)(10)(A)(ii) of the Social Security Act 
(42 U.S.C. 1396a(a)(10)(A)(ii)) is amended—
(i) by striking ‘‘or’’ at the end of sub-
clause (XVII); 
(ii) by adding ‘‘or’’ at the end of sub-
clause (XVIII); and 
(iii) by adding at the end the fol-
lowing: 
‘‘(XIX) who are individuals de-
scribed in subsection (k)(1) (relating 
to parents of categorically eligible chil-
dren);’’.
(B) PARENTS DESCRIBED.—Section 1902 
of the Social Security Act is further amended 
by inserting after subsection (j) the following: 
‘‘(k)(1)(A) Individuals described in this paragraph 
are individuals—
‘‘(i) who are the parents of an individual who 
is under 19 years of age (or such higher age as the 
State may have elected under section 1902(l)(1)(D)) 
and who is eligible for medical assistance under sub-
section (a)(10)(A); 
‘‘(ii) who are not otherwise eligible for medical 
assistance under such subsection or under a waiver 
approved under section 1115 or otherwise (except 
under 
section 
1931 
or 
under 
subsection 
(a)(10)(A)(ii)(XIX)); and 
‘‘(iii) whose family income or resources exceeds 
the effective income level or resource level applicable 
under the State plan under part A of title IV as in 
effect as of July 16, 1996, but does not exceed the 
highest effective income or resource level (if any) ap-
plicable to a child in the family under this title. 
‘‘(B) In establishing an income eligibility level for in-
dividuals described in this paragraph, a State may vary 
such level consistent with the various income levels estab-
lished under subsection (l)(2) in order to ensure, to the
maximum extent possible, that such individuals shall be 
enrolled in the same program as their children. 
‘‘(C) An individual may not be treated as being de-
scribed in this paragraph unless, at the time of the individ-
ual’s enrollment under this title, the child referred to in 
subparagraph (A)(i) of the individual is also enrolled 
under this title or otherwise insured. 
‘‘(D) In this subsection, the term ‘parent’ includes 
an individual treated as a caretaker for purposes of car-
rying out section 1931. 
‘‘(E) In this subsection, the term ‘effective income 
level’ means the income level expressed as a percent of 
the poverty line and considering applicable income dis-
regards. 
‘‘(2) The State shall provide for coverage of a parent 
described in paragraph (1) or section 2111 of a child who 
is covered under this title or title XXI under the same 
title as the title as such child is covered. In the case of 
a parent described in paragraph (1) who is also the parent 
of a child who is eligible for child health assistance under 
title XXI, the State may elect (on a uniform basis) to 
cover all such parents under section 2111 or under this 
title.’’.
(C) ENHANCED MATCHING FUNDS AVAIL-
ABLE IF CERTAIN CONDITIONS MET.—Section
1905 of the Social Security Act (42 U.S.C. 
1396d) is amended—
(i) in the fourth sentence of sub-
section (b), by striking ‘‘or subsection 
(u)(3)’’ 
and 
inserting 
‘‘, 
(u)(3), 
or 
(u)(4)(A)’’; and 
(ii) in subsection (u)—
(I) by redesignating paragraph 
(4) as paragraph (6), and 
(II) by inserting after paragraph 
(3) the following:
‘‘(4) For purposes of subsection (b) and section 
2105(a)(1): 
‘‘(A) FAMILYCARE
PARENTS.—The expendi-
tures described in this subparagraph are the expend-
itures described in the following clauses (i) and (ii): 
‘‘(i) PARENTS.—If the conditions described 
in clauses (iii) and (iv) are met, expenditures 
for medical assistance for parents described in 
section 1902(k)(1) and for parents who would 
be described in such section but for the fact 
that they are eligible for medical assistance 
under section 1931 or under a waiver approved 
under section 1115.
‘‘(ii) CERTAIN PREGNANT WOMEN.—If the 
conditions described in clause (v) are met, ex-
penditures for medical assistance for pregnant 
women described in subsection (n) or under sec-
tion 1902(l)(1)(A) in a family the income of 
which exceeds the effective income level applica-
ble under subsection (a)(10)(A)(i)(III) or 
(l)(2)(A) of section 1902 to a family of the size 
involved as of January 1, 2005. 
‘‘(iii) CONDITIONS RELATING TO ENSURING 
CHILDREN’S COVERAGE FOR ENHANCED MATCH 
FOR
PARENTS.—The conditions described in 
this clause are the following: 
‘‘(I) The State has a State child 
health plan under title XXI which (wheth-
er implemented under such title or under 
this title) has an effective income level for 
children that is at least 200 percent of the 
poverty line. 
‘‘(II) Such State child health plan 
does not limit the acceptance of applica-
tions, does not use a waiting list for chil-
dren who meet eligibility standards to 
qualify for assistance, and provides bene-
fits to all children in the State who apply 
for and meet eligibility standards. 
‘‘(III) Effective for determinations of 
eligibility made on or after the date that is 
1 year after the date of the enactment of 
this clause, the application and renewal 
procedures for individuals under 19 years 
of age (or such higher age as the State has 
elected under section 1902(l)(1)(D)) for 
medical 
assistance 
under 
section 
1902(a)(10)(A) are not to be more restric-
tive or burdensome than such procedures 
used for children with higher income under 
the State child health plan under title 
XXI. 
‘‘(iv) CONDITIONS RELATING TO MINIMUM 
COVERAGE
FOR
PARENTS
FOR
ENHANCED 
MATCH
FOR
PARENTS.—The conditions de-
scribed in this clause are the following: 
‘‘(I) The State does not apply an in-
come level for parents that is lower than 
the effective income level (expressed as a 
percent of the poverty line) that has been 
specified under the State plan under title 
XIX (including under a waiver authorized
by 
the 
Secretary 
or 
under 
section 
1902(r)(2)), as of January 1, 2005, to be 
eligible for medical assistance as a parent 
under this title. 
