SEC. 3. FAMILY FRIENDLY COVERAGE AND ENROLLMENT.
(a) PROHIBITION OF WAITING PERIODS.—
(1) IN GENERAL.—Section 2102(b)(1)(B) (42
U.S.C. 1397bb(b)(1)(B)) is amended—
(A) by striking ‘‘and’’ at the end of clause
(i);
(B) by striking the period at the end of
clause (ii) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
clause:
‘‘(iii) shall not permit the use of any
mandatory waiting period (including any
such period in order to carry out para-
graph (3)(C)), unless the Secretary finds
that the imposition of such a period would
not be contrary to the provisions of this
title.’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) apply to assistance furnished on or
after the date of the enactment of this Act.
(b) GRACE PERIOD BEFORE DISENROLLMENT FOR
NONPAYMENT OF PREMIUMS.—
(1) IN GENERAL.—Section 2103(e) (42 U.S.C.
1397ee(e)) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(5) GOOD CAUSE WAIVER OF DISENROLLMENT
FOR NONPAYMENT OF PREMIUMS.—The State child
health plan shall establish rules allowing waiver for
good cause of termination of enrollment for non-
payment of premiums and shall establish an appeals
process that includes a hearing and a 3-month grace
period prior to termination of coverage and includes
waiver of any late payment penalties when premium
payments are made in full.’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) applies to disenrollments occurring
on or after the date that is 30 days after the date
of the enactment of this Act.
SEC. 4. EXPANDED COVERAGE OPTIONS.
(a) AUTOMATIC REASSESSMENT OF ELIGIBILITY FOR
SCHIP AND MEDICAID BENEFITS FOR CHILDREN LOS-
ING MEDICAID OR SCHIP ELIGIBILITY.—
(1) LOSS OF MEDICAID ELIGIBILITY.—Section
1902(a)(66) (42 U.S.C. 1396a(a)(66)), as inserted
by section 2(a)(2), is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (B),
(B) by striking the period at the end of
subparagraph (C) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(D) the automatic assessment, in the case
of a child who loses eligibility for medical assist-
ance under this title on the basis of changes in
income, assets, or age, of whether the child is
eligible for benefits under title XXI.’’.
(2) LOSS
OF
SCHIP
ELIGIBILITY.—Section
2102(b)(3) (42 U.S.C. 1397bb(b)(3)) is amended by
redesignating subparagraphs (D) and (E) as sub-
paragraphs (E) and (F), respectively, and by insert-
ing after subparagraph (C) the following new sub-
paragraph:
‘‘(D) that there is an automatic assess-
ment, in the case of a child who loses eligibility
for child health assistance under this title on
the basis of changes in income, assets, or age,
of whether the child is eligible for medical as-
sistance under title XIX;’’.
(3) EFFECTIVE DATE.—The amendments made
by paragraphs (1) and (2) apply to children who lose
eligibility under the medicaid program under title
XIX, or under a State child health insurance plan
under title XXI, respectively, of the Social Security
Act on or after the date that is 30 days after the
date of the enactment of this Act.
(b) OPTIONAL COVERAGE OF LOW-INCOME, UNIN-
SURED PREGNANT WOMEN UNDER
A STATE CHILD
HEALTH PLAN.—
(1) IN GENERAL.—Title XXI is amended by
adding at the end the following new section:
‘‘SEC. 2111. OPTIONAL COVERAGE OF LOW-INCOME, UNIN-
SURED PREGNANT WOMEN.
‘‘(a) OPTIONAL COVERAGE.—Notwithstanding any
other provision of this title, a State child health plan may
provide for coverage of pregnancy-related assistance for
targeted low-income pregnant women in accordance with
this section, but only if the State has established an in-
come eligibility level under section 1902(l)(2)(A) for
women described in section 1902(l)(1)(A) that is 185 per-
cent of the income official poverty line.
‘‘(b) DEFINITIONS.—For purposes of this section:
‘‘(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, except that the assistance shall be
limited to services related to pregnancy (which in-
clude prenatal, delivery, and postpartum services)
and to other conditions that may complicate preg-
nancy and shall not include prepregnancy services
and supplies.
‘‘(2) 
TARGETED
LOW-INCOME
PREGNANT
WOMAN.—The term ‘targeted low-income pregnant
woman’ has the meaning given the term targeted
low-income child in section 2110(b) as if any ref-
erence to a child were deemed a reference to a
woman during pregnancy and through the end of the
month in which the 60-day period (beginning on the
last day of her pregnancy) ends.
