‘‘(c) ENROLLMENT.— 
‘‘(1) STREAMLINED
ENROLLMENT
SYSTEM.— 
Each State plan shall provide for a system of 
streamlined enrollment that includes the following 
(as specified by the Secretary): 
‘‘(A) A simple, short application form 
translated into multiple languages. 
‘‘(B) Applicant self-attestation of eligi-
bility, subject to verification, random audits, or 
both. 
‘‘(C) The option for applications to be sub-
mitted in-person, on-line, by mail, or as part of 
applications for other programs. 
‘‘(D) Automatic enrollment, as provided 
under paragraph (2). 
‘‘(E) 12-month continuous eligibility for 
children. 
‘‘(F) Presumptive eligibility during an in-
terim period of coverage for individuals who ap-
pear to qualify for assistance under this title, 
on the basis of preliminary information. 
‘‘(G) A determination of continued eligi-
bility at the end of an individual’s eligibility pe-
riod, based on all data available to the State. If 
such determination cannot be made, the indi-
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vidual or family shall be contacted for addi-
tional information, but only to the extent such 
information is not available to State officials 
from other sources. The family shall be notified 
of all determinations and findings and given an 
opportunity to contest and appeal them. An in-
dividual’s eligibility shall continue until the re-
determination process is complete. 
‘‘(2) AUTOMATIC ENROLLMENT PROCEDURES.— 
‘‘(A) IN GENERAL.—The automatic enroll-
ment procedures under this paragraph shall in-
clude enrollment of any all healthy children eli-
gible individual at the following points, unless 
the individual (or parent or guardian on the in-
dividual’s behalf) affirmatively declines such en-
rollment: 
‘‘(i) Unless the individual otherwise 
establishes enrollment in health benefits 
plan or coverage, at the point of a final de-
termination— 
‘‘(I) of individual’s eligibility to 
participate in any federally-funded, 
means-tested program, regardless of 
any differences between the program’s 
eligibility or income methodology and 
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those otherwise used under this title, 
or 
‘‘(II) that, based on the income 
determinations made as part of such 
eligibility determination, the indi-
vidual is eligible to participate under 
this title. 
‘‘(ii) Birth of a child in the United 
States. 
‘‘(iii) Assignment of a social security 
account number for a child. 
‘‘(iv) A visit with any health care pro-
vider eligible to participate in the program 
established under this title. 
‘‘(v) Enrollment in any public elemen-
tary or secondary school within the State 
or any other elementary or secondary 
school subject to mandatory immunization 
requirements. 
‘‘(vi) Enrollment in a publicly-sub-
sidized child care program. 
‘‘(vii) Upon discharge of a child from 
a public institution or other institution 
where the child has been confined. 
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‘‘(viii) Such other points of enrollment 
as the State or Secretary may establish. 
For purposes of this subparagraph, the term 
‘federally-funded, means-tested program’ in-
cludes the National School Lunch Program 
under the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1751 et seq.), the Food 
Stamp Program under the Food Stamp Act of 
1977, the special supplemental nutrition pro-
gram for women, infants, and children (WIC) 
under section 17 of the Child Nutrition Act of 
1966 (42 U.S.C. 1786), subsidized child care 
under the Child Care Development Block Grant 
Act of 1990 (42 U.S.C. 9858 et seq.), programs 
carried out under the Head Start Act (42 
U.S.C. 9831 et seq.), and other means-tested 
programs designated by the Secretary. 
‘‘(B) OPERATION OF AUTOMATIC ENROLL-
MENT.— 
‘‘(i) IN
GENERAL.—In the case of 
automatic enrollment under subparagraph 
(A)— 
‘‘(I) the enrolled individual (or 
parents or guardians of such indi-
vidual) shall be advised of the level of 
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premiums and cost-sharing applicable 
consistent with section 2203 and the 
fact that enrollment is conditioned 
upon payment of any applicable pre-
miums; and 
‘‘(II) the failure to pay any ini-
tial applicable premiums shall be 
treated as an affirmative rejection of 
coverage. 