‘‘(II) The State plans under this title 
and title XXI do not provide coverage for 
parents with higher family income without 
covering parents with a lower family in-
come. 
‘‘(v) CONDITIONS FOR ENHANCED MATCH 
FOR CERTAIN PREGNANT WOMEN.—The condi-
tions described in this clause are the following: 
‘‘(I) The State has established an ef-
fective income eligibility level for pregnant 
women under subsection (a)(10)(A)(i)(III) 
or (l)(2)(A) of section 1902 that is at least 
185 percent of the poverty line. 
‘‘(II) The State plans under this title 
and title XXI do not provide coverage for 
pregnant women described in subpara-
graph (A)(ii) with higher family income 
without covering such pregnant women 
with a lower family income. 
‘‘(III) The State does not apply an in-
come level for pregnant women that is
lower than the effective income level that 
has been specified under the State plan 
under 
subsection 
(a)(10)(A)(i)(III) 
or 
(l)(2)(A) of section 1902, as of January 1, 
2005, to be eligible for medical assistance 
as a pregnant woman. 
‘‘(IV) The State satisfies the condi-
tions described in subclauses (I) and (II) 
of clause (iii). 
‘‘(vi) DEFINITIONS.—For purposes of this 
subsection: 
‘‘(I) The term ‘parent’ has the mean-
ing given such term for purposes of section 
1902(k)(1). 
‘‘(II) The term ‘poverty line’ has the 
meaning given such term in section 
2110(c)(5).’’. 
(D) APPROPRIATION FROM TITLE XXI AL-
LOTMENT FOR CERTAIN MEDICAID EXPANSION 
COSTS.—Section 2105(a) of the Social Security 
Act (42 U.S.C. 1397ee(a)) is amended—
(i) in paragraph (1), by redesignating 
subparagraphs (B) through (D) as sub-
paragraphs (C) through (E), respectively,
and by inserting after subparagraph (A) 
the following new subparagraph: 
‘‘(B) for medical assistance that is attrib-
utable to expenditures described in section 
1905(u)(4)(A);’’; and 
(ii) in paragraph (2), by adding at the 
end the following new subparagraph: 
‘‘(E) Fifth, for expenditures for items de-
scribed in paragraph (1)(E).’’. 
(E) INCREASING ENHANCED FMAP TO 100 
PERCENT FOR FISCAL YEARS 2005 AND 2006 FOR 
COVERAGE
OF
PARENTS.—Section 2105(b) of 
such Act (42 U.S.C. 1397ee(b)) is amended by 
adding at the end the following new sentence: 
‘‘Notwithstanding the previous sentence, the 
‘enhanced FMAP’ shall be 100 percent with re-
spect to medical assistance under title XIX for 
expenditures 
described 
in 
section 
1905(u)(4)(A)(i), but only for such assistance 
furnished during fiscal year 2005 and fiscal 
year 2006.’’. 
(2) UNDER TITLE XXI.—
(A) FAMILYCARE COVERAGE.—Title XXI 
of the Social Security Act (42 U.S.C. 1397aa et
seq.) is amended by adding at the end the fol-
lowing: 
‘‘SEC. 2111. OPTIONAL FAMILYCARE COVERAGE OF PAR-
ENTS OF TARGETED LOW-INCOME CHILDREN. 
‘‘(a) OPTIONAL COVERAGE.—Notwithstanding any 
other provision of this title, a State may provide for cov-
erage, through an amendment to its State child health 
plan under section 2102, of parent health assistance for 
targeted low-income parents, health care assistance for 
targeted low-income pregnant women, or both, in accord-
ance with this section, but only if—
‘‘(1) with respect to the provision of parent 
health assistance, the State meets the conditions de-
scribed in clause (iii) of section 1905(u)(4)(A); 
‘‘(2) with respect to the provision of health care 
assistance for pregnant women, the State meets the 
conditions described in clause (iv) of section 
1905(u)(4)(A); and 
‘‘(3) in the case of parent health assistance for 
targeted low-income parents, the State elects to pro-
vide 
medical 
assistance 
under 
section 
1902(a)(10)(A)(ii)(XIX), under section 1931, or 
under a waiver under section 1115 to individuals de-
scribed in section 1902(k)(1)(A)(i) and elects an ef-
fective income level that, consistent with paragraphs
a reference to a parent (as defined in paragraph (3)) 
of the child; except that in applying such section—
‘‘(A) there shall be substituted for the in-
come level described in paragraph (1)(B)(ii)(I) 
the applicable income level in effect for a tar-
geted low-income child; 
‘‘(B) in paragraph (3), January 1, 2005, 
shall be substituted for July 1, 1997; and 
‘‘(C) in paragraph (4), January 1, 2005, 
shall be substituted for March 31, 1997. 
‘‘(5) 
TARGETED
LOW-INCOME
PREGNANT 
WOMAN.—The term ‘targeted low-income pregnant 
woman’ has the meaning given the term targeted 
low-income child in section 2110(b) as if any ref-
erence to a child were a reference to a woman dur-
ing pregnancy and through the end of the month in 
which the 60-day period beginning on the last day 
of her pregnancy ends; except that in applying such 
section—
‘‘(A) there shall be substituted for the in-
come level described in paragraph (1)(B)(ii)(I) 
the applicable income level in effect for a tar-
geted low-income child; 
‘‘(B) in paragraph (3), January 1, 2005, 
shall be substituted for July 1, 1997; and
‘‘(C) in paragraph (4), January 1, 2005, 
shall be substituted for March 31, 1997. 
‘‘(c) 
REFERENCES
TO
TERMS
AND
SPECIAL 
RULES.—In the case of, and with respect to, a State pro-
viding for coverage of parent health assistance to targeted 
low-income parents or health care assistance to targeted 
low-income pregnant women under subsection (a), the fol-
lowing special rules apply: 
‘‘(1) Any reference in this title (other than in 
subsection (b)) to a targeted low-income child is 
deemed to include a reference to a targeted low-in-
come parent or a targeted low-income pregnant 
woman (as applicable). 
