‘‘(A) AMOUNT
OF
ADJUSTMENT.—The 
Federal participation rate under subsection (b) 
with respect to a State shall be increased by— 
‘‘(i) 1 percentage point if the base 
coverage gap of the State has decreased by 
at least 50 percent within 2 years after the 
date of approval of the expansion phase 
(phase I) plan, as determined by the Sec-
retary; and 
‘‘(ii) 3 percentage points if the base 
coverage gap of the State has decreased by 
100 percent within 4 years after the date 
of approval of the expansion phase (phase 
I) plan, as determined by the Secretary. 
‘‘(B) APPLICATION.—The increase de-
scribed in— 
‘‘(i) subparagraph (A)(i) shall only 
apply to a State for the period beginning 
with the month of the determination under 
such subparagraph and ending with the 
month preceding the month of the deter-
mination under subparagraph (A)(ii) (if 
any), but in no event for more than 24 
months; and
‘‘(ii) subparagraph (A)(ii) shall apply 
to a State for any year (or portion thereof) 
beginning with the month of the deter-
mination under such subparagraph. 
‘‘(3) FULL COVERAGE.—For purposes of this 
part, a State shall be deemed to have decreased its 
base coverage gap by 100 percent if the Secretary 
determines that— 
‘‘(A) 98 percent of all eligible residents of 
the State are provided health insurance cov-
erage under the expansion phase (phase I) plan; 
and 
‘‘(B) the remaining 2 percent of such resi-
dents are served by alternative health care de-
livery systems as demonstrated by the State. 
‘‘(d) GRANTS TO INDIAN TRIBES, NATIVE HAWAIIAN 
ORGANIZATIONS, 
AND
ALASKA
NATIVE
ORGANIZA-
TIONS.— 
‘‘(1) IN GENERAL.—Out of funds appropriated 
under subsection (e), the Secretary shall reserve an 
amount, not to exceed 1 percent of the total allot-
ments determined under subsection (a) for a fiscal 
year, to make grants to Indian tribes, Native Hawai-
ian organizations, and Alaska Native organizations 
for development and implementation of universal
health insurance coverage plans for members of such 
tribes and organizations. 
‘‘(2) PLAN.—To be eligible to receive a grant 
under paragraph (1), an Indian tribe, Native Hawai-
ian organization, or Alaska Native organization shall 
submit a universal health insurance coverage plan to 
the Secretary at such time, in such manner, and 
containing such information, as the Secretary may 
require. 
‘‘(3) REGULATIONS.—The Secretary shall issue 
regulations specifying the requirements of this part 
that apply to Indian tribes, Native Hawaiian organi-
zations, and Alaska Native organizations receiving 
grants under paragraph (1). 
‘‘(e) APPROPRIATION.— 
‘‘(1) IN GENERAL.—Out of any funds in the 
Treasury not otherwise appropriated, there is appro-
priated to carry out this title such sums as may be 
necessary for fiscal year 2005 and each fiscal year 
thereafter. 
‘‘(2) BUDGET AUTHORITY.—Paragraph (1) con-
stitutes budget authority in advance of appropria-
tions Acts and represents the obligation of the Fed-
eral Government to provide States, Indian tribes, 
Native Hawaiian organizations, and Alaska Native
organizations with the allotments determined under 
this section and the grants for administrative and 
outreach activities under section 2205. 
‘‘SEC. 2205. ADMINISTRATION. 
‘‘(a) PAYMENTS.— 
‘‘(1) IN GENERAL.— 
‘‘(A) QUARTERLY.—Subject to subpara-
graph (B) and subsection (b), the Secretary 
shall make quarterly payments to each State 
with an expansion phase (phase I) plan ap-
proved under this part, from its allotment 
under section 2204. 
‘‘(B) FUNDING FOR ADMINISTRATION AND 
OUTREACH.— 
‘‘(i) AUTHORITY TO MAKE GRANTS.— 
In addition to the allotments determined 
under section 2204, the Secretary may 
make grants to States, Indian tribes, Na-
tive Hawaiian organizations, and Alaska 
Native organizations for expenditures for 
administrative and outreach activities. 
‘‘(ii) AMOUNTS.— 
‘‘(I) 
IN
GENERAL.—A 
grant 
awarded under this subparagraph 
shall not exceed the applicable per-