‘‘(ii) NOTICE.—The State plan shall 
implement effective procedures, consistent 
with the Secretary’s guidelines, for ensur-
ing that— 
‘‘(I) auto-enrolled individuals (or 
their parents or guardians) under-
stand their right to decline the cov-
erage made available through auto-en-
rollment; and 
‘‘(II) after enrollment, they re-
ceive confirmation of coverage and in-
formation on benefits. 
‘‘(iii) EQUAL
TREATMENT.—A State 
plan shall implement effective procedures 
to ensure that individuals covered through 
auto-enrollment do not receive fewer serv-
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ices, on average, than do similar individ-
uals enrolled through other means. 
‘‘(iv) INFORMATION
SHARING.—Each 
State shall develop the information tech-
nology infrastructure needed for automated 
transmission and analysis of data involving 
means-tested programs referred to in sub-
paragraph (A) and other sources of data 
pertinent to eligibility under this title, in-
cluding State and Federal income tax 
records and information contained in the 
National Directory of New Hires. Con-
sistent with standards developed by the 
Secretary, the State shall implement effec-
tive safeguards that protect the confiden-
tiality of such data and limit its use to the 
effective administration of this title, includ-
ing an identification of potentially eligible 
individuals not enrolled in the State plan 
as well as eligibility verification. 
‘‘(3) OUTREACH.—Each State plan shall pro-
vide for a system for culturally and linguistically 
competent outreach to families of potentially eligible 
individuals, which shall— 
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‘‘(A) be fully accessible to those whose 
ability to communicate is affected by disability; 
and 
‘‘(B) incorporate proactive communication 
(via telephone or in-person visits) to such fami-
lies, consumer education, a preliminary or final 
eligibility determination, and enrollment com-
pleted within a single encounter, whenever pos-
sible, and proactive follow-up, when necessary. 
‘‘(d) AVOIDING CROWD-OUT
AND COORDINATION 
WITH OTHER HEALTH COVERAGE PROGRAMS.— 
‘‘(1) IN GENERAL.—The State plan shall in-
clude a description of procedures, consistent with 
this subsection, to be used to ensure— 
‘‘(A) that benefits provided under the 
State all healthy children plan do not substitute 
for coverage under group health plans; 
‘‘(B) the provision of all healthy children 
assistance to all healthy children eligible indi-
viduals in the State who are Indians (as defined 
in section 4(c) of the Indian Health Care Im-
provement Act, 25 U.S.C. 1603(c)); and 
‘‘(C) coordination with other public and 
private programs providing creditable coverage 
for low-income children and pregnant women. 
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‘‘(2) GROUP
HEALTH
PLAN
COVERAGE
PER-
MITTED.—Notwithstanding paragraph (1)(A), a 
State plan may not deny enrollment under this title 
in the case of any of the following individuals or cir-
cumstances: 
‘‘(A) The individual would have qualified 
for medical assistance under title XIX under 
State law as in effect on October 1, 2005. 
‘‘(B) The individual has family income that 
does not exceed 150 percent of the poverty line. 
‘‘(C) The individual’s enrollment under a 
group health plan— 
‘‘(i) ended more than four months be-
fore applying for enrollment under this 
title; or 
‘‘(ii) was involuntarily terminated be-
cause of the death of a parent, job loss, or 
other circumstance. 
‘‘(D) Other than for the subsidies de-
scribed in section 2203(b)(2)(B) (in the case of 
all healthy children eligible individuals with 
family income that exceeds 300 percent of the 
poverty line), the failure of a parent or other in-
dividual (other than the enrollee) to enroll the 
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all healthy children eligible individual in an 
available group health plan. 