‘‘(2) Any such reference to child health assist-
ance—
‘‘(A) with respect to such parents is 
deemed a reference to parent health assistance; 
and 
‘‘(B) with respect to such pregnant women, 
is deemed a reference to health care assistance 
for pregnant women.
‘‘(3) In applying section 2103(e)(3)(B) in the 
case of a family (consisting of a parent and one or 
more children) provided coverage under this section 
or a pregnant woman provided coverage under this
section without covering other family members, the 
limitation on total annual aggregate cost-sharing 
shall be applied to such entire family or such preg-
nant woman, respectively. 
‘‘(4) In applying section 2110(b)(4), any ref-
erence to ‘section 1902(l)(2) or 1905(n)(2) (as se-
lected by a State)’ is deemed a reference to the ef-
fective income level applicable to parents under sec-
tion 1931 or under a waiver approved under section 
1115, or, in the case of a pregnant woman, the in-
come level established under section 1902(l)(2)(A). 
‘‘(5) In applying section 2102(b)(3)(B), any 
reference to children found through screening to be 
eligible for medical assistance under the State med-
icaid plan under title XIX is deemed a reference to 
parents and pregnant women.’’. 
(B) ADDITIONAL ALLOTMENT FOR STATES 
PROVIDING FAMILYCARE.—
(i) IN GENERAL.—Section 2104 of the 
Social Security Act (42 U.S.C. 1397dd) is 
amended by inserting after subsection (c) 
the following: 
‘‘(d) ADDITIONAL ALLOTMENTS FOR STATE PRO-
VIDING FAMILYCARE.—
‘‘(1) APPROPRIATION; TOTAL
ALLOTMENT.—
For the purpose of providing additional allotments 
to States to provide FamilyCare coverage under sec-
tion 2111, there is appropriated, out of any money 
in the Treasury not otherwise appropriated—
‘‘(A) for fiscal year 2005, $7,000,000,000; 
‘‘(B) for fiscal year 2006, $7,000,000,000; 
‘‘(C) for fiscal year 2007, $3,000,000,000; 
‘‘(D) for fiscal year 2008, $3,000,000,000; 
‘‘(E) for fiscal year 2009, $6,000,000,000; 
‘‘(F) for fiscal year 2010, $7,000,000,000; 
‘‘(G) for fiscal year 2011, $8,000,000,000; 
‘‘(H) for fiscal year 2012, $9,000,000,000; 
and 
‘‘(I) for fiscal year 2013 and each fiscal 
year thereafter, the amount of the allotment 
provided under this paragraph for the preceding 
fiscal year increased by the percentage increase 
(if any) in the medical care expenditure cat-
egory of the Consumer Price Index for All 
Urban Consumers (United States city average). 
‘‘(2) STATE AND TERRITORIAL ALLOTMENTS.—
‘‘(A) IN GENERAL.—In addition to the al-
lotments provided under subsections (b) and 
(c), subject to paragraphs (3) and (4), of the
amount available for the additional allotments 
under paragraph (1) for a fiscal year, the Sec-
retary shall allot to each State with a State 
child health plan approved under this title—
‘‘(i) in the case of such a State other 
than a commonwealth or territory de-
scribed in clause (ii), the same proportion 
as the proportion of the State’s allotment 
under subsection (b) (determined without 
regard to subsection (f)) to 98.95 percent 
of the total amount of the allotments 
under such section for such States eligible 
for an allotment under this subparagraph 
for such fiscal year; and 
‘‘(ii) in the case of a commonwealth or 
territory described in subsection (c)(3), the 
same proportion as the proportion of the 
commonwealth’s or territory’s allotment 
under subsection (c) (determined without 
regard to subsection (f)) to 1.05 percent of 
the total amount of the allotments under 
such section for commonwealths and terri-
tories eligible for an allotment under this 
subparagraph for such fiscal year.
‘‘(B) AVAILABILITY AND REDISTRIBUTION 
OF
UNUSED
ALLOTMENTS.—In applying sub-
sections (e) and (f) with respect to additional 
allotments made available under this subsection, 
the procedures established under such sub-
sections shall ensure such additional allotments 
are only made available to States which have 
elected to provide coverage under section 2111. 
‘‘(3) USE OF ADDITIONAL ALLOTMENT.—Addi-
tional allotments provided under this subsection are 
not available for amounts expended before October 
1, 2004. Such amounts are available for amounts ex-
pended on or after such date for child health assist-
ance for targeted low-income children, as well as for 
parent health assistance for targeted low-income 
parents, and health care assistance for targeted low-
income pregnant women. 
‘‘(4) REQUIRING ELECTION TO PROVIDE COV-
ERAGE.—No payments may be made to a State 
under this title from an allotment provided under 
this subsection unless the State has made an elec-
tion to provide parent health assistance for targeted 
low-income parents, or health care assistance for 
targeted low-income pregnant women.’’.
(ii) 
CONFORMING
AMENDMENTS.—
Section 2104 of the Social Security Act 
(42 U.S.C. 1397dd) is amended—
(I) in subsection (a), by inserting 
‘‘subject to subsection (d),’’ after 
‘‘under this section,’’; 
(II) in subsection (b)(1), by in-
serting ‘‘and subsection (d)’’ after 
‘‘Subject to paragraph (4)’’; and 
(III) in subsection (c)(1), by in-
serting ‘‘subject to subsection (d),’’ 
after ‘‘for a fiscal year,’’. 
(C) NO COST-SHARING FOR PREGNANCY-
RELATED
BENEFITS.—Section 2103(e)(2) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1397cc(e)(2)) is amended—
(i) in the heading, by inserting ‘‘AND 
PREGNANCY-RELATED
SERVICES’’ 
after 
‘‘PREVENTIVE SERVICES’’; and 
(ii) by inserting before the period at 
the end the following: ‘‘and for pregnancy-
related services’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection apply to items and services fur-
nished on or after October 1, 2004, whether or not
regulations implementing such amendments have 
been issued. 
