grams. In addition, 8 States stopped enrollment 
in SCHIP for a period of time between April 
2003 and July 2004. As a result, SCHIP en-
rollment fell by 200,000 children for the first 
time in the program’s history. 
(G) It is estimated that nearly 50 percent 
of children covered through SCHIP do not re-
main in the program due to reenrollment bar-
riers. A recent study found that between 10 and 
40 percent of these children are ‘‘lost’’ in the 
system. Difficult renewal policies and reenroll-
ment barriers make seamless coverage in 
SCHIP unattainable. Studies indicate that as 
many as 67 percent of children who were eligi-
ble but not enrolled for SCHIP had applied for 
coverage but were denied due to procedural 
issues. 
(H) While the medicaid program and 
SCHIP expansions to date have done much to 
offset what otherwise would have been a signifi-
cant loss of coverage among children because of 
declining access to employer coverage, the 
shortcomings of previous expansions, such as 
the failure to enroll all eligible children and
caps on enrollment in SCHIP because of under-
funding, also are clear. 
TITLE I—EXPANDED COVERAGE 
OF CHILDREN UNDER MED-
ICAID AND SCHIP 
SEC. 101. STATE OPTION TO RECEIVE 100 PERCENT FMAP 
FOR MEDICAL ASSISTANCE FOR CHILDREN 
IN POVERTY IN EXCHANGE FOR EXPANDED 
COVERAGE OF CHILDREN IN WORKING POOR 
FAMILIES UNDER MEDICAID OR SCHIP. 
(a) STATE OPTION.—Title XIX of the Social Security 
Act (42 U.S.C. 1396 et seq.) is amended by redesignating 
section 1936 as section 1937, and by inserting after sec-
tion 1935 the following: 
‘‘STATE OPTION FOR INCREASED FMAP FOR MEDICAL AS-
SISTANCE FOR CHILDREN IN POVERTY IN EXCHANGE 
FOR EXPANDED COVERAGE OF CHILDREN IN WORK-
ING POOR FAMILIES UNDER THIS TITLE OR TITLE 
XXI 
‘‘SEC. 1936. (a) 100 PERCENT FMAP.—
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this title, in the case of a State that, 
through an amendment to each of its State plans 
under this title and title XXI (or to a waiver of ei-
ther such plan), agrees to satisfy the conditions de-
scribed in subsections (b), (c), and (d) the Federal
medical assistance percentage shall be 100 percent 
with respect to the total amount expended by the 
State for providing medical assistance under this 
title for each fiscal year quarter beginning on or 
after the date described in subsection (e) for chil-
dren whose family income does not exceed 100 per-
cent of the poverty line. 
‘‘(2) LIMITATION ON SCOPE OF APPLICATION 
OF INCREASE.—The increase in the Federal medical 
assistance percentage for a State under this section 
shall apply only with respect to the total amount ex-
pended for providing medical assistance under this 
title for a fiscal year quarter for children described 
in paragraph (1) and shall not apply with respect 
to—
‘‘(A) any other payments made under this 
title, including disproportionate share hospital 
payments described in section 1923; 
‘‘(B) payments under title IV or XXI; or 
‘‘(C) any payments made under this title 
or title XXI that are based on the enhanced 
FMAP described in section 2105(b). 
‘‘(b) ELIGIBILITY EXPANSIONS.—The condition de-
scribed in this subsection is that the State agrees to do 
the following:
‘‘(1) COVERAGE
UNDER
MEDICAID
OR
SCHIP 
FOR CHILDREN IN FAMILIES WHOSE INCOME DOES 
NOT
EXCEED
300
PERCENT
OF
THE
POVERTY 
LINE.—
‘‘(A) IN GENERAL.—The State agrees to 
provide medical assistance under this title or 
child health assistance under title XXI to chil-
dren whose family income exceeds the medicaid 
applicable income level (as defined in section 
2110(b)(4) but by substituting ‘January 1, 
2005’ for ‘March 31, 1997’), but does not ex-
ceed 300 percent of the poverty line. 
‘‘(B) STATE
OPTION
TO
EXPAND
COV-
ERAGE
THROUGH
SUBSIDIZED
PURCHASE
OF 
FAMILY COVERAGE.—A State may elect to carry 
out subparagraph (A) through the provision of 
assistance for the purchase of dependent cov-
erage under a group health plan or health in-
surance coverage if—
‘‘(i) the dependent coverage is con-
sistent with the benefit standards under 
this title or title XXI, as approved by the 
Secretary; and 
‘‘(ii) the State provides ‘wrap-around’ 
coverage under this title or title XXI.
‘‘(C) DEEMED SATISFACTION FOR CERTAIN 
STATES.—A State that, as of January 1, 2005, 
provides medical assistance under this title or 
child health assistance under title XXI to chil-
dren whose family income is 300 percent of the 
poverty line shall be deemed to satisfy this 
paragraph. 
‘‘(2) COVERAGE
FOR
CHILDREN
UNDER
AGE 
21.—The State agrees to define a child for purposes 
of this title and title XXI as an individual who has 
not attained 21 years of age. 
‘‘(3) OPPORTUNITY FOR HIGHER INCOME CHIL-
DREN TO PURCHASE SCHIP COVERAGE.—The State 
agrees to permit any child whose family income ex-
ceeds 300 percent of the poverty line to purchase 
full or ‘wrap-around’ coverage under title XXI at the 
full cost of providing such coverage, as determined 
by the State. 
‘‘(4) COVERAGE FOR LEGAL IMMIGRANT CHIL-
DREN.—The State agrees to—
‘‘(A) provide medical assistance under this 
title and child health assistance under title XXI 
for alien children who are lawfully residing in 
the United States (including battered aliens de-
scribed in section 431(c) of the Personal Re-
sponsibility and Work Opportunity Reconcili-
ation Act of 1996) and who are otherwise eligi-
ble for such assistance in accordance with sec-
tion 1903(v)(4) and 2107(e)(1)(E); and 
‘‘(B) not establish or enforce barriers that 
deter applications by such aliens, including 
through the application of the removal of the 
barriers described in subsection (c). 
‘‘(c) REMOVAL OF ENROLLMENT AND ACCESS BAR-
RIERS.—The condition described in this subsection is that 
the State agrees to do the following: 
‘‘(1) PRESUMPTIVE
ELIGIBILITY
FOR
CHIL-
DREN.—The State agrees to—
‘‘(A) provide presumptive eligibility for 
children under this title and title XXI in ac-
cordance with section 1920A; and 
‘‘(B) treat any items or services that are 
provided to an uncovered child (as defined in 
section 2110(c)(8)) who is determined ineligible 
for medical assistance under this title as child 
health assistance for purposes of paying a pro-
vider of such items or services, so long as such 
items or services would be considered child 
health assistance for a targeted low-income 
child under title XXI.