‘‘(3) SUPPLEMENTAL COVERAGE.— 
‘‘(A) IN GENERAL.—In the case of an all 
healthy children eligible individual who is en-
rolled in a group health plan, the State plan— 
‘‘(i) must provide full supplemental 
coverage (described in subparagraph (B)) 
if— 
‘‘(I) the individual would have 
qualified for supplemental coverage 
under title XIX under State law as in 
effect on October 1, 2005; or 
‘‘(II) the individual is disabled 
(as defined for purposes of the supple-
mental 
security 
income 
program 
under title XVI); and 
‘‘(ii) may provide some or all of such 
coverage to other healthy children eligible 
individuals (or to reasonable classifications 
of such individuals, as specified under the 
State plan). 
‘‘(B) FULL SUPPLEMENTAL COVERAGE DE-
SCRIBED.—Full 
supplemental 
coverage 
de-
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scribed in this subparagraph includes the fol-
lowing: 
‘‘(i) Benefits covered by the State 
plan that are outside the scope of benefits 
offered under the group health plan. 
‘‘(ii) Reimbursement of families’ pre-
mium payments under the group health 
plan for all healthy children eligible indi-
viduals so that costs do not exceed levels 
otherwise permitted by the State plan. 
‘‘(iii) Coverage of out-of-pocket costs 
incurred under the group health plan 
where such coverage prevents those costs 
from exceeding the levels otherwise per-
mitted under the State plan. 
‘‘(e) ASSISTANCE FOR CHILDREN WHO AGE OUT OF 
ASSISTANCE.—The State plan shall provide assistance in 
obtaining health benefits to individuals who lose eligibility 
under this title because of age. 
‘‘(f) EMERGENCY COVERAGE.—When an all healthy 
children eligible individual enrolled in a State plan in one 
State moves to another State because of natural disaster 
or other reasons, the individual shall receive immediate 
and automatic presumptive eligibility under this title in 
the State to which the individual moves. 
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‘‘SEC. 2203. BENEFITS; PREMIUMS; COST-SHARING; PRO-
VIDER PAYMENT RATES. 
‘‘(a) BENEFITS.— 
‘‘(1) IN GENERAL.—The all healthy children as-
sistance under this title shall include benefits for all 
medically necessary health care, including early and 
periodic screening, diagnostic, and treatment serv-
ices (as defined in section 1905(r)) consistent with 
the requirements of section 1902(a)(43). 
‘‘(2) BENEFIT PROTECTIONS.—The State plan 
shall provide for all benefit protections for all 
healthy children eligible individuals that would oth-
erwise have applied under title XIX if such individ-
uals were entitled to medical assistance under such 
title, including the application of no preexisting ex-
clusion. 
‘‘(b) PREMIUMS.—Subject to subsection (d)— 
‘‘(1) NO PREMIUM FOR LOWER-INCOME INDI-
VIDUALS.—For all healthy children eligible individ-
uals described in subparagraph (A) or (B) of section 
2202(b)(1), there shall be no premium imposed for 
coverage under this title. 
‘‘(2) REQUIRED PREMIUMS FOR BUY-IN ELIGI-
BLE INDIVIDUALS.— 
‘‘(A) IN GENERAL.—Except as provided in 
this paragraph, in the case of all healthy chil-
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dren eligible individuals described in section 
2202(b)(1)(C), the premium for coverage under 
this title shall be such premium (as estimated 
under a methodology specified by the Secretary) 
as is equal to the full average per capita cost 
of benefits for children (or pregnant women, as 
the case may be) under the State all healthy 
children plan. 
‘‘(B) PROVISION OF PREMIUM SUBSIDY.— 
‘‘(i) IN GENERAL.—Subject to clause 
(ii), in no case shall the premium for cov-
erage under this title exceed (taking into 
account any private coverage in which the 
individual is enrolled as well as supple-
mental coverage purchased under this 
title)— 
‘‘(I) 7.5 percent of the family in-
come; or 
‘‘(II) in the case of multiple eligi-
ble individuals within the same family, 
15 percent of family income. 
