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paragraph (B) or subparagraph (C) of sub-
section (d)(1)).
‘‘(3) WAIVER
OF
STATEWIDENESS
REQUIRE-
MENT.—At the request of a State, the Secretary
may waive for a period not to exceed 3 years (sub-
ject to one 3-year extension) the requirement under
paragraph (1) that the State health allowance pro-
gram be in effect in all political subdivisions of the
State.
‘‘(d) ELIGIBILITY OF INDIVIDUALS TO PARTICIPATE
IN ALLOWANCE PROGRAM.—
‘‘(1) AUTOMATIC
ELIGIBILITY
OF
MEDICAID
CATEGORICALLY
ELIGIBLE
INDIVIDUALS.—Subject
to subsection (e), any individual to whom the State
makes medical assistance available under the State
plan under this title pursuant to clause (i) of section
1902(a)(10)(A) shall be eligible to participate in the
State health allowance program.
‘‘(2) MANDATORY ELIGIBILITY OF INDIVIDUALS
WITH INCOME UNDER THE POVERTY LEVEL.—
‘‘(A) IN GENERAL.—Subject to subsection
(e) and subparagraph (B), an individual law-
fully residing in the State shall be eligible to
participate in the program if the income of the
individual’s family is equal to or less than 100
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percent of the official poverty line (as defined
by the Office of Management and Budget, and
revised annually in accordance with section
673(2) of the Omnibus Budget Reconciliation
Act of 1991) applicable to a family of the size
involved.
‘‘(B) EXCEPTION.—If the application of
subparagraph (A) would result in—
‘‘(i) the total State expenditures for a
quarter under this title (including expendi-
tures attributable to this section and sec-
tion 1923), exceeding
‘‘(ii) the total State expenditures that
the Secretary estimates would have been
made under this title for the quarter if the
State did not have a program under this
section,
then there shall be substituted for 100 percent
in subparagraph (A) such percent as would re-
sult in the amount described in clause (i) equal-
ing the amount described in clause (ii).
‘‘(3) OPTIONAL
ELIGIBILITY
OF
INDIVIDUALS
WITH
INCOME
UP
TO
200
PERCENT
OF
POVERTY
LEVEL.—
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‘‘(A) IN GENERAL.—Subject to subsection
(e), a State operating a State health allowance
program under this section may make an indi-
vidual lawfully residing in the State eligible to
participate in the program if the income of the
individual’s family is greater than 100 percent
(but less than such percentage, not to exceed
200 percent, as the State may specify) of such
official poverty line.
‘‘(B) CONTRIBUTION MAY BE REQUIRED.—
In the case of an individual who is participating
in the program under this paragraph, the pro-
gram may require such an individual to contrib-
ute all (or a portion) of the premiums and cost-
sharing of such a group health plan if the
amount of such contribution is determined in
accordance with a sliding scale based on the in-
dividual’s family income.
‘‘(e) EXCLUSION AND USE OF RESOURCE STAND-
ARD.—
‘‘(1) EXCLUSION OF ELDERLY MEDICARE-ELIGI-
BLE INDIVIDUALS.—No individual shall be eligible to
participate in the program if the individual is enti-
tled to benefits under title XVIII of the Social Secu-
rity Act pursuant to section 226 of such Act.
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‘‘(2) USE OF RESOURCE STANDARD.—A State
may require an individual to meet a resource stand-
ard as a condition of eligibility to participate in the
program only if the Secretary approves the State’s
use of such a standard.
‘‘(f) CONSTRUCTION.—No provision of any Federal
law shall prevent a State from enrolling any employee or
other individual in accordance with this section. The pre-
vious sentence shall not be construed as permitting a State
to require the employer of an individual participating in
the program to contribute toward the individual’s pre-
mium required for such participation.
‘‘(g) EVALUATIONS AND REPORTS.—
‘‘(1) EVALUATIONS.—Not later than 3 years
after the date of the enactment of this section (and
at such subsequent intervals as the Secretary consid-
ers appropriate), the Secretary shall evaluate the ef-
fectiveness of the State health allowance programs
for which Federal financial participation is provided
under this section, and the impact of such programs
on increasing the number of individuals with health
insurance coverage in participating States and in
controlling the costs of health care in such States.
‘‘(2) REPORTS.—Not later than 3 years after
the date of the enactment of this section (and at
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such subsequent intervals as the Secretary considers
appropriate), the Secretary shall submit a report on
the program to Congress.’’.
(b) ENSURING BUDGET NEUTRALITY THROUGH RE-
DUCTION IN DISPROPORTIONATE SHARE HOSPITAL PAY-
MENTS FOR PARTICIPATING STATES.—Section 1923 of
the Social Security Act (42 U.S.C. 1396r–4), as amended
by section 13621(b)(1) of the Omnibus Budget Reconcili-
ation Act of 1993, is amended by adding at the end the
following new subsection:
‘‘(h) REDUCTION IN PAYMENT ADJUSTMENTS FOR
STATES WITH HEALTH ALLOWANCE PROGRAMS.—In the
case of a State operating a State health allowance pro-
gram under section 1931 in a fiscal year, the Secretary
shall reduce the total payment adjustments made under
this section for hospitals in the State for quarters in the
year by such amount as the Secretary determines to be
necessary to ensure that the total amount paid to the
State under section 1903(a)(1) for the year does not ex-
ceed the amount that would have been paid to the State
under such section for the year if the State did not operate
such a program.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to calendar quarters beginning on
or after January 1, 1994.
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SEC. 1602. OPTIONAL USE OF PROGRAM TO OFFER COV-
ERAGE TO SOME OR ALL STATE RESIDENTS.
Section 1931 of the Social Security Act, as inserted
by section 1601(a)(2), is amended—
(1) in subsection (c)(2)(A), in the matter before
clause (i), by inserting ‘‘, except as provided in sub-
section (d)(4)(B)(iii),’’ after ‘‘unless’’, and
(2) by adding at the end of subsection (d) the
following new paragraphs:
‘‘(4) OPTIONAL ENROLLMENT OF OTHER INDI-
VIDUALS.—
‘‘(A) IN GENERAL.—Subject to subsection
(e), a State operating a State health allowance
program under this section may make any indi-
vidual (or class of individuals) who is not de-
scribed in paragraph (1), (2), or (3) and who
is not offered coverage under an employer
group health plan eligible to participate in the
program.
‘‘(B) SPECIAL RULES.—
‘‘(i) CONTRIBUTION
MAY
BE
RE-
QUIRED.—In the case of an individual who
is participating in the program under this
paragraph, the program may require such
an individual to contribute all (or a por-