(b) RULES FOR IMPLEMENTATION BEGINNING WITH 
FISCAL YEAR 2006.—
(1) EXPANSION
OF
AVAILABILITY
OF
EN-
HANCED
MATCH
UNDER
MEDICAID
FOR
PRE-CHIP 
EXPANSIONS.—Paragraph (4) of section 1905(u) of 
the Social Security Act (42 U.S.C. 1396d(u)), as in-
serted by subsection (a)(1)(C), is amended—
(A) by amending clause (ii) of subpara-
graph (A) to read as follows: 
‘‘(ii) CERTAIN
PREGNANT
WOMEN.—Ex-
penditures for medical assistance for pregnant 
women under section 1902(l)(1)(A) in a family 
the income of which exceeds the 133 percent of 
the income official poverty line, but only if the 
income 
level 
established 
under 
section 
1902(l)(2) (or under a Statewide waiver under 
section 1115) for pregnant women is 185 per-
cent of the income official poverty line.’’; and 
(B) by adding at the end the following: 
‘‘(B) CHILDREN
IN
FAMILIES
WITH
INCOME 
ABOVE
MEDICAID
MANDATORY
LEVEL
NOT
PRE-
VIOUSLY
DESCRIBED.—The expenditures described 
in this subparagraph are expenditures (other than
expenditures described in paragraph (2) or (3)) for 
medical assistance made available to any child who 
is 
eligible 
for 
assistance 
under 
section 
1902(a)(10)(A) (other than under clause (i)) and 
the income of whose family exceeds the minimum in-
come level required under subsection 1902(l)(2) (or, 
if higher, the minimum level required under section 
1931 for that State) for a child of the age involved 
(treating any child who is 19 or 20 years of age as 
being 18 years of age).’’. 
(2) OFFSET
OF
ADDITIONAL
EXPENDITURES 
FOR
ENHANCED
MATCH
FOR
PRE-CHIP
EXPAN-
SION.—Section 1905 of the Social Security Act (42 
U.S.C. 1396d) is amended—
(A) in the fourth sentence of subsection 
(b), by inserting ‘‘(except in the case of expend-
itures described in subsection (u)(5))’’ after ‘‘do 
not exceed’’; 
(B) in subsection (u), by inserting after 
paragraph (4) (as inserted by subparagraph 
(C)), the following: 
‘‘(5) For purposes of the fourth sentence of sub-
section (b) and section 2105(a), the following payments 
under this title do not count against a State’s allotment 
under section 2104:
‘‘(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.’’. 
(C) 
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, 2005, 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, 2006, 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, 2005, 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—
(1) in paragraph (1), by striking ‘‘paragraph 
(2)’’ and inserting ‘‘paragraphs (2) and (4)’’; and 
(2) by adding at the end the following: 
‘‘(4)(A) A State may elect (in a plan amendment 
under this title) to provide medical assistance under this 
title for aliens who are lawfully residing in the United 
States (including battered aliens described in section 
431(c) of the Personal Responsibility and Work Oppor-
tunity Reconciliation Act of 1996) and who are otherwise 
eligible for such assistance, within any of the following eli-
gibility categories: 
‘‘(i) PREGNANT WOMEN.—Women during preg-
nancy (and during the 60-day period beginning on 
the last day of the pregnancy). 
‘‘(ii) CHILDREN.—Children (as defined under 
such plan), including optional targeted low-income 
children described in section 1905(u)(2)(B). 
‘‘(iii) PARENTS.—If the State has elected the 
eligibility category described in clause (ii), caretaker 
relatives who are parents (including individuals 
treated as a caretaker for purposes of carrying out 
section 1931) of children (described in such clause 
or otherwise) who are eligible for medical assistance 
under the plan.
‘‘(B)(i) In the case of a State that has elected to pro-
vide medical assistance to a category of aliens under sub-
paragraph (A), no debt shall accrue under an affidavit of 
support against any sponsor of such an alien on the basis 
of provision of assistance to such category and the cost 
of such assistance shall not be considered as an unreim-
bursed cost. 
‘‘(ii) The provisions of sections 401(a), 402(b), 403, 
and 421 of the Personal Responsibility and Work Oppor-
tunity Reconciliation Act of 1996 shall not apply to a 
State that makes an election under subparagraph (A).’’. 
(b) TITLE XXI.—Section 2107(e)(1) of the Social 
Security Act (42 U.S.C. 1397gg(e)(1)) is amended by add-
ing at the end the following: 
‘‘(E) Section 1903(v)(4) (relating to op-
tional coverage of permanent resident alien chil-
dren and parents), but only if the State has 
elected to apply such section to that category of 
children under title XIX.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section take effect on October 1, 2004, and apply to 
medical assistance and child health assistance furnished 
on or after such date, whether or not regulations imple-
menting such amendments have been issued.
SEC. 6. OPTIONAL COVERAGE OF CHILDREN THROUGH AGE 
20 UNDER THE MEDICAID PROGRAM AND 
TITLE XXI. 
(a) MEDICAID.—
(1) IN GENERAL.—Section 1902(l)(1)(D) of the 
Social Security Act (42 U.S.C. 1396a(l)(1)(D)) is 
amended by inserting ‘‘(or, at the election of a 
State, 20 or 21 years of age)’’ after ‘‘19 years of 
age’’. 
(2) CONFORMING AMENDMENTS.—
(A) Section 1902(e)(3)(A) of the Social Se-
curity Act (42 U.S.C. 1396a(e)(3)(A)) is 
amended by inserting ‘‘(or 1 year less than the 
age the State has elected under subsection 
(l)(1)(D))’’ after ‘‘18 years of age’’. 
