centage (as determined under sub-
clause (II)) of the total amount allot-
ted to the State, Indian tribe, Native 
Hawaiian organization, or Alaska Na-
tive organization under section 2204. 
‘‘(II) 
APPLICABLE
PERCENT-
AGE.—For purposes of subclause (I), 
the applicable percentage is— 
‘‘(aa) 10 percent for 2006 
through 2010; and 
‘‘(bb) 3 percent for 2011 
and each year thereafter. 
‘‘(2) ADVANCE PAYMENT; RETROSPECTIVE AD-
JUSTMENT.—The Secretary may make payments 
under this part for each quarter on the basis of ad-
vance estimates by the State and such other inves-
tigation 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. 
‘‘(3) FLEXIBILITY IN SUBMITTAL OF CLAIMS.— 
Nothing in this subsection shall be construed as pre-
venting a State from claiming as expenditures in the 
quarter expenditures that were incurred in a pre-
vious quarter.
‘‘(b) AUTHORITY FOR BLENDED RATE FOR HEALTH 
SECURITY, MEDICAID, AND SCHIP FUNDS.—The Sec-
retary shall establish procedures for blending the pay-
ments that a State is entitled to receive under this title, 
title XIX, and title XXI into 1 payment rate if— 
‘‘(1) the State requests such a blended pay-
ment; and 
‘‘(2) the Secretary finds that the State meets 
maintenance of effort requirements established by 
the Secretary. 
‘‘(c) LIMITATIONS ON FEDERAL PAYMENTS BASED 
ON COST CONTAINMENT.— 
‘‘(1) DETERMINATION
OF
BASELINE.—Each 
year (beginning with 2005), the Secretary shall es-
tablish a baseline projection for the national rate of 
growth in private health insurance premiums for 
such year. 
‘‘(2) REQUIREMENT.—Beginning with fiscal 
year 2006 and each fiscal year thereafter, any pay-
ment made to a State under section 2204 shall not 
exceed the amount paid to the State under such sec-
tion for the preceding fiscal year, adjusted for 
changes in enrollment and a premium inflation ad-
justment that is 0.5 percent below the baseline pro-
jection determined under paragraph (1) for the year,
unless the State adopts (and the Secretary approves) 
cost containment strategy that will reduce the rate 
of growth of spending. 
‘‘(d) OTHER LIMITATIONS ON USE OF FUNDS.— 
‘‘(1) IN GENERAL.—A State participating under 
part A, and, effective January 1, 2009, all States 
under part B, shall ensure that any payments re-
ceived by the State under section 2205 or 2116(a) 
are not used by any individual or entity, including 
providers or health plans that contract to provide 
services herein, to finance directly or indirectly, or to 
otherwise facilitate expenditures to influence health 
care workers of such individual or entity with re-
spect to issues related to unionization. 
‘‘(2) CONSTRUCTION.—Nothing in this sub-
section shall be construed to limit expenditures made 
for the purpose of good faith collective bargaining or 
pursuant to the terms of a bona fide collective bar-
gaining agreement. 
‘‘(e) WAIVER
OF
FEDERAL
REQUIREMENTS.—A 
State may request (and the Secretary may grant) a waiver 
of any provision of Federal law that the State determines 
is necessary in order to carry out an approved expansion 
phase (phase I) plan under this part.
‘‘(f) REPORT.—Not later than January 1, 2006, and 
each January 1 thereafter, the Secretary, in consultation 
with the General Accounting Office and the Congressional 
Budget Office, shall prepare and submit to the appro-
priate committees of Congress a report on the number of 
States receiving payments under this part for the year for 
which the report is being prepared as well as the level of 
insurance coverage attained by each such State. 
‘‘SEC. 2206. DEFINITIONS. 
‘‘In this title: 
‘‘(1) COST-SHARING.—The term ‘cost-sharing’ 
has the meaning given such term under the Federal 
Employees Health Benefits Program standard Blue 
Cross/Blue Shield preferred provider option service 
benefit plan described in and offered under section 
8903(1) of part 5, United States Code, and includes 
deductibles, copayments, coinsurance, as such terms 
are defined for purposes of such plan. 