‘‘(ii) LIMITATION.—Clause (i) shall 
not apply for a healthy child eligible indi-
vidual in a family if— 
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‘‘(I) the individual could be cov-
ered under a group health plan for 
which the employer (or other plan 
sponsor) provides for payment of at 
least 50 percent of the premium for 
coverage of such individual; and 
‘‘(II) the individual is not so cov-
ered because of a rejection of such 
coverage option. 
‘‘(C) OPTIONAL SUBSIDIES.—A State plan 
may reduce premiums otherwise imposed for 
reasonable classifications of all healthy children 
eligible 
individuals 
described 
in 
section 
2202(b)(1)(C). Such classifications may in-
clude— 
‘‘(i) individuals with family income 
within specific income ranges; 
‘‘(ii) individuals with special health 
care needs; and 
‘‘(iii) individuals who could have 
qualified for medical assistance under an 
optional eligibility category under title XIX 
(as in effect as of January 1, 2007). 
‘‘(3) PREMIUM PAYMENTS.— 
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‘‘(A) IN GENERAL.—The State all healthy 
children plan shall provide effective measures, 
consistent with standards established by the 
Secretary, to make premium payment simple 
and convenient to parents (or other payers) and 
to preserve continuity of coverage. Such meas-
ures shall include— 
‘‘(i) discounts to encourage the pay-
ment of quarterly or annual premiums in 
advance; 
‘‘(ii) options to make premium pay-
ments automatically by credit card, debit 
account payments, electronic fund trans-
fers, payroll withholding, or otherwise; and 
‘‘(iii) payment opportunities at mul-
tiple, convenient community locations. 
‘‘(B) PROMOTING
CONTINUITY
OF
COV-
ERAGE.—In the case of all healthy children eli-
gible individuals for whom premium payments 
are required under the State plan, the plan 
shall have effective procedures to prevent pre-
mium non-payment from interrupting con-
tinuity of coverage. If there is a default on pre-
mium payments, the State plan shall provide 
reasonable opportunities to cure such default, 
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including at least a 60-day period, following no-
tice of default, during which overdue premium 
payments may be made without interrupting 
coverage or incurring interest charges, late fees, 
or other costs. 
‘‘(c) COST-SHARING.— 
‘‘(1) LIMITATIONS.—Subject to subsection (d), 
for all healthy children eligible individuals with a 
family income that— 
‘‘(A) does not exceed 200 percent of the 
poverty line, there shall be no out-of-pocket 
cost-sharing imposed; 
‘‘(B) does exceed 200 percent, but does not 
exceed 300 percent, of the poverty line, only 
nominal out-of-pocket cost-sharing may be im-
posed; or 
‘‘(C) exceeds 300 percent of the poverty 
line, out-of-pocket cost-sharing charged may not 
exceed levels the Secretary finds to be con-
sistent with charges under employer-based 
health insurance for the majority of employees 
enrolled in such coverage nationally. 
In no case shall a child described in subparagraph 
(A) or (B) of section 2202(b)(1) be denied services 
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under this title because of failure to pay out-of-pock-
et cost-sharing. 
‘‘(2) WAIVER.—A state may elect to waive or 
reduce out-of-pocket cost-sharing otherwise author-
ized under this subsection. 
‘‘(d) LIMITATIONS ON OUT-OF-POCKET COSTS.— 
‘‘(1) 
CURRENT
MEDICAID.—For 
each 
all 
healthy children eligible individual, premiums and 
out-of-pocket cost-sharing may not exceed the levels 
that would have been charged for that individual 
under State Medicaid and SCHIP law as of October 
1, 2005, updated in a manner specified by the Sec-
retary based on changes, after that date, to average 
earnings among families with incomes that do not 
exceed 200 percent of the poverty line. 
‘‘(2) AFFORDABILITY.—The State plan shall 
provide effective measures, consistent with standards 
established by the Secretary, to further limit out-of- 
pocket cost-sharing (taking into account both pre-
miums and cost-sharing) of all healthy children eligi-
ble individuals to affordable levels, for both indi-
vidual health care services and total family costs. 
Such measures may include coding of each individ-
ual’s enrollment card. Such measures may not in-
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clude a requirement that households track incurred 
costs. 
