SEC. 102. AUTHORITY FOR STATES TO OFFER PURCHASE 
OF COVERAGE FOR UNCOVERED CHILDREN 
UNDER SCHIP. 
(a) IN GENERAL.—Title XXI (42 U.S.C. 1397aa et 
seq.) is amended by adding at the end the following new 
section: 
‘‘SEC. 2111. AUTHORITY FOR STATES TO OFFER PURCHASE 
OF COVERAGE FOR UNCOVERED CHILDREN 
WHO ARE NOT OTHERWISE ELIGIBLE FOR AS-
SISTANCE UNDER SCHIP OR MEDICAID. 
‘‘(a) AUTHORITY TO OFFER PURCHASE OF COV-
ERAGE.— 
‘‘(1) OPTION FOR STATES WITH INCOME ELIGI-
BILITY LEVEL OF AT LEAST 200, BUT NOT 400, PER-
CENT.—Subject to the succeeding provisions of this 
section, in the case of a State that meets the re-
quirement of section 2105(i)(2) for a calendar quar-
ter and that has elected to apply an income eligi-
bility level under section 2110(c)(4) that is at least 
200 percent, but not 400 percent, of the poverty line 
for the calendar quarter, the State may permit dur-
ing the calendar quarter the purchase of coverage 
under this title by families, employers, or others 
(under the same terms of the plan that apply to tar-
geted low-income children) for an uncovered child 
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who would be eligible to be a targeted low-income 
child but whose family income exceeds such level. 
‘‘(2) REQUIREMENT FOR STATES WITH 400 PER-
CENT INCOME ELIGIBILITY LEVEL.—In the case of a 
State that meets the requirement of section 
2105(i)(2) for a calendar quarter and that has elect-
ed to apply an income eligibility level under section 
2110(c)(4) that is 400 percent of the poverty line 
for the calendar quarter, the State shall permit dur-
ing the quarter the purchase of coverage described 
in paragraph (1). 
‘‘(b) COMMUNITY-RATED, ACTUARIALLY
BASED 
PREMIUM.—The premium imposed for coverage of a child 
pursuant to subsection (a) shall not exceed a community- 
rated premium that reflects the actuarial average cost of 
providing coverage under the State child health plan to 
enrollees who are children. 
‘‘(c) STATE OPTION REGARDING LIMITATION
ON 
COST-SHARING.— 
‘‘(1) IN GENERAL.—In the case of children cov-
ered under the plan by reason of purchasing such 
coverage pursuant to subsection (a), the State may 
elect in applying the limitation on cost-sharing de-
scribed in section 2103(e)(3)(B) (including to chil-
dren who are provided benefits in the manner de-
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scribed in section 2103(e)(4)) not to apply such limi-
tation with respect to some or all of the premiums 
imposed for the purchase of such coverage. 
‘‘(2) RULE
OF
CONSTRUCTION.—Nothing in 
paragraph (1) shall be construed as prohibiting an 
employer from providing an employee with financial 
benefits to offset the cost of premiums and cost- 
sharing imposed with respect to the purchase of cov-
erage of a child pursuant to subsection (a). 
‘‘(d) NO FEDERAL MATCHING PAYMENT AVAIL-
ABLE.—No payments shall be made under section 2105(a) 
(other than under clauses (iii) and (iv) of paragraph 
(1)(D)) with respect to child health assistance provided 
under the State child health plan to children covered 
under the plan by reason of purchasing such coverage pur-
suant to this section.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) 
Section 
2110(b)(1)(B) 
(42 
U.S.C. 
1397jj(b)(1)(B)) is amended— 
(A) in clause (i), by striking ‘‘or’’ at the 
end; 
(B) in clause (ii), in the matter before sub-
clause (I), by inserting ‘‘who’’ before ‘‘is’’; 
(C) in clause (ii)(III), by striking ‘‘and’’ 
and inserting ‘‘or’’; and 
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(D) by adding at the end the following new 
clause: 
‘‘(iii) who is a child with respect to whom 
coverage is purchased under section 2111(a); 
and’’. 
(2) Section 2103(e) (42 U.S.C. 1397cc) is 
amended— 
(A) in paragraph (3)(B), by striking ‘‘and 
(2)’’ and inserting ‘‘, (2), and section 2111(d)’’; 
and 
(B) in paragraph (4), by striking ‘‘Noth-
ing’’ and inserting ‘‘Subject to 2111(d)(2), 
nothing’’. 
SEC. 103. SUPPORT FOR EMPLOYMENT-BASED COVERAGE 
OF CHILDREN ELIGIBLE FOR SCHIP OR MED-
ICAID. 
(a) SUBSIDIES
FOR
EMPLOYMENT-BASED
COV-
ERAGE.— 
(1) UNDER SCHIP.—Section 2105 (42 U.S.C. 
1397ee) is amended— 
(A) in subsection (a)(1)(D)— 
(i) by striking ‘‘and’’ at the end of 
clause (iii); 
(ii) by redesignating clause (iv) as 
clause (v); and 
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(iii) by inserting after clause (iii) the 
following new clause: 
‘‘(iv) payments for employment-based 
coverage under subsection (c)(2)(C); and’’; 
(B) in subsection (c)(2)(A), by inserting 
‘‘(other than under clause (iv) of such para-
graph)’’ after ‘‘of such subsection’’; and 
(C) in subsection (c)(2), by adding at the 
end the following new subparagraph: 
‘‘(C) SUBSIDIES FOR EMPLOYMENT-BASED 
COVERAGE.— 
‘‘(i) IN GENERAL.—In the case of a 
State that has elected the option under 
section 2110(c)(4) to apply for a calendar 
quarter a percentage that is 400 percent 
and that meets the requirement of sub-
section (i)(2) for the calendar quarter, sub-
ject to clause (ii), the limitation under sub-
paragraph (A) on expenditures shall not 
apply to a payment for the provision of 
health benefits coverage during the cal-
endar quarter under a group health plan 
for an employer premium assistance eligi-
ble child (and to supplemental benefits de-
scribed in subclause (II)) if the State dem-
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onstrates to the satisfaction of the Sec-
retary that— 
‘‘(I) the actuarial value of the 
health benefits coverage (as deter-
mined pursuant to section 2103(c)(4)) 
is at least equal to the actuarial value 
of the child health assistance provided 
under the State child health plan for 
children with the same (or com-
parable) family income and the group 
health plan does not discriminate in 
its coverage of employer premium as-
sistance eligible children on the basis 
of health status; and 
‘‘(II) the State will provide sup-
plemental benefits for employer pre-
mium 
assistance 
eligible 
children 
under the State child health plan in 
accordance with section 2110(b)(5) in 
order that such supplemental benefits, 
in combination with such coverage, 
provides the same benefits as would 
be available under the child health 
plan 
to 
the 
child 
if 
section 
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2110(b)(1)(C) did not apply to the 
child. 