‘‘(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 sub-
section (b)) to a targeted low income child is deemed
to include a reference to a targeted low-income preg-
nant woman.
‘‘(2) Any such reference to child health assist-
ance with respect to such women is deemed a ref-
erence to pregnancy-related assistance.
‘‘(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).
‘‘(4) The medicaid applicable income level is
deemed a reference to the income level established
under section 1902(l)(2)(A).
‘‘(5) Subsection (a) of section 2103 (relating to
required scope of health insurance coverage) shall
not apply insofar as a State limits coverage to serv-
ices described in subsection (b)(1) and the reference
to such section in section 2105(a)(1) is deemed not
to require, in such case, compliance with the require-
ments of section 2103(a).
‘‘(6) There shall be no exclusion of benefits for
services described in subsection (b)(1) based on any
pre-existing condition and no waiting period (includ-
ing any waiting period imposed to carry out section
2102(b)(3)(C)) shall apply.
‘‘(d) NO IMPACT ON ALLOTMENTS.—Nothing in this
section shall be construed as affecting the amount of any
initial allotment provided to a State under section
2104(b).
‘‘(e) APPLICATION OF FUNDING RESTRICTIONS.—
The coverage under this section (and the funding of such
coverage) is subject to the restrictions of section 2105(c).
‘‘(f) AUTOMATIC
ENROLLMENT
FOR
CHILDREN
BORN TO WOMEN RECEIVING PREGNANCY-RELATED AS-
SISTANCE.—Notwithstanding any other provision of this
title or title XIX, if a child is born to a targeted low-in-
come pregnant woman who was receiving pregnancy-re-
lated assistance under this section on the date of the chil-
dren’s birth, the child shall be deemed to have applied for
child health assistance under the State child health plan
and to have been found eligible for such assistance under
such plan (or, in the case of a State that provides such
assistance through the provision of medical assistance
under a plan under title XIX, to have applied for medical
assistance under such title and to have been found eligible
for such assistance under such title) on the date of such
birth and to remain eligible for such assistance until the
child attains 1 year of age so long as the child is a member
of the woman’s household and the woman remains (or
would remain if pregnant) eligible for such assistance.’’.
(2) STATE OPTION TO USE ENHANCED FMAP
FOR COVERAGE OF ADDITIONAL PREGNANT WOMEN
UNDER THE MEDICAID PROGRAM.—Section 1905 (42
U.S.C. 1396d) is amended—
(A) in subsection (b), by inserting ‘‘and in
the case of a State plan that meets the condi-
tion described in subsections (u)(1) and
(u)(4)(A), with respect to expenditures de-
scribed in subsection (u)(4)(B) for the State for
a fiscal year’’ after ‘‘for a fiscal year,’’;
(B) by redesignating paragraph (4) of sub-
section (u) as paragraph (5); and
(C) by inserting after paragraph (3) of
subsection (u) the following new paragraph:
‘‘(4)(A) The condition described in this subparagraph
for a State plan is that the plan has established an income
level under section 1902(l)(2)(A) with respect to individ-
uals described in section 1902(l)(1)(A) that is 185 percent
of the income official poverty line.
‘‘(B) For purposes of subsection (b), the expenditures
described in this paragraph are expenditures for medical
assistance for women described in section 1902(l)(1)(A)
whose income exceeds the income level established for such
women under section 1902(l)(2)(A)(i) as of the date of
the enactment of this paragraph but does not exceed 185
percent of the income official poverty line.’’.
(3) 
CONFORMING
AMENDMENTS.—Section
2102(b)(1)(B) (42 U.S.C. 1397bb(b)(1)(B)) is
amended—
(A) by striking ‘‘and’’ at the end of clause
(i);
(B) by striking the period at the end of
clause (ii) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
clause:
‘‘(iii) may not apply a waiting period
(including a waiting period to carry out
paragraph (3)(C)) in the case of a targeted
low-income child who is pregnant, if the
State provides for coverage of pregnancy-
related assistance for targeted low-income
pregnant women in accordance section
2111.’’.
(4) EFFECTIVE DATE.—The amendments made
by this subsection take effect on the date of the en-
actment of this Act and apply to allotments for all
fiscal years.
(c) STATE OPTION FOR COVERAGE OF QUALIFIED
ALIEN CHILDREN UNDER MEDICAID AND CHILDREN’S
HEALTH INSURANCE PROGRAMS.—
(1) MEDICAID.—
(A) 
CATEGORICALLY
NEEDY.—Section
1902(a)(10)(a)(ii) 
(42 
U.S.C.