(B) Section 1902(e)(12) of the Social Se-
curity Act (42 U.S.C. 1396a(e)(12)) is amend-
ed by inserting ‘‘or such higher age as the State 
has elected under subsection (l)(1)(D)’’ after 
‘‘19 years of age’’. 
(C) Section 1920A(b)(1) of the Social Se-
curity Act (42 U.S.C. 1396r–1a(b)(1)) is 
amended by inserting ‘‘or such higher age as 
the 
State 
has 
elected 
under 
section 
1902(l)(1)(D)’’ after ‘‘19 years of age’’.
(D) Section 1928(h)(1) of the Social Secu-
rity Act (42 U.S.C. 1396s(h)(1)) is amended by 
inserting ‘‘or 1 year less than the age the State 
has elected under section 1902(l)(1)(D)’’ before 
the period at the end. 
(E) Section 1932(a)(2)(A) of the Social 
Security Act (42 U.S.C. 1396u–2(a)(2)(A)) is 
amended by inserting ‘‘(or such higher age as 
the 
State 
has 
elected 
under 
section 
1902(l)(1)(D))’’ after ‘‘19 years of age’’. 
(b) TITLE XXI.—Section 2110(c)(1) of the Social 
Security Act (42 U.S.C. 1397jj(c)(1)) is amended by in-
serting ‘‘(or such higher age as the State has elected under 
section 1902(l)(1)(D))’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section take effect on January 1, 2005, and apply to 
medical assistance and child health assistance provided on 
or after such date, whether or not regulations imple-
menting such amendments have been issued. 
SEC. 7. ALLOWING STATES TO SIMPLIFY RULES FOR FAMI-
LIES. 
(a) PRESUMPTIVE ELIGIBILITY.—
(1) APPLICATION TO PRESUMPTIVE ELIGIBILITY 
FOR PREGNANT WOMEN UNDER MEDICAID.—Section 
1920(b) of the Social Security Act (42 U.S.C.
1396r–1(b)) is amended by adding at the end after 
and below paragraph (2) the following flush sen-
tence: 
‘‘The term ‘qualified provider’ includes a qualified entity 
as defined in section 1920A(b)(3).’’. 
(2) OPTIONAL APPLICATION OF PRESUMPTIVE 
ELIGIBILITY
PROVISIONS
TO
PARENTS.—Section 
1920A of the Social Security Act (42 U.S.C. 1396r–
1a) is amended by adding at the end the following: 
‘‘(e) A State may elect to apply the previous provi-
sions of this section to provide for a period of presumptive 
eligibility for medical assistance for a parent of a child 
with respect to whom such a period is provided under this 
section.’’. 
(3) APPLICATION UNDER TITLE XXI.—Section 
2107(e)(1)(D) of the Social Security Act (42 U.S.C. 
1397gg(e)(1)) is amended to read as follows: 
‘‘(D) Sections 1920 and 1920A (relating to 
presumptive eligibility).’’. 
(b) 12-MONTHS CONTINUOUS ELIGIBILITY.—
(1) MEDICAID.—Section 1902(e)(12) of the So-
cial Security Act (42 U.S.C. 1396a(e)(12)) is 
amended—
(A) by striking ‘‘At the option of the State, 
the plan may’’ and inserting ‘‘The plan shall’’;
(B) by striking ‘‘an age specified by the 
State (not to exceed 19 years of age)’’ and in-
serting ‘‘19 years of age (or such higher age as 
the 
State 
has 
elected 
under 
subsection 
(l)(1)(D)) or, at the option of the State, who is 
eligible for medical assistance as the parent of 
such a child’’; and 
(C) in subparagraph (A), by striking ‘‘a 
period (not to exceed 12 months) ’’ and insert-
ing ‘‘the 12-month period beginning on the 
date’’. 
(2) TITLE XXI.—Section 2102(b)(2) of such 
Act (42 U.S.C. 1397bb(b)(2)) is amended by adding 
at the end the following: ‘‘Such methods shall pro-
vide continuous eligibility for children under this 
title in a manner that is no less generous than the 
12-months continuous eligibility provided under sec-
tion 1902(e)(12) for children described in such sec-
tion under title XIX. If a State has elected to apply 
section 1902(e)(12) to parents, such methods may 
provide continuous eligibility for parents under this 
title in a manner that is no less generous than the 
12-months continuous eligibility provided under such 
section for parents described in such section under 
title XIX.’’.
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on July 1, 2005, 
whether or not regulations implementing such 
amendments have been issued. 
(c) PROVISION OF MEDICAID AND CHIP APPLICA-
TIONS AND INFORMATION UNDER THE SCHOOL LUNCH 
PROGRAM.—Section 9(b)(2)(B) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1758(b)(2)(B)) is 
amended—
(1) by striking ‘‘(B) Applications’’ and inserting 
‘‘(B)(i) Applications’’; and 
(2) by adding at the end the following: 
‘‘(ii)(I) Applications for free and reduced price 
lunches that are distributed pursuant to clause (i) to par-
ents or guardians of children in attendance at schools par-
ticipating in the school lunch program under this Act shall 
also contain information on the availability of medical as-
sistance under title XIX of the Social Security Act (42 
U.S.C. 1396 et seq.) and of child health and FamilyCare 
assistance under title XXI of such Act, including informa-
tion on how to obtain an application for assistance under 
such programs. 
‘‘(II) Information on the programs referred to in sub-
clause (I) shall be provided on a form separate from the
application form for free and reduced price lunches under 
clause (i).’’. 
SEC. 8. REVISION AND SIMPLIFICATION OF THE TRANSI-
TIONAL 
MEDICAL 
ASSISTANCE 
PROGRAM 
(TMA). 