‘‘(ii) 
LIMITATION
ON
FEDERAL 
MATCHING PAYMENTS.—No payment shall 
be made under subsection (a) with respect 
to a payment described in clause (i) for 
coverage of a child insofar as the payment 
exceeds 50 percent of the amount of ex-
penditures that the State would have oth-
erwise incurred for providing child health 
assistance for such child if the child were 
a targeted low-income child. 
‘‘(iii) EMPLOYER
PREMIUM
ASSIST-
ANCE
ELIGIBLE
CHILD
DEFINED.—For 
purposes of clause (i), the term ‘employer 
premium assistance eligible child’ means a 
child who is covered under a group health 
plan, who is not eligible for medical assist-
ance under the State plan under title XIX, 
and who would satisfy the requirements for 
being a targeted low-income child under 
the State child health plan if the condition 
described in subparagraph (C) of section 
2110(b)(1) did not apply.’’. 
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(2) REFERENCE
TO
EXISTING
MEDICAID
AU-
THORITY.—For provisions relating to authority of 
State Medicaid plan to provide payment to employ-
ers for enrollment of Medicaid-eligible children in a 
group health plan, and requiring the continued pro-
vision of medical assistance to supplement coverage 
under such plan, see section 1906 of the Social Se-
curity Act (42 U.S.C. 1396e). 
(b) STATE PROVISION OF SUPPLEMENTAL SCHIP 
BENEFITS
IN CASE
OF CHILDREN COVERED UNDER 
GROUP HEALTH PLANS.— 
(1) IN GENERAL.—Section 2110(b) (42 U.S.C. 
1397jj(b)) is amended— 
(A) in paragraph (1)(C), by inserting ‘‘, 
subject to paragraph (5),’’ after ‘‘under title 
XIX or’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(5) STATE
PROVISION
OF
SUPPLEMENTAL 
BENEFITS IN CASE OF CHILDREN COVERED UNDER 
GROUP HEALTH PLANS.— 
‘‘(A) REQUIREMENT
FOR
CHILDREN
EN-
ROLLED
UNDER
SUBSIDIZED
EMPLOYMENT- 
BASED COVERAGE.—In the case of a State that 
provides payment under section 2105(c)(2)(C) 
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for health benefits coverage for a child enrolled 
in a group health plan, the requirement of 
paragraph (1)(C) shall not apply to such child, 
but the child health assistance under this title 
shall be limited to— 
‘‘(i) benefits for items or services that 
are not covered, or are only partially cov-
ered, under such plan; and 
‘‘(ii) protection against incurring out- 
of-pocket costs (including premiums) in ex-
cess of the limitations otherwise applicable 
to a targeted low-income child with the 
same family income. 
‘‘(B) OPTION
FOR
OTHER
CHILDREN.— 
For children not described in subparagraph (A), 
a State may waive the requirement of para-
graph (1)(C), with respect to children within 
one or more classes or categories of children 
specified by the State, in the case of a child 
covered under a group health plan in order to 
provide child health assistance— 
‘‘(i) for items or services that are not 
covered, or are only partially covered, 
under such plan; or 
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‘‘(ii) to protect against incurred out- 
of-pocket costs (including premiums) ex-
ceeding the limitations otherwise applicable 
to a targeted low-income child with the 
same family income. 
‘‘(C) ELIGIBILITY.—In applying subpara-
graph (B), a State may limit the application of 
the waiver under such subparagraph to children 
whose family income does not exceed a level 
specified by the State, which may not exceed 
the maximum income level otherwise established 
for other children under the State child health 
plan. 
‘‘(D) CONTINUED APPLICATION OF DUTY 
TO PREVENT SUBSTITUTION OF EXISTING COV-
ERAGE.—Nothing in this paragraph shall be 
construed as modifying the application of sec-
tion 2102(b)(3)(C) to a State.’’. 
(2) APPLICATION OF ENHANCED MATCH UNDER 
MEDICAID.—Section 1905 (42 U.S.C. 1396d) is 
amended— 
(A) in subsection (b), in the fourth sen-
tence, by striking ‘‘subsection (u)(3)’’ and in-
serting ‘‘(u)(3), or (u)(4)’’; and 
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(B) in subsection (u), by redesignating 
paragraph (4) as paragraph (5) and by insert-
ing after paragraph (3) the following new para-
graph: 
‘‘(4) For purposes of subsection (b), the expenditures 
described in this paragraph are expenditures for items and 
services for children described in section 2110(b)(5).’’. 
(3) APPLICATION OF SECONDARY PAYOR PROVI-
SIONS.—Section 
2107(e)(1) 
(42 
U.S.C. 
1397gg(e)(1)) is amended— 
(A) by redesignating subparagraphs (B) 
through (D) as subparagraphs (C) through (E), 
respectively; and 
(B) by inserting after subparagraph (A) 
the following new subparagraph: 
‘‘(B) Section 1902(a)(25) (relating to co-
ordination of benefits and secondary payor pro-
visions) with respect to benefits provided under 
section 2110(b)(5).’’. 
SEC. 104. MODIFICATION OF PROHIBITION ON COVERAGE 
OF CHILDREN OF STATE EMPLOYEES. 
Section 2110(b)(2)(B) (42 U.S.C. 1397jj(b)(2)) is 
amended— 
(1) by striking ‘‘is eligible’’ and inserting 
‘‘would be eligible’’; and 
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(2) by inserting ‘‘(as in effect on March 1, 
2007)’’ after ‘‘plan’’. 
Subtitle B—Ensuring Dependable 
Coverage for All Children 
SEC. 111. IMPROVING BENCHMARK COVERAGE OPTIONS. 
(a) LIMITATION ON USE OF SECRETARY-APPROVED 
COVERAGE.—Section 
2103(a)(4) 
(42 
U.S.C. 
1397cc(a)(4)) is amended by striking the period at the end 
and inserting ‘‘, but only if such determination was made 
before March 1, 2007.’’. 
(b) REQUIREMENT
FOR MOST POPULAR FAMILY 
COVERAGE FOR STATE EMPLOYEE COVERAGE BENCH-
MARK.—Section 2103(b)(2) (42 U.S.C. 1397(b)(2)) is 
amended— 
(1) by striking ‘‘A health benefits coverage 
plan’’ and inserting ‘‘The health benefits coverage 
plan’’; and 
(2) by inserting ‘‘and that has been selected the 
most, by employees seeking dependent coverage, 
among such plans that provide such dependent cov-
erage, in either of the previous 2 plan years’’ before 
the period. 