1396a(a)(10)(A)(ii)) is amended—
(i) by striking ‘‘or’’ at the end of sub-
clause (XIII);
(ii) by adding ‘‘or’’ at the end of sub-
clause (XIV); and
(iii) by adding at the end the fol-
lowing new subclause:
‘‘(XV) who are described in sec-
tion 1905(a)(i) and who would be eli-
gible for medical assistance (or for a
greater amount of medical assistance)
under the State plan under this title
but for the provisions of section 403
or section 421 of Public Law 104–
193, but the State may not exercise
the option of providing medical assist-
ance under this subclause with respect
to a subcategory of individuals de-
scribed in this subclause;’’.
(B) 
MEDICALLY
NEEDY.—Section
1902(a)(10)(C)(i)(I) 
(42 
U.S.C.
1396a(a)(10)(C)(i)(I)) is amended by inserting
‘‘(and such criteria may provide for eligibility of
individuals 
described 
in 
subparagraph
(A)(ii)(XV))’’ after ‘‘medical assistance’’.
(2) CHILDREN’S
HEALTH
INSURANCE
PRO-
GRAM.—Section 2110(b) (42 U.S.C. 1397jj(b)) is
amended—
(A) in paragraph (1)(A), by inserting be-
fore the semicolon ‘‘(including, at the option of
the State, a child described in paragraph
(3)(B))’’; and
(B) in paragraph (3)—
(i) by striking ‘‘SPECIAL
RULE.—’’
and inserting ‘‘SPECIAL RULES.—
‘‘(i) 
HEALTH
INSURANCE
COV-
ERAGE.—’’ by indenting the remainder of
the text accordingly; and
(ii) by adding at the end the following
new subparagraph:
‘‘(B) ELIGIBILITY FOR QUALIFIED ALIEN
CHILDREN.—For purposes of paragraph (1)(A),
a child is described in this subparagraph if—
‘‘(i) the child would be determined eli-
gible for child health assistance under this
title but for any or all of the provisions of
sections 403 and 421 of Public Law 104–
193; and
‘‘(ii) the State exercises the option to
provide medical assistance to the category
of 
individuals 
described 
in 
section
1902(a)(10)(A)(ii)(XV).’’.
(3) PROHIBITION ON SEEKING SUPPORT FROM
SPONSOR.—Section 213A(b) of the Immigration and
Nationality Act (8 U.S.C. 1183a(b)) is amended by
adding at the end the following new paragraph:
‘‘(4) EXCEPTION
FOR
CHILD
MEDICAID
OR
SCHIP
ASSISTANCE.—The preceding provisions of
this subsection shall not apply to—
‘‘(A) medical assistance furnished under
the State plan under title XIX of the Social Se-
curity Act to an individual eligible for such as-
sistance because of subclause (XV) of para-
graph (10)(A)(ii) of section 1902(a) of such Act
(42 U.S.C. 1396a(a)) or because of the ref-
erence to such subclause in paragraph (10)(C)
of such section; or
‘‘(B) child health assistance furnished
under the State child health plan under title
XXI of such Act to a child eligible for such as-
sistance because of the provisions of section
2110(b)(3)(B) 
of 
such 
Act 
(42 
U.S.C.
1397jj(b)(3)(B)).’’.
(d) ELIMINATION OF FUNDING OFFSET FOR EXER-
CISE OF PRESUMPTIVE ELIGIBILITY OPTION.—
(1) IN GENERAL.—Section 2104(d) (42 U.S.C.
1397dd(d)) is amended by striking ‘‘shall be reduced
by the sum of’’ and all that follows through ‘‘(2) the
amount of payments under such section’’ and insert-
ing ‘‘shall be reduced by the amount of payments
under section 1903(a)(1)’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) first applies for allotments for fis-
cal year 2001.
(f) PROGRAM COORDINATION WITH THE MATERNAL
AND CHILD HEALTH PROGRAM (TITLE V).—
(1) IN
GENERAL.—Section 2102(b)(3) (42
U.S.C. 1397bb(b)(3)) is amended—
(A) by striking ‘‘and’’ at the end of sub-
paragraph (D);
(B) by striking the period at the end of
subparagraph (E) and inserting ‘‘; and’’; and
(C) by adding at the end the following new
subparagraph:
‘‘(F) that operations and activities under
this title are developed and implemented in con-
sultation and coordination with the program op-
erated by the State under title V in areas in-
cluding outreach and enrollment, benefits and
services, service delivery standards, public
health and social service agency relationships,
and quality assurance and data reporting.’’.
