321 
‘‘(E) APPLICATION OF DIFFERENT MATCH-
ING
RATES.—The Secretary shall provide a 
method under which, for expenditures made 
from a health opportunity account for medical 
care for which the Federal matching rate under 
section 1903(a) exceeds the Federal medical as-
sistance percentage, a State may obtain pay-
ment under such section at such higher match-
ing rate for such expenditures. 
‘‘(3) USE.— 
‘‘(A) GENERAL USES.— 
‘‘(i) IN
GENERAL.—Subject to the 
succeeding provisions of this paragraph, 
amounts in a health opportunity account 
may be used for payment of such health 
care expenditures as the State specifies. 
‘‘(ii) GENERAL
LIMITATION.—In no 
case shall such account be used for pay-
ment for health care expenditures that are 
not payment of medical care (as defined by 
section 213(d) of the Internal Revenue 
Code of 1986). 
‘‘(iii) STATE RESTRICTIONS.—In ap-
plying clause (i), a State may restrict pay-
ment for—
322 
‘‘(I) providers of items and serv-
ices to providers that are licensed or 
otherwise authorized under State law 
to provide the item or service and may 
deny payment for such a provider on 
the basis that the provider has been 
found, whether with respect to this 
title or any other health benefit pro-
gram, to have failed to meet quality 
standards or to have committed one 
or more acts of fraud or abuse; and 
‘‘(II) items and services insofar 
as the State finds they are not medi-
cally appropriate or necessary. 
‘‘(iv) ELECTRONIC
WITHDRAWALS.— 
The State demonstration program shall 
provide for a method whereby withdrawals 
may be made from the account for such 
purposes using an electronic system and 
shall not permit withdrawals from the ac-
count in cash. 
‘‘(B) MAINTENANCE OF HEALTH OPPOR-
TUNITY
ACCOUNT
AFTER
BECOMING
INELI-
GIBLE FOR PUBLIC BENEFIT.—
323 
‘‘(i) IN
GENERAL.—Notwithstanding 
any other provision of law, if an account 
holder of a health opportunity account be-
comes ineligible for benefits under this title 
because of an increase in income or as-
sets— 
‘‘(I) no additional contribution 
shall be made into the account under 
paragraph (2)(A)(i); 
‘‘(II) subject to clause (iii), the 
balance in the account shall be re-
duced by 25 percent; and 
‘‘(III) subject to the succeeding 
provisions of this subparagraph, the 
account shall remain available to the 
account holder for withdrawals under 
the same terms and conditions as if 
the account holder remained eligible 
for such benefits. 
‘‘(ii) SPECIAL
RULES.—Withdrawals 
under this subparagraph from an ac-
count— 
‘‘(I) shall be available for the 
purchase of health insurance coverage; 
and
324 
‘‘(II) may, subject to clause (iv), 
be made available (at the option of 
the State) for such additional expendi-
tures (such as job training and tuition 
expenses) specified by the State (and 
approved by the Secretary) as the 
State may specify. 
‘‘(iii) EXCEPTION FROM 25 PERCENT 
SAVINGS
TO
GOVERNMENT
FOR
PRIVATE 
CONTRIBUTIONS.—Clause (i)(II) shall not 
apply to the portion of the account that is 
attributable to contributions described in 
paragraph (2)(A)(ii). For purposes of ac-
counting for such contributions, with-
drawals from a health opportunity account 
shall first be attributed to contributions 
described in paragraph (2)(A)(i). 
‘‘(iv) CONDITION
FOR
NON-HEALTH 
WITHDRAWALS.—No withdrawal may be 
made from an account under clause (ii)(II) 
unless the accountholder has participated 
in the program under this section for at 
least 1 year. 
‘‘(v) NO REQUIREMENT FOR CONTINU-
ATION OF COVERAGE.—An account holder
325 
of a health opportunity account, after be-
coming ineligible for medical assistance 
under this title, is not required to purchase 
high-deductible or other insurance as a 
condition of maintaining or using the ac-
count. 
‘‘(4) ADMINISTRATION.—A State may coordi-
nate administration of health opportunity accounts 
through the use of a third party administrator and 
reasonable expenditures for the use of such adminis-
trator shall be reimbursable to the State in the same 
manner as other administrative expenditures under 
section 1903(a)(7). 
‘‘(5) TREATMENT.—Amounts in, or contributed 
to, a health opportunity account shall not be counted 
as income or assets for purposes of determining eli-
gibility for benefits under this title. 
‘‘(6) UNAUTHORIZED WITHDRAWALS.—A State 
may establish procedures— 
‘‘(A) to penalize or remove an individual 
from the health opportunity account based on 
nonqualified withdrawals by the individual from 
such an account; and 
‘‘(B) to recoup costs that derive from such 
nonqualified withdrawals.’’.