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SEC. 112. REQUIRING COVERAGE OF EPSDT SERVICES, IN-
CLUDING DENTAL SERVICES, AND FEDER-
ALLY-QUALIFIED HEALTH SERVICES AND IM-
PROVING COVERAGE OF ADDITIONAL CAT-
EGORIES OF SERVICES. 
(a) ADDITIONAL REQUIRED SERVICES.— 
(1) REQUIRED COVERAGE OF EPSDT SERVICES, 
INCLUDING
DENTAL
SERVICES.—Section 2103(c) 
(42 U.S.C. 1397cc(c)) is amended— 
(A) by redesignating paragraph (5) as 
paragraph (6); and 
(B) by inserting after paragraph (4), the 
following: 
‘‘(5) OTHER REQUIRED SERVICES.—The child 
health assistance provided to a targeted low-income 
child shall include coverage of the following: 
‘‘(A) EPSDT SERVICES, INCLUDING DEN-
TAL SERVICES.—Early and periodic screening, 
diagnostic, and treatment services described in 
subsections (a)(4)(B) and (r) of section 1905 
and provided in accordance with section 
1903(a)(43) (including dental services that are 
necessary to prevent disease and promote oral 
health, restore oral structures to health and 
function, and treat emergency conditions).’’. 
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(2) REQUIRED COVERAGE OF FQHC AND RHC 
SERVICES.—Section 
2103(c)(5) 
(42 
U.S.C. 
1397cc(c)(5)) (as added by subsection (a)), is 
amended by adding at the end the following: 
‘‘(B) FQHC AND RHC SERVICES.—Feder-
ally-qualified health center services (as defined 
in section 1905(l)(2)) and rural health clinic 
services (as defined in section 1905(l)(1)).’’. 
(3) ASSURING ACCESS TO CARE.— 
(A) STATE CHILD HEALTH PLAN REQUIRE-
MENT.—Section 
2102(a)(7)(B) 
(42 
U.S.C. 
1397bb(c)(2)) is amended by inserting ‘‘and 
services described in section 2103(c)(5)’’ after 
‘‘emergency services’’. 
(B) ANNUAL REPORT.—Section 2108(a)(1) 
(42 U.S.C. 1397hh(a)(1)) is amended— 
(i) 
by 
striking 
‘‘including 
the 
progress’’ and inserting ‘‘including— 
‘‘(A) the progress’’; and 
(ii) by adding at the end the fol-
lowing: 
‘‘(B) the extent to which the operation of 
such plan ensures access, comparable to access 
under employer-sponsored or other private 
health insurance coverage (or in the case of fed-
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erally-qualified health center services (as de-
fined in section 1905(l) (2)) and rural health 
clinic services (as defined in section 1905(l)(1)), 
access comparable to the access to such services 
under title XIX), for child health assistance to 
targeted low-income children consistent with the 
provisions of this title; and’’. 
(4) 
CONFORMING
AMENDMENT.—Section 
2103(a) (42 U.S.C. 1397cc(a)) is amended, in the 
matter preceding paragraph (1), by striking ‘‘sub-
section (c)(5)’’ and inserting ‘‘paragraphs (5) and 
(6) of subsection (c)’’. 
(b) 100 PERCENT ACTUARIAL VALUE FOR ADDI-
TIONAL SERVICES INCLUDED
IN BENCHMARK PACK-
AGE.—Section 
2103(a)(2)(C) 
(42 
U.S.C. 
1397cc(a)(2)(C)) is amended by striking ‘‘75 percent’’ and 
inserting ‘‘100 percent’’. 
SEC. 113. CLARIFICATION OF REQUIREMENT TO PROVIDE 
EPSDT SERVICES FOR ALL CHILDREN IN 
BENCHMARK 
BENEFIT 
PACKAGES 
UNDER 
MEDICAID. 
(a) IN GENERAL.—Section 1937(a)(1), as inserted by 
section 6044(a) of the Deficit Reduction Act of 2005, is 
amended— 
(1) in subparagraph (A)— 
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(A) in the matter before clause (i), by in-
serting ‘‘subject to subparagraph (E),’’ after 
‘‘Notwithstanding any other provision of this 
title’’; and 
(B) by striking ‘‘enrollment in coverage 
that provides’’ and all that follows and inserting 
‘‘benchmark coverage described in subsection 
(b)(1) or benchmark equivalent coverage de-
scribed in subsection (b)(2).’’; 
(2) by striking subparagraph (C) and inserting 
the following new subparagraph: 
‘‘(C) STATE
OPTION
TO
PROVIDE
ADDI-
TIONAL BENEFITS.—A State, at its option, may 
provide such additional benefits to benchmark 
coverage described in subsection (b)(1) or 
benchmark equivalent coverage described in 
subsection (b)(2) as the State may specify.’’; 
and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(E) REQUIRING
COVERAGE
OF
EPSDT 
SERVICES.—Nothing in this paragraph shall be 
construed as affecting a child’s entitlement to 
care and services described in subsections 
(a)(4)(B) and (r) of section 1905 and provided 
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in accordance with section 1903(a)(43) whether 
provided through benchmark coverage, bench-
mark equivalent coverage, or otherwise.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this subsection shall take effect as if included in the 
amendment made by section 6044(a) of the Deficit Reduc-
tion Act of 2005. 
SEC. 114. MEDICAID-SCHIP PAYMENT ADVISORY COMMIS-
SION. 
Title XIX (42 U.S.C. 1396 et seq.) is amended by 
inserting before section 1901 the following new section: 
‘‘MEDICAID-SCHIP PAYMENT ADVISORY COMMISSION 
‘‘SEC. 1900. (a) ESTABLISHMENT.—There is hereby 
established the Medicaid-SCHIP Payment Advisory Com-
mission (in this section referred to as the ‘Commission’). 
‘‘(b) DUTIES.— 
‘‘(1) REVIEW OF PAYMENT POLICIES AND AN-
NUAL REPORTS.—The Commission shall— 
‘‘(A) review payment policies of the Med-
icaid program established under this title (in 
this section referred to as ‘Medicaid’) and the 
State Children’s Health Insurance Program es-
tablished under title XXI (in this section re-
ferred to as ‘SCHIP’), including topics de-
scribed in paragraph (2); 
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‘‘(B) make recommendations to Congress 
concerning such payment policies; 
‘‘(C) by not later than March 1 of each 
year, submit a report to Congress containing 
the results of such reviews and its recommenda-
tions concerning such policies; and 
‘‘(D) by not later than June 1 of each 
year, submit a report to Congress containing an 
examination of issues affecting Medicaid and 
SCHIP, including the implications of changes 
in health care delivery in the United States and 
in the market for health care services on such 
programs. 
‘‘(2) SPECIFIC TOPICS TO BE REVIEWED.—Spe-
cifically, the Commission shall review the following: 
‘‘(A) The factors affecting expenditures for 
services in different sectors (such as physician, 
hospital and other sectors), payment methodolo-
gies, and their relationship to access and qual-
ity of care for Medicaid and SCHIP bene-
ficiaries. 