‘‘(e) CHOICE OF PLANS.—To the extent feasible, a 
State plan must provide, insofar as the plan provides for 
benefits through enrollment in a health benefits plan, for 
each enrollee to have a choice of at least two health plan 
options, consistent with the requirements of section 1932. 
‘‘(f) REIMBURSEMENT RATES.—The State shall es-
tablish under the State plan, in consultation with appro-
priate child health providers and experts— 
‘‘(1) payment rates for providers that are— 
‘‘(A) not less than 80 percent of the aver-
age of payment rates for similar services for 
providers under private health insurance plans 
within that State; and 
‘‘(B) sufficient in amount to ensure that 
enrolled all healthy children eligible individuals 
have adequate access to all services covered 
under this title; and 
‘‘(2) payments rates to capitated plans that are 
actuarially sound, based on comprehensive encounter 
data. 
‘‘SEC. 2204. PAYMENTS TO STATES. 
‘‘(a) PAYMENT.—Subject to the succeeding provisions 
of this section, the Secretary shall pay to each State with 
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a plan approved under this title, an amount for each quar-
ter equal to the Federal all healthy children matching rate 
for the State (as determined under subsection (b)) of the 
total expenditures under the plan for the quarter, except 
that the matching rate for the development and operation 
of information technology shall be the same as the Federal 
matching percentage in effect for such technology under 
subparagraphs (A) and (B) of section 1903(a)(3). 
‘‘(b) COMPUTATION
OF FEDERAL ALL HEALTHY 
CHILDREN MATCHING RATE.— 
‘‘(1) IN GENERAL.—Subject to paragraph (3), 
the Federal all healthy children matching rate under 
this subsection for a State for a calendar quarter in 
a fiscal year is equal to the ratio of— 
‘‘(A) the total expenditures under the 
State plan under this title for the quarter that 
are attributable to required populations and 
services, less the State share of basic expendi-
tures described in paragraph (2), to 
‘‘(B) the total expenditures referred to in 
subparagraph (A). 
‘‘(2) STATE
SHARE
FOR
BASIC
EXPENDI-
TURES.— 
‘‘(A) IN GENERAL.—The State share of ex-
penditures attributable to required populations 
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and services under this title for a quarter in a 
fiscal year is equal to 1⁄4 of the product of the 
following: 
‘‘(i) BASE
AMOUNT.—The base FY 
2006 amount (specified in subparagraph 
(B) for the State). 
‘‘(ii) CHILD INCREASE FACTOR.—One 
plus the percentage increase in the number 
of children residing in the State, as esti-
mated by the Secretary, from fiscal year 
2006 to the fiscal year involved. 
‘‘(iii) COST INCREASE FACTOR.—One 
plus the percentage increase in the medical 
care component of the consumer price 
index for all urban consumers (U.S. city 
average), as estimated by the Secretary, 
from fiscal year 2006 to the fiscal year in-
volved. 
‘‘(B) BASE
FY
2006
AMOUNT.—For pur-
poses of this paragraph, the ‘base FY 2006 
amount’ for a State is equal to the sum of— 
‘‘(i) the total amount of expenditures 
made by the State during calendar quar-
ters in fiscal year 2006 under title XIX 
(including under any waiver under section 
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1115) that are attributable to coverage of 
individuals who meet the requirement to be 
all healthy children eligible individuals, in-
cluding an appropriate portion of adminis-
trative expenses, reduced by the amount of 
Federal financial participation provided 
with respect to such expenditures; and 
‘‘(ii) the total amount of expenditures 
made by the State during calendar quar-
ters in fiscal year 2006 under title XXI 
(including under any waiver under section 
1115), reduced by the amount of payment 
received by the State under such title for 
such quarters. 