‘‘(2) ELIGIBLE RESIDENTS OF A STATE.— 
‘‘(A) IN
GENERAL.—The term ‘eligible 
residents of a State’ means an individual or 
family who— 
‘‘(i) is (or consists of) a resident of 
the State involved;
‘‘(ii) except as provided in subpara-
graph (B), has a family income that does 
not exceed 300 percent of the poverty line; 
‘‘(iii) is (or consists of) a citizen of 
the United States, a legal resident alien, or 
an individual otherwise residing in the 
United States under the authority of Fed-
eral law; and 
‘‘(iv) in the case of an individual, is 
not eligible for benefits under the medicare 
program under title XVIII or for medical 
assistance under the medicaid program 
under title XIX (other than under the ap-
plication 
of 
section 
1902(a)(10)(A)(ii)(XIV)). 
‘‘(B) OPTION TO PROVIDE COVERAGE FOR 
INDIVIDUALS AND FAMILIES WITH HIGHER IN-
COME.—If approved by the Secretary, a State 
may increase the percentage described in sub-
paragraph (A)(ii), or eliminate all income eligi-
bility criteria in order to provide coverage under 
this part to more individuals and families. 
‘‘(3) EXPANSION PHASE (PHASE I) PLAN.—The 
term ‘expansion phase (phase I) plan’ means the
State universal health insurance coverage plan sub-
mitted under section 2201(b). 
‘‘(4) HEALTH
CARE
SERVICES.—The term 
‘health care services’ includes medical, surgical, 
mental health, and substance abuse services, wheth-
er provided on an inpatient or outpatient basis. 
‘‘(5) 
HEALTH
CARE
WORKER.—The 
term 
‘health care worker’ means an individual employed 
by an employer that provides— 
‘‘(A) health care services; or 
‘‘(B) necessary related services, including 
administrative, food service, janitorial, or main-
tenance service to an entity that provides such 
health care services. 
‘‘(6) HEALTH PLAN.—The term ‘health plan’ 
includes health insurance coverage, as defined in sec-
tion 2791(b)(1) of the Public Health Service Act (42 
U.S.C. 300gg–91(b)(1)) and group health plans, as 
defined in section 2791(a) of such Act (42 U.S.C. 
300gg91(b)(1)). 
‘‘(7) MENTAL HEALTH AND SUBSTANCE ABUSE 
TREATMENT BENEFITS PARITY.— 
‘‘(A) IN
GENERAL.—The term ‘mental 
health and substance abuse treatment benefits 
parity’ means, with respect to health coverage,
that the coverage does not impose treatment 
limitations or financial requirements on the cov-
erage of mental health benefits if similar re-
quirements are not imposed on coverage of 
medical and surgical benefits in comparable set-
tings (including inpatient and outpatient set-
tings). 
‘‘(B) 
TREATMENT
LIMITATIONS.—The 
term ‘treatment limitations’ means limits on the 
frequency of treatment, number of visits, or 
other limits on the scope and duration of treat-
ment, as covered by a group health plan (or 
health insurance coverage offered in connection 
with such a plan). Such term does not include 
limits on benefits or coverage based solely on 
medical necessity. 
‘‘(C) 
FINANCIAL
REQUIREMENTS.—The 
term ‘financial requirements’ means copay-
ments, deductibles, out-of-network charges, out- 
of-pocket contributions or fees, annual limits, 
and lifetime aggregate limits imposed on cov-
ered individuals. 
‘‘(8) POVERTY LINE.—The term ‘poverty line’ 
has the meaning given such term in section 673(2) 
of the Community Services Block Grant Act (42
U.S.C. 9902(2)), including any revision required by 
such section. 
‘‘(9) PREMIUM.—The term ‘premium’ includes 
any enrollment fees and other similar charges. 
‘‘(10) QUALIFIED PLAN.—The term ‘qualified 
plan’ means a health plan that satisfies the coverage 
requirements described under section 2203 and par-
ticipates in an expansion phase (phase I) plan.’’. 
TITLE 
II—HEALTH 
SECURITY 
FOR 
ALL 
AMERICANS—UNI-
VERSAL PHASE (PHASE II) 
SEC. 201. UNIVERSAL PHASE (PHASE II) STATE UNIVERSAL 
HEALTH INSURANCE COVERAGE PLANS. 
Title XXII of the Social Security Act, as added by 
section 101, is amended by adding at the end the fol-
lowing: 
‘‘PART B—UNIVERSAL PHASE (PHASE II) PLANS 
‘‘SEC. 2211. PURPOSE; MANDATORY STATE PLANS. 
‘‘(a) PURPOSE.—The purposes of this part are to— 
‘‘(1) require States to establish and implement 
State-administered systems to ensure universal 
health insurance coverage; and 
‘‘(2) provide funds to States for the establish-
ment and implementation of such systems.