health care programs that would otherwise have 
been payable by the Federal Government but for the 
State’s universal, comprehensive health care system 
under this section. 
‘‘(3) GENERAL
PERCENTAGE
POINTS
IN-
CREASE IN FMAP FOR CALENDAR QUARTERS OCCUR-
RING DURING THE PERIOD OF THE DEMONSTRATION 
GRANT.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of law, for each State for which 
a demonstration grant is approved under this 
section, the FMAP of the State shall be in-
creased by 3 percentage points for each cal-
endar quarter occurring during the period re-
ferred to in subsection (c). 
‘‘(B) FMAP.—In this paragraph, the term 
‘FMAP’ means the Federal medical assistance 
percentage, as defined in section 1905(b). 
‘‘(f) WAIVER OF ERISA PREEMPTION AND WAIVERS 
TO POOL FUNDS.—As part of a demonstration grant 
under this section and subject to the benefit maintenance 
requirements applicable under section 2204(b), a State 
may request (and the Secretary may grant) the following 
waivers of requirements and provisions to the extent nec-
essary to carry out the State plan under section 2204: 
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‘‘(1) ERISA.—Waiving application of section 
514 of the Employee Retirement Income Security 
Act of 1974. 
‘‘(2) MEDICARE.—Waiving provisions necessary 
to permit the State— 
‘‘(A) to use funds otherwise paid under 
title XVIII for beneficiaries residing in the 
State; and 
‘‘(B) to permit the State to enter into an 
arrangement with the Secretary under which el-
igible State residents who are not otherwise en-
rolled for benefits under parts A and B of such 
title are enrolled for such benefits under such 
title and the State provides for such actuarially 
appropriate reimbursement to the Secretary 
with respect to coverage of such benefits for 
such residents as is necessary to assure that the 
Federal Hospital Insurance Trust Fund and 
the Federal Supplementary Medical Insurance 
Trust Fund under such title are not adversely 
affected by virtue of such waiver, such reim-
bursement subject to— 
‘‘(i) an independent audit, to be re-
viewed by the Comptroller General of the 
United States, assuring that such reim-
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bursement does not adversely affect in any 
way such Trust Funds, and 
‘‘(ii) in the case that the audit deter-
mines that additional reimbursement to the 
Secretary is required, such additional reim-
bursement, with appropriate adjustments 
for interest attributable to the late reim-
bursement. 
‘‘(3) MEDICAID.—Waiving provisions necessary 
to permit the State to use funds otherwise paid to 
the State under title XIX. 
‘‘(4) SCHIP.—Waiving provisions necessary to 
permit the State to use funds otherwise paid to the 
State under title XXI. 
‘‘(5) FEHBP.—Waiving provisions necessary to 
permit the State to use funds otherwise paid under 
chapter 89 of title 5, United States Code, or allow-
ing the Office of Personnel Management to purchase 
health care coverage for Federal employees and re-
tirees in the State under the State plan. 
‘‘(6) USE OF OTHER FUNDS.—Waiving provi-
sions necessary to permit the State to use funds oth-
erwise provided under other Federal programs for 
the provision of health care coverage or services, as 
identified by the State. 
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‘‘(7) OTHER
LAWS.—Waiving of other provi-
sions of Federal law identified by the State under 
section 2204(f)(3) only if the Secretary determines 
such a waiver to be appropriate after consultation 
with the head of the Federal agency or department 
concerned. 
The Secretary may grant a waiver under this subsection 
only if the State provides the Secretary with satisfactory 
assurances that necessary safeguards have been taken to 
protect the health and welfare of individuals provided serv-
ices under the waiver and that financial accountability is 
maintained for any funds expended under the waiver. The 
Secretary may grant a waiver under paragraph (1) only 
with the concurrence of the Secretary of Labor. 
‘‘(g) REENROLLMENT
OF ELIGIBLE STATE RESI-
DENTS WHO MOVE FROM A PARTICIPATING STATE.—In 
the case of an eligible State resident who is covered under 
a State plan under section 2204, who (but for such cov-
erage) is eligible to be enrolled in a program described in 
subsection (f) (including the Medicare and Medicaid pro-
grams), and who is not enrolled in such a program because 
of such coverage, if the resident leaves the State to reside 
in a State that does not have such a State plan in effect, 
the resident shall be permitted, notwithstanding any other 
provision of law, to enroll immediately in such a program 
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if the resident is still otherwise eligible to be so enrolled. 
In the case of such enrollment in the Medicare program, 
the resident shall be treated for purposes of section 
1882(s)(2) (relating to availability of Medicare supple-
mental policies without underwriting) as if the resident 
had turned 65 years of age on the date the resident enrolls 
in the Medicare program. 
‘‘SEC. 2204. STATE PLAN REQUIREMENTS. 
‘‘(a) COVERAGE.— 
‘‘(1) IN GENERAL.—A State plan shall provide 
a process and a timeline for achieving coverage of all 
eligible State residents statewide, without regard to 
employment status, income, health status or pre-
existing condition, or location of residency within the 
State. 
‘‘(2) OUTREACH MECHANISMS.—A State plan 
shall describe the outreach mechanisms to be used to 
assure coverage of all eligible individuals, including 
measures to assure coverage of individuals in hard- 
to-reach populations and to assure benefits are pro-
vided to eligible individuals located in underserved 
areas. 
‘‘(b) BENEFITS.— 
‘‘(1) IN GENERAL.— 
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