(a) MAKING REPORTING REQUIREMENTS OPTIONAL; 
OPTION OF EXTENDED ELIGIBILITY.—
(1) OPTION FOR MAKING REPORTING REQUIRE-
MENTS OPTIONAL.—Section 1925(b) of the Social 
Security Act (42 U.S.C. 1396r–6(b)) is amended—
(A) in paragraph (1), by inserting ‘‘, at the 
option of a State,’’ after ‘‘and which’’; 
(B) in paragraph (2)(A), by inserting 
‘‘Subject to subparagraph (C)—’’ after ‘‘(A) 
NOTICES.—’’; 
(C) in paragraph (2)(B), by inserting 
‘‘Subject to subparagraph (C)—’’ after ‘‘(B) 
REPORTING REQUIREMENTS.—’’; 
(D) by adding at the end the following new 
subparagraph: 
‘‘(C) STATE
OPTION
TO
WAIVE
NOTICE 
AND
REPORTING
REQUIREMENTS.—A State 
may waive some or all of the reporting require-
ments under clauses (i) and (ii) of subpara-
graph (B). Insofar as it waives such a reporting
requirement, the State need not provide for a 
notice under subparagraph (A) relating to such 
requirement.’’; and 
(E) in paragraph (3)(A)(iii), by inserting 
‘‘the State has not waived under paragraph 
(2)(C) the reporting requirement with respect 
to such month under paragraph (2)(B) and if’’ 
after ‘‘6-month period if’’. 
(2) STATE
OPTION
TO
EXTEND
ELIGIBILITY 
FOR LOW-INCOME INDIVIDUALS FOR UP TO 12 ADDI-
TIONAL
MONTHS.—Section 1925 of such Act (42 
U.S.C. 1396r–6) is further amended—
(A) 
by 
redesignating 
subsections 
(c) 
through (f) as subsections (d) through (g); and 
(B) by inserting after subsection (b) the 
following new subsection: 
‘‘(c) STATE OPTION OF UP TO 12 MONTHS OF ADDI-
TIONAL ELIGIBILITY.—
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this title, each State plan approved 
under this title may provide, at the option of the 
State, that the State shall offer to each family which 
received assistance during the entire 6-month period 
under subsection (b) and which meets the applicable 
requirement of paragraph (2), in the last month of
the period the option of extending coverage under 
this subsection for the succeeding period not to ex-
ceed 12 months. 
‘‘(2) INCOME RESTRICTION.—The option under 
paragraph (1) shall not be made available to a fam-
ily for a succeeding period unless the State deter-
mines that the family’s average gross monthly earn-
ings (less such costs for such child care as is nec-
essary for the employment of the caretaker relative) 
as of the end of the 6-month period under sub-
section (b) does not exceed 185 percent of the offi-
cial poverty line (as defined by the Office of Man-
agement and Budget, and revised annually in ac-
cordance with section 673(2) of the Omnibus Budget 
Reconciliation Act of 1981) applicable to a family of 
the size involved. 
‘‘(3) APPLICATION
OF
EXTENSION
RULES.—
The provisions of paragraphs (2), (3), (4), and (5) 
of subsection (b) shall apply to the extension pro-
vided under this subsection in the same manner as 
they apply to the extension provided under sub-
section (b)(1), except that for purposes of this sub-
section—
‘‘(A) any reference to a 6-month period 
under subsection (b)(1) is deemed a reference
to the extension period provided under para-
graph (1) and any deadlines for any notices or 
reporting and the premium payment periods 
shall be modified to correspond to the appro-
priate calendar quarters of coverage provided 
under this subsection; and 
‘‘(B) any reference to a provision of sub-
section (a) or (b) is deemed a reference to the 
corresponding provision of subsection (b) or of 
this subsection, respectively.’’. 
(b) STATE OPTION TO WAIVE RECEIPT OF MED-
ICAID FOR 3 OF PREVIOUS 6 MONTHS TO QUALIFY FOR 
TMA.—Section 1925(a)(1) of such Act (42 U.S.C. 1396r–
6(a)(1)) is amended by adding at the end the following: 
‘‘A State may, at its option, also apply the previous sen-
tence in the case of a family that was receiving such aid 
for fewer than 3 months, or that had applied for and was 
eligible for such aid for fewer than 3 months, during the 
6 immediately preceding months described in such sen-
tence.’’. 
(c) ELIMINATION OF SUNSET FOR TMA.—
(1) Subsection (g) of section 1925 of such Act 
(42 U.S.C. 1396r–6), as redesignated under sub-
section (a)(2), is repealed.
(2) Section 1902(e)(1) of such Act (42 U.S.C. 
1396a(e)(1)) 
is 
amended 
by 
striking 
‘‘(A) 
Nothwithstanding’’ and all that follows through 
‘‘During such period, for’’ in subparagraph (B) and 
inserting ‘‘For’’. 
(d) CMS REPORT ON ENROLLMENT AND PARTICIPA-
TION RATES UNDER TMA.—Section 1925 of such Act, 
as amended by subsections (a)(2) and (c)(1), is amended 
by adding at the end the following new subsection: 
‘‘(g) ADDITIONAL PROVISIONS.—
‘‘(1) COLLECTION AND REPORTING OF PARTICI-
PATION INFORMATION.—Each State shall—
‘‘(A) collect and submit to the Secretary, 
in a format specified by the Secretary, informa-
tion on average monthly enrollment and average 
monthly participation rates for adults and chil-
dren under this section; and 
‘‘(B) make such information publicly avail-
able. 
Such information shall be submitted under subpara-
graph (A) at the same time and frequency in which 
other enrollment information under this title is sub-
mitted to the Secretary. Using such information, the 
Secretary shall submit to Congress annual reports 
concerning such rates.’’.
(e) COORDINATION OF WORK.—Section 1925(g) of 
such Act, as added by subsection (d), is amended by add-
ing at the end the following new paragraph: 
‘‘(2) COORDINATION
WITH
ADMINISTRATION 
FOR CHILDREN AND FAMILIES.—The Administrator 
of the Centers for Medicare & Medicaid Services, in 
carrying out this section, shall work with the Assist-
ant Secretary for the Administration for Children 
and Families to develop guidance or other technical 
assistance for States regarding best practices in 
guaranteeing access to transitional medical assist-
ance under this section.’’. 