‘‘(B) The affects of Medicaid and SCHIP 
payment policies on access to services for chil-
dren and other Medicaid and SCHIP popu-
lations. 
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‘‘(3) COMMENTS ON CERTAIN SECRETARIAL RE-
PORTS.—If the Secretary submits to Congress (or a 
committee of Congress) a report that is required by 
law and that relates to payment policies under Med-
icaid or SCHIP, the Secretary shall transmit a copy 
of the report to the Commission. The Commission 
shall review the report and, not later than 6 months 
after the date of submittal of the Secretary’s report 
to Congress, shall submit to the appropriate commit-
tees of Congress written comments on such report. 
Such comments may include such recommendations 
as the Commission deems appropriate. 
‘‘(4) AGENDA AND ADDITIONAL REVIEWS.—The 
Commission shall consult periodically with the 
Chairmen and Ranking Minority Members of the ap-
propriate committees of Congress regarding the 
Commission’s agenda and progress towards achiev-
ing the agenda. The Commission may conduct addi-
tional reviews, and submit additional reports to the 
appropriate committees of Congress, from time to 
time on such topics relating to the program under 
this title or title XXI as may be requested by such 
Chairmen and Members and as the Commission 
deems appropriate. 
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‘‘(5) AVAILABILITY
OF
REPORTS.—The Com-
mission shall transmit to the Secretary a copy of 
each report submitted under this subsection and 
shall make such reports available to the public. 
‘‘(6) 
APPROPRIATE
COMMITTEE
OF
CON-
GRESS.—For purposes of this section, the term ‘ap-
propriate committees of Congress’ means the Com-
mittees on Energy and Commerce of the House of 
Representatives and the Committee on Finance of 
the Senate. 
‘‘(7) 
VOTING
AND
REPORTING
REQUIRE-
MENTS.—With respect to each recommendation con-
tained in a report submitted under paragraph (1), 
each member of the Commission shall vote on the 
recommendation, and the Commission shall include, 
by member, the results of that vote in the report 
containing the recommendation. 
‘‘(8) 
EXAMINATION
OF
BUDGET
CON-
SEQUENCES.—Before making any recommendations, 
the Commission shall examine the budget con-
sequences of such recommendations, directly or 
through consultation with appropriate expert enti-
ties. 
‘‘(c) APPLICATION OF PROVISIONS.—The following 
provisions of section 1805 shall apply to the Commission 
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in the same manner as they apply to the Medicare Pay-
ment Advisory Commission: 
‘‘(1) Subsection (c) (relating to membership). 
‘‘(2) Subsection (d) (relating to staff and con-
sultants). 
‘‘(3) Subsection (e) (relating to powers). 
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.— 
‘‘(1) REQUEST
FOR
APPROPRIATIONS.—The 
Commission shall submit requests for appropriations 
in the same manner as the Comptroller General sub-
mits requests for appropriations, but amounts ap-
propriated for the Commission shall be separate 
from amounts appropriated for the Comptroller Gen-
eral. 
‘‘(2) AUTHORIZATION.—There are authorized to 
be appropriated such sums as may be necessary to 
carry out the provisions of this section.’’. 
Subtitle C—Ensuring a Fair 
Partnership 
SEC. 121. INCREASE IN FMAP FOR MEDICAL ASSISTANCE 
FOR CHILDREN FOR STATES THAT EXPAND 
COVERAGE OF CHILDREN. 
Section 1905 (42 U.S.C. 1396d) is amended— 
(1) in subsection (b), in the first sentence— 
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(A) by striking ‘‘and (4)’’ and inserting 
‘‘(4)’’; and 
(B) by inserting ‘‘, and (5) in the case of 
a State that is described in subsection (y)(1) 
and section 2105(i)(1) for a calendar quarter, 
notwithstanding the previous clauses of this 
sentence, the Federal medical assistance per-
centage with respect to medical assistance pro-
vided to children shall be increased by the num-
ber of percentage points determined under sub-
section (y)(4)’’ before the period; and 
(2) by adding at the end the following new sub-
section: 
‘‘(y) DETERMINATION OF INCREASE IN FMAP FOR 
MEDICAL ASSISTANCE FOR CHILDREN FOR STATES THAT 
EXPAND COVERAGE OF CHILDREN.— 
‘‘(1) STATE
DESCRIBED.—For purposes of 
clause (5) of the first sentence of subsection (b), a 
State described in this paragraph is a State that— 
‘‘(A) meets the continuous eligibility re-
quirement of paragraph (2); and 
‘‘(B) has implemented model outreach and 
enrollment practices in accordance with at least 
3 subparagraphs of paragraph (3) (relating to 
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coverage of children under this title and title 
XXI). 
‘‘(2) 
CONTINUOUS
ELIGIBILITY
REQUIRE-
MENT.—The requirement of this paragraph is that 
the State has elected the option of continuous eligi-
bility for a full 12 months for children described in 
section 1902(e)(12) under this title, as well as ap-
plying such policy under its State child health plan 
under title XXI. 
‘‘(3) MODEL
OUTREACH
AND
ENROLLMENT 
PRACTICES.— 
‘‘(A) APPLICATION OUTREACH PROCESS.— 
The State makes available to parents and care-
taker relatives of children, in English and other 
languages that shall be required by the Sec-
retary to comply with title VI of the Civil 
Rights Act of 1964, information regarding ap-
plying, and upon request, an application, for 
medical assistance for children under this title 
and for child health assistance under title XXI 
consistent with the following: 
‘‘(i) POSTING OF AVAILABILITY OF IN-
FORMATION.—An 
announcement 
con-
cerning the availability of such information 
and applications is posted in a conspicuous 
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manner at a location that is easily acces-
sible to the public— 
‘‘(I) in each hospital in the State 
that is a participating provider under 
the State child health plan under title 
XXI or under the State plan under 
this title; 
‘‘(II) in each public elementary 
and secondary school in the State; 
and 
‘‘(III) in the facility of each pub-
lic health care provider in the State, 
including 
federally-qualified 
health 
centers and rural health centers, par-
ticipating under such State child 
health plan or under this title. 
‘‘(ii) YEAR-ROUND
AVAILABILITY
OF 
APPLICATIONS.—Such 
applications 
are 
made available in such locations on an on- 
going basis. 
‘‘(iii) ANNUAL
ENROLLMENT
CAM-
PAIGN IN SCHOOLS.—An outreach and en-
rollment campaign is conducted at least 
annually in such public elementary and 
secondary schools, during which informa-
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tion concerning enrollment of children is 
sent to the homes of children. 