(2) CONFORMING
MEDICAID
AMENDMENT.—
Section 1902(a)(11) (42 U.S.C. 1306a(a)(11)) is
amended—
(A) by striking ‘‘and’’ before ‘‘(C)’’; and
(B) by inserting before the semicolon at
the end the following: ‘‘, and (D) provide that
operations and activities under this title are de-
veloped and implemented in consultation and
coordination with the program operated by the
State under title V in areas including outreach
and enrollment, benefits and services, service
delivery standards, public health and social
service agency relationships, and quality assur-
ance and data reporting’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection take effect on January 1, 2001.
SEC. 5. AVAILABILITY OF FISCAL YEAR 1998 AND FISCAL
YEAR 1999 ALLOTMENTS UNDER SCHIP.
Notwithstanding subsection (e) of section 2104 of the
Social Security Act (42 U.S.C. 1397dd), amounts allotted
to a State under that section for each of fiscal years 1998
and 1999 shall remain available through September 30,
2002.
SEC. 6. PERMITTING INCREASED SHARE OF SCHIP FUNDS
TO BE EXPENDED FOR PREVENTION PRO-
GRAMS 
THAT 
ENSURE 
HEALTHY 
CHILD-
HOODS AND QUALITY PRENATAL HEALTH
CARE.
Section 2105(c)(2) (42 U.S.C. 1397ee(c)(2)) is
amended by adding at the end the following new subpara-
graph:
‘‘(C) EXCEPTION
FOR
OUTREACH
AND
PREVENTION PROGRAMS IN STATES WITH SUB-
STANTIAL ENROLLMENT AND THAT WOULD NOT
OTHERWISE USE FULL ALLOTMENT.—
‘‘(i) IN GENERAL.—In the case of a
State described in clause (ii)—
‘‘(I) the limitation under sub-
paragraph (A) on expenditures for
items described in subparagraphs (B)
or (C) of subsection (a)(2) shall not
apply, but only up to 30 percent of
the sum described in subparagraph
(A); and
‘‘(II) in applying subparagraph
(B) of subsection (a)(2), activities un-
dertaken by the State in conjunction
with the Centers for Disease Control
and Prevention to carry out activities
to promote health pregnancies and
healthy children shall be treated as
expenditures described in such sub-
paragraph, subject to the limitation
under subclause (I) of this clause.
‘‘(ii) STATE DESCRIBED.—A State de-
scribed in this clause is a State that estab-
lishes to the satisfaction of the Secretary
that—
‘‘(I) the State provides for an in-
come 
level 
under 
section
2110(b)(1)(B)(i)(I) that is not less
than 200 percent of the poverty line;
‘‘(II) the State does not provide
for any waiting list for enrollment
under this title;
‘‘(III) the State has enrolled
under this title and title XIX at least
70 percent of the children eligible for
enrollment under such titles; and
‘‘(IV) without the application of
this subparagraph, the State will not
be able to expend all the funds allot-
ted to it under this title.
The Secretary may waive the requirement
of subclause (III) where the State dem-
onstrates to the satisfaction of the Sec-
retary that the State has made all possible
efforts to achieve the enrollment level spec-
ified in the subclause.
‘‘(iii) 
PUBLIC-PRIVATE
PARTNER-
SHIPS.—In conducting activities under
clause (i), a State may build partnerships
with outside organization whose primary
goal involves the healthy development of
mothers and children and may act to oth-
erwise eradicate illnesses and environ-
mental factors that impact these groups.
‘‘(iv) ADDITIONAL
PAYMENTS.—The
provisions of this subparagraph apply in
addition to the expenditures permitted
under subparagraph (A) for items de-
scribed in subparagraphs (B) and (C) of
subsection (a)(2).’’.
SEC. 7. USE OF SCHIP FUNDS FOR ENHANCED MATCHING
RATE FOR COVERAGE OF ADDITIONAL CHIL-
DREN UNDER THE MEDICAID PROGRAM.
(a) IN GENERAL.—Section 1905 (42 U.S.C. 1396d),
as amended by section 4(b)(2), is amended—
(1) in subsection (b), by striking ‘‘or subsection
(u)(3)’’ and inserting ‘‘, subsection (u)(3), or sub-
section (u)(5)(A)’’; and
(2) in subsection (u)—
(A) by redesignating paragraph (5) as
paragraph (6); and
(B) by inserting after paragraph (4) the
following new paragraph:
‘‘(5)(A) For purposes of subsection (b), the expendi-
tures described in this subparagraph are expenditures for
medical assistance for waivered low-income children de-
scribed in subparagraph (B) but—
‘‘(i) only in the case of children residing in a
State described in subparagraph (C); and
‘‘(ii) only to the extent the number of full-year
equivalent waivered low-income children enrolled
under the State plan under this title for the fiscal
year exceeds the number of waivered low-income
children described in subparagraph (D)(i) for the
State for the fiscal year.
