exceeds 425, but does not exceed 450 per-
cent of the poverty line, 90 percent. 
‘‘(viii) In the case of such all healthy 
children eligible individuals whose income 
exceeds 450 percent of the poverty line, 
100 percent. 
‘‘(3) PREMIUM PAYMENTS.— 
‘‘(A) IN GENERAL.—The State all healthy 
children plan shall provide effective measures, 
consistent with standards established by the 
Secretary, to make premium payment simple 
and convenient to parents (or other payers) and 
to preserve continuity of coverage. Such meas-
ures shall include— 
‘‘(i) discounts to encourage the pay-
ment of quarterly or annual premiums in 
advance; 
‘‘(ii) options to make premium pay-
ments automatically by credit card, debit 
account payments, electronic fund trans-
fers, payroll withholding, or otherwise; and 
‘‘(iii) payment opportunities at mul-
tiple, convenient community locations. 
‘‘(B) PROMOTING
CONTINUITY
OF
COV-
ERAGE.—In the case of all healthy children eli-
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gible individuals for whom premium payments 
are required under the State plan, the plan 
shall have effective procedures to prevent pre-
mium non-payment from interrupting con-
tinuity of coverage. If there is a default on pre-
mium payments, not including the initial pre-
mium payment, the State plan shall provide 
reasonable opportunities to cure such default, 
including at least a 60-day period, following no-
tice of default, during which overdue premium 
payments may be made without interrupting 
coverage or incurring interest charges, late fees, 
or other costs. 
‘‘(c) COST-SHARING.— 
‘‘(1) LIMITATIONS.—Subject to subsection (d), 
for all healthy children eligible individuals with a 
family income that— 
‘‘(A) does not exceed 200 percent of the 
poverty line, there shall be no out-of-pocket 
cost-sharing imposed; 
‘‘(B) does exceed 200 percent, but does not 
exceed 300 percent, of the poverty line, only 
nominal out-of-pocket cost-sharing may be im-
posed; or 
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‘‘(C) exceeds 300 percent of the poverty 
line, out-of-pocket cost-sharing charged may not 
exceed levels the Secretary finds to be con-
sistent with charges under employer-based 
health insurance for the majority of employees 
enrolled in such coverage nationally. 
In no case shall a child described in subparagraph 
(A) or (B) of section 2202(b)(1) be denied services 
under this title because of failure to pay out-of-pock-
et cost-sharing. 
‘‘(2) WAIVER.—A state may elect to waive or 
reduce out-of-pocket cost-sharing otherwise author-
ized under this subsection. 
‘‘(d) LIMITATIONS ON OUT-OF-POCKET COSTS.— 
‘‘(1) 
CURRENT
MEDICAID.—For 
each 
all 
healthy children eligible individual, premiums and 
out-of-pocket cost-sharing may not exceed the levels 
that would have been charged for that individual 
under State Medicaid and SCHIP law as of October 
1, 2005, updated in a manner specified by the Sec-
retary based on changes, after that date, to average 
earnings among families with incomes that do not 
exceed 200 percent of the poverty line. 
‘‘(2) AFFORDABILITY.—The State plan shall 
provide effective measures, consistent with standards 
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established by the Secretary, to further limit out-of- 
pocket cost-sharing (taking into account both pre-
miums and cost-sharing) of all healthy children eligi-
ble individuals to affordable levels, for both indi-
vidual health care services and total family costs. 
Such measures may include coding of each individ-
ual’s enrollment card. Such measures may not in-
clude a requirement that households track incurred 
costs. 
‘‘(e) CHOICE OF PLANS.—To the extent feasible, a 
State plan must provide, insofar as the plan provides for 
benefits through enrollment in a health benefits plan, for 
each enrollee to have a choice of at least two health plan 
options, consistent with the requirements of section 1932. 
‘‘(f) REIMBURSEMENT RATES.—The State shall es-
tablish under the State plan, in consultation with appro-
priate child health providers and experts— 
‘‘(1) payment rates for providers that are— 
‘‘(A) not less than 80 percent of the aver-
age of payment rates for similar services for 
providers under private health insurance plans 
within that State; and 
‘‘(B) sufficient in amount to ensure that 
enrolled all healthy children eligible individuals 
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have adequate access to all services covered 
under this title; and 
‘‘(2) payments rates to capitated plans that are 
actuarially sound, based on comprehensive encounter 
data. 
‘‘SEC. 2204. PAYMENTS TO STATES. 
‘‘(a) PAYMENT.—Subject to the succeeding provisions 
of this section, the Secretary shall pay to each State with 
a plan approved under this title, an amount for each quar-
ter equal to the Federal all healthy children matching rate 
for the State (as determined under subsection (b)) of the 
total expenditures under the plan for the quarter, except 
that the matching rate for the development and operation 
of information technology shall be the same as the Federal 
matching percentage in effect for such technology under 
subparagraphs (A) and (B) of section 1903(a)(3). 
‘‘(b) COMPUTATION
OF FEDERAL ALL HEALTHY 
CHILDREN MATCHING RATE.— 
‘‘(1) IN GENERAL.—Subject to paragraph (3), 
the Federal all healthy children matching rate under 
this subsection for a State for a calendar quarter in 
a fiscal year is equal to the ratio of— 
‘‘(A) the total expenditures under the 
State plan under this title for the quarter that 
are attributable to required populations and 
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