‘‘(iv) OUTSTATIONING
OR
TRAINING 
OF STAFF FOR INITIAL PROCESSING.—Pro-
viding for the receipt and initial processing 
of any such application at each facility 
specified in section 1902(a)(55) and at 
each school described in clause (i)(II) in 
which not less than 30 percent of the stu-
dents are eligible for free or reduced lunch 
under the Richard D. Russell National 
School Lunch Act, through— 
‘‘(I) the stationing at such facil-
ity or school of State or local agency 
personnel to determine eligibility for 
such assistance; or 
‘‘(II) upon request of the facility 
or school, the training and certifi-
cation of personnel of such facility or 
school (and access to necessary auto-
mated data systems) to make such 
initial eligibility determinations. 
‘‘(B) ONE-STEP APPLICATION PROCESS.— 
‘‘(i) IN
GENERAL.—The State pro-
vides for either or both of the following: 
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‘‘(I) The one-step enrollment 
process described in clause (ii). 
‘‘(II) The express lane process 
described in clause (iii). 
‘‘(ii) ONE-STEP
APPLICATION
PROC-
ESS (SINGLE APPLICATION FOR MULTIPLE 
PUBLIC
ASSISTANCE
PROGRAMS).—The 
State treats an application for assistance 
for or on behalf of a child (who has not 
otherwise been determined eligible for as-
sistance under this title or title XXI) 
under any public assistance program ad-
ministered by another Federal or State 
agency, including the agencies admin-
istering the Food Stamp Act of 1977, the 
Richard B. Russell National School Lunch 
Act, and the Child Nutrition Act of 1966, 
notwithstanding any differences in budget 
unit, disregard, deeming, or other method-
ology, as an application for medical assist-
ance under this title for the child, or for 
child health assistance under title XXI, but 
only if— 
‘‘(I) such agency has fiscal liabil-
ities under such program that are af-
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fected or potentially affected by such 
determinations; and 
‘‘(II) any information furnished 
by such agency pursuant to this 
clause is kept confidential (except 
from the applicant and the applicant’s 
parent or caretaker relative) and is 
used solely for purposes of deter-
mining eligibility for medical assist-
ance under this title or for child 
health assistance under title XXI. 
‘‘(iii) EXPRESS
LANE
PROCESS
(AC-
CEPTANCE
OF
INCOME-RELATED
DETER-
MINATIONS FOR OTHER ASSISTANCE PRO-
GRAMS).—The State is implementing the 
option provided under section 1902(e)(13) 
under title XIX, as well as under this title 
pursuant to section 2107(e)(1)(C). 
‘‘(C) ADMINISTRATIVE
VERIFICATION
OF 
INCOME.—The State permits a parent or care-
taker relative of a child applying for medical as-
sistance under this title or child health assist-
ance under title XXI to declare and certify by 
signature under penalty of perjury information 
relating to family income, assets, expenses, and 
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other financial information for purposes of de-
termining and redetermining financial eligibility 
and not to routinely require an in-person inter-
view, except in cases justified by individual cir-
cumstances. Nothing in this subparagraph shall 
be construed as preventing a State from taking 
steps to verify information provided or to seek 
further information and documentation from 
applicants in individual cases in the case of dis-
crepancies or where otherwise justified. 
‘‘(D) SIMPLIFIED, CONSISTENT
APPLICA-
TION FORM AND PROCESS.—The State uses an 
application form and process consistent with 
the following: 
‘‘(i) The application forms and mate-
rials are in such languages in addition to 
English as shall be required by the Sec-
retary to comply with title VI of the Civil 
Rights Act of 1964. 
‘‘(ii) The application form and supple-
mental forms (if any) and information 
verification process is the same for pur-
poses of establishing and renewing eligi-
bility for children for medical assistance 
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under this title and child health assistance 
under title XXI. 
‘‘(iii) The process does not require an 
application to be made in person or a face- 
to-face interview, unless there are discrep-
ancies or individual circumstances justi-
fying an in-person application or face-to- 
face interview. 
‘‘(E) 
USE
OF
ADMINISTRATIVE
RE-
NEWAL.— 
‘‘(i) IN
GENERAL.—The State pro-
vides, in the case of renewal of a child’s 
eligibility for medical assistance under this 
title or child health assistance under title 
XXI, that notice is provided to the parent 
or caretaker relative of the child that eligi-
bility of the child will be renewed and con-
tinued based on the information available 
to the State unless the State is provided 
other information. 
‘‘(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 this title or title 
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XXI is determined on an ex parte basis, 
without any requirement 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 agencies) without the partici-
pation of the applicant or the applicant’s 
parent or caretaker relative. 
‘‘(F) APPLICATION OF PRESUMPTIVE ELI-
GIBILITY.—The State has implemented the op-
tion, for purposes of both this title and title 
XXI, of applying presumptive eligibility provi-
sions 
under 
sections 
1920, 
1920A, 
and 
2107(e)(1)(G). 
‘‘(4) DETERMINATION OF INCREASE.— 
‘‘(A) IN
GENERAL.—For purposes of 
clause (5) of the first sentence of subsection 
(b), in the case of a State described in such 
clause, the number of percentage points deter-
mined under this paragraph is equal to the 
product of the phase-in percentage for the State 
(specified under subparagraph (B)) multiplied 
by the number of percentage points by which 
the Federal medical assistance percentage de-
termined for the State under subsection (b) 
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(without regard to clause (5) of such sub-
section) is less than the enhanced FMAP de-
scribed in section 2105(b). 
‘‘(B) PHASE-IN
PERCENTAGE.—For pur-
poses of subparagraph (A), the phase-in per-
centage specified in this subparagraph for a 
State for a fiscal year is equal to— 
‘‘(i) the number of percentage points 
by which— 
‘‘(I) the income level established 
by the State under the most recent 
plan amendment of such State re-
ferred to in section 1905(b)(5), ex-
pressed in terms of a number of per-
centage points of the official poverty 
line; exceeds 
‘‘(II) the applicable income level 
established by the State as of January 
1, 2007, expressed in terms of a num-
ber of percentage points of the official 
poverty line, in order to be a targeted 
low-income child under the State plan 
under title XXI; divided by 
‘‘(ii) the number of percentage points 
by which 400 exceeds the applicable in-
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come level (expressed in percentage points) 
described in clause (i)(II). 
‘‘(5) INCREASE IN CAP ON PAYMENTS TO TER-
RITORIES.—If Puerto Rico, the Virgin Islands, 
Guam, the Northern Mariana Islands, or American 
Samoa qualify for an increase under subsection 
(b)(5) for a calendar quarter for a fiscal year, the 
additional Federal financial participation under this 
title that results from enrollment of additional chil-
dren under this title for such fiscal year because of 
the exercise of such option shall not be counted to-
wards the limitation on expenditures under this title 
for such commonwealth or territory otherwise deter-
mined under subsections (f) and (g) of section 1108. 