‘‘(B) For purposes of this paragraph, the term
‘waivered low-income child’ means a child whose family in-
come exceeds the minimum income level required to be es-
tablished for the age of such child under section
1902(l)(2) in order for the child to be eligible for medical
assistance under this title, but does not exceed the med-
icaid applicable income level (as defined in section
2110(b)(4) but determined as if ‘June 1, 1997’ were sub-
stituted for ‘March 31, 1997’) for that child.
‘‘(C) A State described in this subparagraph is a
State that—
‘‘(i) has under a waiver authorized by the Sec-
retary or under section 1902(r)(2) established and is
using a medicaid applicable income level (as defined
in section 2110(b)(4) but determined as if ‘June 1,
1997’ were substituted for ‘March 31, 1997’) for
children under 19 years of age residing in the State
that is at or above 200 percent of the poverty line;
and
‘‘(ii) demonstrates to the satisfaction of the
Secretary that the State has taken all of the fol-
lowing actions to reach and enroll children who are
eligible for, but not enrolled under, the State plan:
‘‘(I) Eliminating the assets test for eligi-
bility of waivered low-income children.
‘‘(II) Using shortened and simplified appli-
cations for such children.
‘‘(III) Allowing applications for such chil-
dren to be submitted by mail or through tele-
phone.
‘‘(IV) Outstationing State eligibility work-
ers at sites that are frequented by families with
children, including schools, child care centers,
churches, centers providing Head Start services,
local offices of the special supplemental food
program for women, infants and young children
(WIC) established under section 17 of the Child
Nutrition Act of 1966, community centers, Job
Corps centers established under part B of title
IV of the Job Training Partnership Act or sub-
title C of title I of the Workforce Investment
Act of 1998, sites offering the recognized equiv-
alent of a secondary school degree, offices of
tribal organizations (as defined in section 4(l)
of the Indian Self-Determination and Education
Assistance Act), and Social Security Adminis-
tration field offices.
‘‘(V) Using presumptive eligibility for
waivered low-income children.
‘‘(VI) Collaborating with public and private
entities to conduct outreach campaigns to enroll
such children.
‘‘(D)(i) For purposes of subparagraph (A)(ii), the
number of waivered low-income children for a State de-
scribed in this clause for—
‘‘(I) fiscal year 1998, is equal to the number of
full-year equivalent waivered low-income children en-
rolled under the State plan under this title for fiscal
year 1997; and
‘‘(II) fiscal year 1999 or a succeeding fiscal
year, is equal to the number of waivered low-income
children determined under this clause for the pre-
ceding fiscal year increased by the number of per-
centage points determined under clause (ii) for the
State for the fiscal year involved.
‘‘(ii) The number of percentage points determined
under this clause for a State for a fiscal year is equal to
the number of percentage points by which—
‘‘(I) the arithmetic average of the total number
of children in the State set forth in the 3 most re-
cent March supplements to the Current Population
Survey of the Bureau of the Census before the be-
ginning of the fiscal year; exceeds
‘‘(II) the arithmetic average of such total num-
ber set forth in the second, third, and fourth most
recent March supplements to such Survey before the
beginning of the fiscal year.
‘‘(E) Each State shall submit to the Secretary such
information, at such time and in such manner, as the Sec-
retary determines is necessary to ensure that the require-
ments of this paragraph are satisfied. The Secretary shall
ensure that information is provided under this subsection
in a manner that is consistent with other reporting re-
quirements for information required to be submitted by
a State under this title and title XXI, and avoids duplica-
tion of reporting requirements.
‘‘(F) The Secretary shall regularly examine the pay-
ments made to a State for the expenditures described in
subparagraph (A) to confirm that the payments are attrib-
utable to expenditures described in such subparagraph.’’.
(b) 
CONFORMING
AMENDMENT.—Section
1902(a)(10)(A)(ii)(XIV) 
(42 
U.S.C.
1396a(a)(10)(A)(ii)(XIV)) 
is 
amended 
by 
striking
‘‘1905(u)(2)(C)’’ and inserting ‘‘1905(u)(2)(B)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall be effective as if included in the enact-
ment of section 4911 of the Balanced Budget Act of 1997
(Public Law 105–33; 111 Stat. 570).
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