(f) ELIMINATION
OF
TMA REQUIREMENT
FOR 
STATES THAT EXTEND COVERAGE TO CHILDREN AND 
PARENTS THROUGH 185 PERCENT OF POVERTY.—
(1) IN GENERAL.—Section 1925 of such Act is 
further amended by adding at the end the following 
new subsection: 
‘‘(h) PROVISIONS OPTIONAL FOR STATES THAT EX-
TEND COVERAGE TO CHILDREN AND PARENTS THROUGH 
185 PERCENT OF POVERTY.—A State may (but is not re-
quired to) meet the requirements of subsections (a) and 
(b) if it provides for medical assistance under section 1931 
to families (including both children and caretaker rel-
atives) the average gross monthly earning of which (less
such costs for such child care as is necessary for the em-
ployment of a caretaker relative) is at or below a level that 
is at least 185 percent of the official poverty line (as de-
fined by the Office of Management and Budget, and re-
vised annually in accordance with section 673(2) of the 
Omnibus Budget Reconciliation Act of 1981) applicable 
to a family of the size involved.’’. 
(2) CONFORMING AMENDMENTS.—Such section 
is further amended, in subsections (a)(1) and (b)(1), 
by inserting ‘‘, but subject to subsection (h),’’ after 
‘‘Notwithstanding any other provision of this title,’’ 
each place it appears. 
(g) EXTENDING USE OF OUTSTATIONED WORKERS 
TO ACCEPT APPLICATIONS FOR TRANSITIONAL MEDICAL 
ASSISTANCE.—Section 1902(a)(55) of such Act (42 
U.S.C. 1396a(a)(55)) is amended by inserting ‘‘and under 
section 1931’’ after ‘‘(a)(10)(A)(ii)(IX)’’. 
(h) EFFECTIVE DATES.—(1) Except as provided in 
this subsection, the amendments made by this section shall 
apply to calendar quarters beginning on or after the date 
of the enactment of this Act, without regard to whether 
or not final regulations to carry out such amendments 
have been promulgated by such date. 
(2) In the case of a State plan for medical assistance 
under title XIX of the Social Security Act which the Sec-
retary of Health and Human Services determines requires 
State legislation (other than legislation appropriating 
funds) in order for the plan to meet the additional require-
ments imposed by the amendments made by this section, 
the State plan shall not be regarded as failing to comply 
with the requirements of such title solely on the basis of 
its failure to meet these additional requirements before the 
first day of the first calendar quarter beginning after the 
close of the first regular session of the State legislature 
that begins after the date of the enactment of this Act. 
For purposes of the previous sentence, in the case of a 
State that has a 2-year legislative session, each year of 
such session shall be deemed to be a separate regular ses-
sion of the State legislature.
SEC. 9. LIMITATIONS ON CONFLICTS OF INTEREST. 
(a) LIMITATION
ON CONFLICTS
OF INTEREST
IN 
MARKETING ACTIVITIES.—
(1) TITLE XXI.—Section 2105(c) of the Social 
Security Act (42 U.S.C. 300aa–5(c)) is amended by 
adding at the end the following: 
‘‘(8) LIMITATION ON EXPENDITURES FOR MAR-
KETING ACTIVITIES.—Amounts expended by a State 
for the use of an administrative vendor in marketing 
health benefits coverage to low-income children 
under this title shall not be considered, for purposes
of subsection (a)(2)(D), to be reasonable costs to ad-
minister the plan unless the following conditions are 
met with respect to the vendor: 
‘‘(A) The vendor is independent of any en-
tity offering the coverage in the same area of 
the State in which the vendor is conducting 
marketing activities. 
‘‘(B) No person who is an owner, em-
ployee, consultant, or has a contract with the 
vendor either has any direct or indirect finan-
cial interest with such an entity or has been ex-
cluded from participation in the program under 
this title or title XVIII or XIX or debarred by 
any Federal agency, or subject to a civil money 
penalty under this Act.’’. 
(b) PROHIBITION OF AFFILIATION WITH DEBARRED 
INDIVIDUALS.—
(1) MEDICAID.—Section 1903(i) of the Social 
Security Act (42 U.S.C. 1396b(i))is amended—
(A) by striking the period at the end of 
paragraph (20) and inserting ‘‘; or’’; and 
(B) by inserting after paragraph (20) the 
following:
‘‘(21) with respect to any amounts expended for 
an entity that receives payments under the plan un-
less—
‘‘(A) no person with an ownership or con-
trol interest (as defined in section 1124(a)(3)) 
in the entity is a person that is debarred, sus-
pended, or otherwise excluded from partici-
pating in procurement or non-procurement ac-
tivities under the Federal Acquisition Regula-
tion; and 
‘‘(B) such entity has not entered into an 
employment, consulting, or other agreement for 
the provision of items or services that are mate-
rial to such entity’s obligations under the plan 
with a person described in subparagraph (A).’’. 
(2) TITLE XXI.—Section 2107(e)(1) of the So-
cial Security Act (42 U.S.C. 1397gg(e)(1)), as 
amended by section 5(b), is further amended—
(A) in subparagraph (B), by striking ‘‘and 
(17)’’ and inserting ‘‘(17), and (21)’’; and 
(B) by adding at the end the following: 
‘‘(F) Section 1902(a)(67) (relating to pro-
hibition of affiliation with debarred individ-
uals).’’.
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenditures made on or after 
July 1, 2005, whether or not regulations implementing 
such amendments have been issued. 
SEC. 10. INCREASE IN CHIP ALLOTMENT FOR EACH OF FIS-
CAL YEARS 2002 THROUGH 2004. 
Effective as if included in the enactment of the Bal-
anced Budget Act of 1997, paragraphs (5), (6), and (7) 
of section 2104(a) of the Social Security Act (42 U.S.C. 
1397dd(a)) are amended by striking ‘‘$3,150,000,000’’ 
each place it appears and inserting ‘‘$4,150,000,000’’. 