‘‘(6) SCOPE OF APPLICATION.—The increase in 
the Federal medical assistance percentage under 
subsection (b)(5) shall only apply for purposes of 
payments under section 1903 with respect to med-
ical assistance provided to children and shall not 
apply with respect to— 
‘‘(A) disproportionate share hospital pay-
ments described in section 1923; 
‘‘(B) payments under title IV or XXI; or 
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‘‘(C) any payments under this title that 
are based on the enhanced FMAP described in 
section 2105(b). 
‘‘(7) RULE
OF
CONSTRUCTION.—Nothing in 
this subsection shall be construed as preventing a 
State from implementing any of the model outreach 
and enrollment practices described in paragraph (3), 
notwithstanding that the State may not qualify for 
an increase in the Federal medical assistance per-
centage under subsection (b)(5).’’. 
Subtitle D—State Options for 
Additional Coverage Expansions 
SEC. 131. OPTIONAL COVERAGE OF OLDER CHILDREN 
UNDER MEDICAID AND SCHIP. 
(a) MEDICAID.— 
(1) IN
GENERAL.—Section 1902(l)(1)(D) (42 
U.S.C. 1396a(l)(1)(D)) is amended by inserting 
‘‘(or, at the election of a State, 20, 21, 22, 23, 24, 
or 25 years of age)’’ after ‘‘19 years of age’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 1902(e)(3)(A) (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’’. 
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(B) 
Section 
1902(e)(12) 
(42 
U.S.C. 
1396a(e)(12)) is amended by inserting ‘‘or such 
higher age as the State has elected under sub-
section (l)(1)(D)’’ after ‘‘19 years of age’’. 
(C) 
Section 
1920A(b)(1) 
(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) 
(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) (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) (42 U.S.C. 
1397jj(c)(1)) is amended by inserting ‘‘(or such higher age 
as the State has elected under section 1902(l)(1)(D))’’. 
SEC. 132. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS 
UNDER THE MEDICAID PROGRAM AND SCHIP. 
(a) MEDICAID
PROGRAM.—Section 1903(v) (42 
U.S.C. 1396b(v)) is amended— 
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(1) in paragraph (1), by striking ‘‘paragraph 
(2)’’ and inserting ‘‘paragraphs (2) and (4)’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(4)(A) A State may elect (in a plan amendment 
under this title) to provide medical assistance under this 
title, notwithstanding sections 401(a), 402(b), 403, and 
421 of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996, for aliens who are lawfully re-
siding in the United States (including battered aliens de-
scribed in section 431(c) of such Act) and who are other-
wise eligible for such assistance, within either or both of 
the following eligibility categories: 
‘‘(i) PREGNANT WOMEN.—Women during preg-
nancy (and during the 60-day period beginning on 
the last day of the pregnancy). 
‘‘(ii) CHILDREN.—Individuals under 21 years of 
age, including optional targeted low-income children 
described in section 1905(u)(2)(B). 
‘‘(B) In the case of a State that has elected to provide 
medical assistance to a category of aliens under subpara-
graph (A), no debt shall accrue under an affidavit of sup-
port against any sponsor of such an alien on the basis 
of provision of assistance to such category and the cost 
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of such assistance shall not be considered as an unreim-
bursed cost.’’. 
(b) 
SCHIP.—Section 
2107(e)(1) 
(42 
U.S.C. 
1397gg(e)(1)), as amended by section 103(b)(3), is 
amended by redesignating subparagraphs (D) and (E) as 
subparagraph (E) and (F), respectively, and by inserting 
after subparagraph (C) the following new subparagraph: 
‘‘(D) Section 1903(v)(4)(A)(ii) (relating to 
optional coverage of categories of lawfully resid-
ing immigrant children), but only if the State 
has elected to apply such section to the cat-
egory of children under title XIX.’’. 
SEC. 133. STATE OPTION TO EXPAND OR ADD COVERAGE 
OF 
CERTAIN 
PREGNANT 
WOMEN 
UNDER 
SCHIP. 
(a) SCHIP.— 
(1) COVERAGE.—Title XXI (42 U.S.C. 1397aa 
et seq.), as amended by section 102, is amended by 
adding at the end the following new section: 
‘‘SEC. 2112. OPTIONAL COVERAGE OF TARGETED LOW-IN-
COME PREGNANT WOMEN. 
‘‘(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 pregnancy-related assistance 
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for targeted low-income pregnant women in accordance 
with this section, but only if— 
‘‘(1) the State has established an income eligi-
bility level— 
‘‘(A) 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; 
and 
‘‘(B) for children under this title that is at 
least 200 percent of the poverty line; and 
‘‘(2) the State meets the requirement of section 
2105(i)(2) (relating to no waiting list for children). 
‘‘(b) DEFINITIONS.—For purposes of this title: 
‘‘(1) PREGNANCY-RELATED ASSISTANCE.—The 
term ‘pregnancy-related assistance’ has the meaning 
given the term child health assistance in section 
2110(a) as if any reference to targeted low-income 
children were a reference to targeted low-income 
pregnant women. 
‘‘(2) 
TARGETED
LOW-INCOME
PREGNANT 
WOMAN.—The term ‘targeted low-income pregnant 
woman’ means a woman— 
‘‘(A) during pregnancy and through the 
end of the month in which the 60-day period 
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(beginning on the last day of her pregnancy) 
ends; 
‘‘(B) whose family income exceeds 185 per-
cent of the poverty level applicable to a family 
of the size involved, but does not exceed the in-
come eligibility level established 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). 
‘‘(c) 
REFERENCES
TO
TERMS
AND
SPECIAL 
RULES.—In the case of, and with respect to, a State pro-
viding for coverage of pregnancy-related assistance to tar-
geted low-income pregnant women under subsection (a), 
the following 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 pregnant woman. 
‘‘(2) Any such reference to child health assist-
ance with respect to such women is deemed a ref-
erence to pregnancy-related assistance. 
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‘‘(3) Any such reference to a child is deemed a 
reference to a woman during pregnancy and the pe-
riod described in subsection (b)(2)(A). 
‘‘(4) 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 
pregnant women. 
‘‘(5) There shall be no exclusion of benefits for 
services described in subsection (b)(1) based on any 
preexisting condition and no waiting period (includ-
ing any waiting period imposed to carry out section 
2102(b)(3)(C)) shall apply. 
‘‘(6) In applying section 2103(e)(3)(B) in the 
case of a pregnant woman provided coverage under 
this section, the limitation on total annual aggregate 
cost-sharing shall be applied to such pregnant 
woman. 