‘‘(3) 
COUNTER-CYCLICAL
REDUCTION.—The 
Secretary shall establish a formula for providing, in 
addition to the base Federal matching amounts, 
automatic supplemental assistance to States that ex-
perience a sustained economic downturn, based upon 
State’s quarterly unemployment rate exceeding the 
State’s average of such rates during a period of pre-
vious calendar quarters (in such number as the Sec-
retary shall specify) and by a percentage to be deter-
mined by the Secretary and in an amount calculated 
on the basis of the relationship between changes in 
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unemployment and anticipated increases in providing 
services under this title. The supplemental assistance 
shall be distributed quarterly through a supplement 
to the State’s Federal payment and shall be for such 
duration as the Secretary determines appropriate. 
‘‘(c) BONUS
FOR MEETING ENROLLMENT TAR-
GETS.—The Secretary is authorized to establish a system 
for providing additional bonus payments for States that 
meet or exceed enrollment targets established for each 
State by the Secretary, taking into account the cir-
cumstances in each State. 
‘‘(d) ADVANCE PAYMENT; RETROSPECTIVE ADJUST-
MENT.—The Secretary may make payments under this 
section for each quarter on the basis of advance estimates 
of expenditures submitted by the State and such other in-
vestigation as the Secretary may find necessary, and may 
reduce or increase the payments as necessary to adjust 
for any overpayment or underpayment for prior quarters. 
‘‘(e) TREATMENT OF TERRITORIES.—In the case of 
States that are not one of the 50 States or the District 
of Columbia, the Secretary shall by regulation establish 
an equitable formula for allocating funds to provide serv-
ices to all all healthy children eligible individuals residing 
in such States. 
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‘‘SEC. 2205. APPLICATION OF SCHIP, MEDICAID AND RE-
LATED SSA PROVISIONS; WAIVERS; ADMINIS-
TRATION. 
‘‘(a) SCHIP PROVISIONS RELATING TO PLAN SUB-
MISSION, STRATEGIC OBJECTIVES
AND PERFORMANCE 
GOALS, AND AUDITS.—Except to the extent inconsistent 
with the provisions of this title, sections 2106, 2107, and 
2108(d) shall apply with respect to State plans under this 
title in the same manner as they applied with respect to 
State plans under title XXI. 
‘‘(b) MEDICAID PROVISIONS.—Except to the extent 
inconsistent with the provisions of this title, the provisions 
of title XIX (and the provisions of title XI, including sec-
tion 1115, insofar as they are applicable to title XIX) shall 
apply to activities under this title. 
‘‘(c) LIMITATION ON WAIVERS.—No waiver shall be 
granted under section 1115 with respect to this title if 
it is likely to result in— 
‘‘(1) an increase in health care or health pre-
mium costs for all healthy children eligible individ-
uals under this title; or 
‘‘(2) a reduction in benefits, eligibility, guaran-
teed eligibility, health care access, or health care 
quality for such individuals under this title. 
‘‘(d) 
ANNUAL
REPORTS.—The 
Secretary 
shall 
present annual reports to Congress describing implemen-
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tation of this title. Such reports shall include a description 
of— 
‘‘(1) optional coverage chosen by States; and 
‘‘(2) for each category of coverage and method 
of enrollment, nationwide and State-specific data 
showing the number and characteristics of all 
healthy children eligible individuals receiving cov-
erage, services provided, categories and amounts of 
expenditures. 
‘‘SEC. 2206. DEFINITIONS. 
‘‘(a) IN GENERAL.—For purposes of this title: 
‘‘(1) ALL HEALTHY CHILDREN ELIGIBLE INDI-
VIDUAL.—The term ‘all healthy children eligible in-
dividual’ means individuals described in section 
2202(b)(1). 
‘‘(2) ALL HEALTHY CHILDREN ASSISTANCE.— 
The term ‘all healthy children assistance’ means 
payment under this title for part or all of the cost 
of health benefits coverage for all healthy children 
eligible individual. 
‘‘(3) CHILD, GROUP HEALTH PLAN, AND POV-
ERTY LINE.—The terms ‘child’, ‘group health plan’, 
and ‘poverty line’ have the meanings given such 
terms in section 2110(c). 
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