SEC. 11. DEMONSTRATION PROGRAMS TO IMPROVE MED-
ICAID AND CHIP OUTREACH TO HOMELESS 
INDIVIDUALS AND FAMILIES. 
(a) AUTHORITY.—The Secretary of Health and 
Human Services may award demonstration grants to not 
more than 7 States (or other qualified entities) to conduct 
innovative programs that are designed to improve out-
reach to homeless individuals and families under the pro-
grams described in subsection (b) with respect to enroll-
ment of such individuals and families under such pro-
grams and the provision of services (and coordinating the 
provision of such services) under such programs. 
(b) PROGRAMS FOR HOMELESS DESCRIBED.—The 
programs described in this subsection are as follows:
(1) MEDICAID.—The program under title XIX 
of the Social Security Act (42 U.S.C. 1396 et seq.). 
(2) CHIP.—The program under title XXI of 
the Social Security Act (42 U.S.C. 1397aa et seq.). 
(3) TANF.—The program under part of A of 
title IV of the Social Security Act (42 U.S.C. 601 
et seq.). 
(4) SAMHSA BLOCK GRANTS.—The program 
of grants under part B of title XIX of the Public 
Health Service Act (42 U.S.C. 300x–1 et seq.). 
(5) FOOD
STAMP
PROGRAM.—The program 
under the Food Stamp Act of 1977 (7 U.S.C. 2011 
et seq.). 
(6) WORKFORCE INVESTMENT ACT.—The pro-
gram under the Workforce Investment Act of 1999 
(29 U.S.C. 2801 et seq.). 
(7) WELFARE-TO-WORK.—The welfare-to-work 
program under section 403(a)(5) of the Social Secu-
rity Act (42 U.S.C. 603(a)(5)). 
(8) OTHER PROGRAMS.—Other public and pri-
vate benefit programs that serve low-income individ-
uals. 
(c) APPROPRIATIONS.—For the purposes of carrying 
out this section, there is appropriated for fiscal year 2005,
out of any funds in the Treasury not otherwise appro-
priated, $10,000,000, to remain available until expended. 
SEC. 12. ADDITIONAL CHIP REVISIONS.
(a) LIMITING COST-SHARING TO 2.5 PERCENT FOR 
FAMILIES WITH INCOME BELOW 150 PERCENT OF POV-
ERTY.—Section 2103(e)(3)(A) of the Social Security Act 
(42 U.S.C. 1397cc(e)(3)(A)) is amended—
(1) by striking ‘‘and’’ at the end of clause (i); 
(2) by striking the period at the end of clause 
(ii) and inserting ‘‘; and’’; and 
(3) by adding at the end the following new 
clause: 
‘‘(iii) total annual aggregate cost-
sharing described in clauses (i) and (ii) 
with respect to all such targeted low-in-
come children in a family under this title 
that exceeds 2.5 percent of such family’s 
income for the year involved.’’. 
(b) EMPLOYER COVERAGE WAIVER CHANGES.—Sec-
tion 2105(c)(3) of such Act (42 U.S.C. 1397ee(c)(3)) is 
amended—
(1) by redesignating subparagraphs (A) and 
(B) as clauses (i) and (ii) and indenting appro-
priately;
(2) by designating the matter beginning with 
‘‘Payment may be made’’ as a subparagraph (A) 
with the heading ‘‘IN GENERAL’’ and indenting ap-
propriately; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(B) APPLICATION OF REQUIREMENTS.—
In carrying out subparagraph (A)—
‘‘(i) in determining cost-effectiveness, 
the Secretary shall measure against family 
coverage costs to the extent that a State 
has expanded coverage to parents pursuant 
to section 2111; 
‘‘(ii) subject to clause (iii), the State 
shall provide satisfactory assurances that 
the minimum benefits and cost-sharing 
protections established under this title are 
provided, either through the coverage 
under subparagraph (A) or as a supple-
ment to such coverage; and 
‘‘(iii) coverage under such subpara-
graph shall not be considered to violate 
clause (ii) because it does not comply with 
requirements relating to reviews of health 
service decisions if the enrollee involved is
provided the option of being provided bene-
fits directly under this title.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section apply as of January 1, 2005, whether or not 
regulations implementing such amendments have been 
issued. 
SEC. 13. INCREASED FEDERAL REIMBURSEMENT FOR LAN-
GUAGE SERVICES UNDER THE MEDICAID 
PROGRAM AND TITLE XXI. 
(a) MEDICAID.—Section 1903(a)(3) of the Social Se-
curity Act (42 U.S.C. 1396b(a)(3)) is amended—
(1) in subparagraph (D), by striking ‘‘plus’’ at 
the end and inserting ‘‘and’’; and 
(2) by adding at the end the following: 
‘‘(E) 90 percent of the sums expended with 
respect to costs incurred during such quarter as 
are attributable to the provision of language 
services, including oral interpretation, trans-
lations of written materials, and other language 
services, for individuals with limited English 
proficiency who apply for, or receive, medical 
assistance under the State plan; plus’’.
(b) SCHIP.—Section 2105(a)(1) of the Social Secu-
rity Act (42 U.S.C.1397ee(a)) is amended—
(1) in the matter preceding subparagraph (A), 
by inserting ‘‘or, in the case of expenditures de-
scribed in subparagraph (D)(iv), 90 percent’’ after 
‘‘enhanced FMAP’’; and 
(2) in subparagraph (D)—
(A) in clause (iii), by striking ‘‘and’’ at the 
end; 
(B) be redesignating clause (iv) as clause 
(v); and 
(C) by inserting after clause (iii) the fol-
lowing: 
‘‘(iv) for expenditures attributable to 
the provision of language services, includ-
ing oral interpretation, translations of 
written materials, and other language serv-
ices, for individuals with limited English 
proficiency who apply for, or receive, child 
health assistance under the plan; and’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section take effect on January 1, 2005.
Æ