‘‘(7) In applying section 2104(i)— 
‘‘(A) in the case of State which did not 
provide for coverage for pregnant women under 
this title (under a waiver or otherwise) during 
fiscal year 2007, the allotment amount other-
wise computed for the first fiscal year in which 
the State elects to provide coverage under this 
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section shall be increased by an amount (deter-
mined by the Secretary) equal to the enhanced 
FMAP of the expenditures under this title for 
such coverage, based upon projected enrollment 
and per capita costs of such enrollment; and 
‘‘(B) in the case of a State which provided 
for coverage of pregnant women under this title 
for the previous fiscal year— 
‘‘(i) in applying paragraph (1)(B)(ii) 
of such section, there shall also be taken 
into account (in an appropriate proportion) 
the percentage increase in births in the 
United States for the relevant period; and 
‘‘(ii) in applying paragraph (1)(C), 
pregnant women (and per capita expendi-
tures for such women) shall be accounted 
for separately from children, but shall be 
included in the total amount of any allot-
ment adjustment under such paragraph. 
‘‘(d) 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 
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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).’’. 
(2) 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 preg-
nancy-related services’’ after ‘‘preventive serv-
ices’’; and 
(B) by inserting before the period at the 
end the following: ‘‘or for pregnancy-related 
services’’. 
(3) 
ADDITIONAL
AMENDMENT.—Section 
2107(e)(1)(G) (42 U.S.C. 1397gg(e)(1)(G)), as re-
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designated by sections 103(b), 132(b), and 207, is 
amended to read as follows: 
‘‘(G) Sections 1920 and 1920A (relating to 
presumptive eligibility for pregnant women and 
children).’’. 
(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’ includes a qualified entity, 
as defined in section 1920A(b)(3).’’. 
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TITLE II—REMOVAL OF OTHER 
BARRIERS TO COVERAGE 
SEC. 201. ESTABLISHMENT OF NEW BASE SCHIP ALLOT-
MENTS 
THAT 
ARE 
RESPONSIVE 
TO 
IN-
CREASES IN HEALTH CARE COSTS AND EN-
ROLLMENT EXPANSIONS. 
Section 2104 (42 U.S.C. 1397dd), as amended by 
section 101(b), is amended— 
(1) in subsection (a)— 
(A) in paragraph (9), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (10), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(11) for fiscal year 2008 and each succeeding 
fiscal year, the sum of the State allotments provided 
under subsection (i) for such fiscal year.’’; 
(2) in subsection (b)(1), by striking ‘‘and (h)’’ 
and inserting ‘‘(h), and (i)’’; and 
(3) in subsection (c)(1), by striking ‘‘and (h)’’ 
and inserting ‘‘(h), and (i)’’. 
(4) by adding at the end the following new sub-
section: 
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‘‘(i) ALLOTMENTS FOR STATES AND TERRITORIES 
BEGINNING WITH FISCAL YEAR 2008.— 
‘‘(1) GENERAL ALLOTMENT COMPUTATION.— 
‘‘(A) IN
GENERAL.—Subject to the suc-
ceeding provisions of this subsection, the Sec-
retary shall compute a State allotment for each 
State for each fiscal year as follows: 
‘‘(i) REBASING IN FISCAL YEAR 2008 
AND
EACH
SECOND
SUCCEEDING
FISCAL 
YEAR.—For fiscal year 2008 and each sec-
ond succeeding fiscal year, the allotment of 
a State is equal to the Federal payments 
to the State that are attributable to (and 
countable towards) the allotment under 
this section for the State for the previous 
fiscal year multiplied by the allotment in-
crease factor under subparagraph (B) for 
the fiscal year involved. 
‘‘(ii) USING PROJECTIONS FOR FISCAL 
YEAR 2009 AND EACH SECOND SUCCEEDING 
FISCAL YEAR.—For fiscal year 2009 and 
each second succeeding fiscal year, the al-
lotment of a State is equal to the amount 
of the State allotment under this subpara-
graph for the previous fiscal year multi-
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plied by the allotment increase factor 
under subparagraph (B) for the fiscal year 
involved. 
‘‘(B) ALLOTMENT
INCREASE
FACTOR.— 
The allotment increase factor under this sub-
paragraph for a fiscal year is equal to the prod-
uct of the following: 
‘‘(i) 
PER
CAPITA
HEALTH
CARE 
GROWTH FACTOR.—One plus the percent-
age increase in the projected per capita 
amount of National Health Expenditures 
from the second previous fiscal year to the 
previous fiscal year, as most recently pub-
lished by the Secretary before the begin-
ning of the fiscal year involved. 
‘‘(ii) CHILD
POPULATION
GROWTH 
FACTOR.—One plus the percentage in-
crease in the population of children under 
20 years of age in the State from July 1 
in such second previous fiscal year to July 
1 in the previous fiscal year, as determined 
by the Secretary based on the most recent 
published estimates of the Bureau of the 
Census before the beginning of the fiscal 
year involved. 
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‘‘(C) OUTREACH ADJUSTMENT.— 
‘‘(i) IN
GENERAL.—If a State’s ex-
penditures under this title in a fiscal year 
(beginning with fiscal year 2008) exceeds 
the allotment provided under this section 
(determined without regard to any reallot-
ment it receives that is available for ex-
penditure during such fiscal year) and if 
the average number of enrollees in the 
State under this title for such fiscal year 
exceeds its target number of enrollees for 
that year, for the subsequent fiscal year 
the allotment under this section for the 
State shall be increased by the amount by 
which— 
‘‘(I) the product of— 
‘‘(aa) such additional num-
ber of enrollees; and 
‘‘(bb) the projected per cap-
ita Federal expenditures under 
the State child health plan (as 
determined under clause (iii) for 
such subsequent fiscal year); re-
duced by 
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‘‘(II) the amount of any allot-
ment redistributed to the State under 
this section for such subsequent fiscal 
year. 
‘‘(ii) TARGET
NUMBER
OF
ENROLL-
EES.—In this subsection, the target num-
ber of enrollees for a State for a fiscal year 
is equal to the average number of enrollees 
enrolled in the State child health plan 
under this title during fiscal year 2007 in-
creased (for each subsequent fiscal year 
through the fiscal year involved) by the 
population growth for children in that 
State for the year ending on June 30 be-
fore the beginning of the fiscal year (as es-
timated by the Bureau of the Census). 
‘‘(iii) PROJECTED
PER
CAPITA
FED-
ERAL
EXPENDITURES.—For purposes of 
subparagraph (A)(i)(II), the projected per 
capita Federal expenditures under a State 
child health plan for a fiscal year is equal 
to the average per capita Federal expendi-
tures under such plan for fiscal year 2007, 
increased (for each subsequent fiscal year 
up to and including the fiscal year in-
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volved) by the annual percentage increase 
in per capita amount of National Health 
Expenditures (as estimated by the Sec-
retary) for the respective subsequent fiscal 
year. 
‘‘(iv) 
AVAILABILITY.—Notwith-
standing subsection (e), an increase in al-
lotment under this paragraph shall only be 
available for expenditure during the fiscal 
year in which it is provided. 
‘‘(v) INTERACTION WITH OTHER PRO-
VISIONS.— 
‘‘(I) 
COVERAGE
EXPANSION 
STATES.—In the case of a State that 
has an increased allotment under sec-
tion 2105(i)— 
‘‘(aa) there shall be no in-
creased allotment under para-
graph (2); and 
‘‘(bb) the allotment under 
this subsection shall not be sub-
ject to reallotment or redistribu-
tion to other States. 
‘‘(II) NO REALLOTMENT OF OUT-
REACH
ADJUSTMENT.—In no case 
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shall any increase in allotment under 
paragraph (2) for a State be subject 
to reallotment or redistribution to 
other States.’’. 
SEC. 202. 2-YEAR INITIAL AVAILABILITY OF SCHIP ALLOT-
MENTS. 
Section 2104(e) (42 U.S.C. 1397dd(e)) is amended 
to read as follows: 
‘‘(e) AVAILABILITY OF AMOUNTS ALLOTTED.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), amounts allotted to a State pursuant to 
this section— 
‘‘(A) for each of fiscal years 1998 through 
2007, shall remain available for expenditure by 
the State through the end of the second suc-
ceeding fiscal year; and 
‘‘(B) for fiscal year 2008 and each fiscal 
year thereafter, shall remain available for ex-
penditure by the State through the end of the 
succeeding fiscal year. 
‘‘(2) AVAILABILITY
OF
AMOUNTS
REALLOT-
TED.—Amounts reallotted to a State under sub-
section (f) shall be available for expenditure by the 
State through the end of the fiscal year in which 
they are reallotted.’’. 
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SEC. 203. REDISTRIBUTION OF UNUSED ALLOTMENTS TO 
ADDRESS STATE FUNDING SHORTFALLS. 
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’’; 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— 
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‘‘(i) the amount of the State’s allot-
ments for any preceding fiscal years that 
remain available for expenditure and that 
will not be expended by the end of the im-
mediately preceding fiscal year; and 
‘‘(ii) the amount of the State’s allot-
ment for the fiscal year. 
‘‘(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 
reallotted under such paragraph for each short-
fall 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.’’. 
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SEC. 204. INCENTIVES FOR SCHOOL-BASED OUTREACH AND 
ENROLLMENT. 
Section 2105(a) (42 U.S.C. 1397ee(a)) is amended 
by adding at the end the following new paragraph: 
‘‘(3) SPECIAL RULE FOR SCHOOL-BASED OUT-
REACH
AND
ENROLLMENT
ACTIVITIES.—With re-
spect to expenditures in a quarter for school-based 
outreach and enrollment activities— 
‘‘(A) the ‘enhanced FMAP’ for purposes of 
paragraph (1) is equal to 90 percent; and 
‘‘(B) the limitation under subsection 
(c)(2)(A) shall not apply to such expendi-
tures.’’. 
SEC. 205. MEDICAID CITIZENSHIP DOCUMENTATION RE-
QUIREMENTS. 
(a) STATE OPTION TO REQUIRE CERTAIN INDIVID-
UALS TO PRESENT SATISFACTORY DOCUMENTARY EVI-
DENCE OF PROOF OF CITIZENSHIP OR NATIONALITY FOR 
PURPOSES OF ELIGIBILITY FOR MEDICAID.— 
(1) IN
GENERAL.—Section 1902(a)(46) (42 
U.S.C. 1396a(a)(46)) is amended— 
(A) by inserting ‘‘(A)’’ after ‘‘(46)’’; 
(B) by adding ‘‘and’’ after the semicolon; 
and 
(C) by adding at the end the following new 
subparagraph: 
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‘‘(B) at the option of the State and subject to 
section 1903(x), require that, with respect to an in-
dividual (other than an individual described in sec-
tion 1903(x)(1)) who declares to be a citizen or na-
tional of the United States for purposes of estab-
lishing initial eligibility for medical assistance under 
this title (or, at State option, for purposes of renew-
ing or redetermining such eligibility to the extent 
that such satisfactory documentary evidence of citi-
zenship or nationality has not yet been presented), 
there is presented satisfactory documentary evidence 
of citizenship or nationality of the individual (using 
criteria determined by the State, which shall be no 
more restrictive than the criteria used by the Social 
Security Administration to determine citizenship, 
and which shall accept as such evidence a document 
issued by a federally-recognized Indian tribe evidenc-
ing membership or enrollment in, or affiliation with, 
such tribe (such as a tribal enrollment card or cer-
tificate of degree of Indian blood, and, with respect 
to those federally-recognized Indian tribes located 
within States having an international border whose 
membership includes individuals who are not citizens 
of the United States, such other forms of docu-
mentation (including tribal documentation, if appro-
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priate) that the Secretary, after consulting with such 
tribes, determines to be satisfactory documentary 
evidence of citizenship or nationality for purposes of 
satisfying the requirement of this subparagraph));’’. 
(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 of Health and 
Human Services may not waive the requirements 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)— 
(i) in paragraph (20), by adding ‘‘or’’ 
after the semicolon; 
(ii) in paragraph (21), by striking ‘‘; 
or’’ and inserting a period; and 
(iii) by striking paragraph (22); and 
(B) in subsection (x) (as amended by sec-
tion 405(c)(1)(A) of division B of the Tax Re-
lief and Health Care Act of 2006 (Public Law 
109–432))— 
(i) by striking paragraphs (1) and (3); 
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(ii) by redesignating paragraph (2) as 
paragraph (1); 
(iii) in paragraph (1), as so redesig-
nated, by striking ‘‘paragraph (1)’’ and in-
serting ‘‘section 1902(a)(46)(B)’’; and 
(iv) by adding at the end the following 
new paragraph: 
‘‘(2) 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), 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.’’. 
(b) CLARIFICATION OF RULES FOR CHILDREN BORN 
IN THE UNITED STATES TO MOTHERS ELIGIBLE FOR 
MEDICAID.—Section 1903(x) (42 U.S.C. 1396b(x)), as 
amended by subsection (a)(3)(B), is amended— 
(1) in paragraph (1)— 
(A) in subparagraph (C), by striking ‘‘or’’ 
at the end; 
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(B) by redesignating subparagraph (D) as 
subparagraph (E); and 
(C) by inserting after subparagraph (C) 
the following new subparagraph: 
‘‘(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 
(2) by adding at the end the following new 
paragraph: 
‘‘(3) 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 
(v) shall be deemed eligible for medical assistance during 
the first year of such child’s life.’’. 
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