(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—REQUIREMENT FOR EMPLOYERS TO PROVIDE HEALTH 
INSURANCE COVERAGE 
Sec. 101. Requirement for employers to provide health insurance coverage. 
Sec. 102. Tax credits for employers to provide health insurance coverage. 
Sec. 103. Health care costs of nontaxpayer employers. 
TITLE II—EXPANSION OF EXISTING PUBLIC PROGRAMS 
Subtitle A—Access to Medicare Benefits for Individuals 55–to–65 Years of 
Age 
Sec. 201. Access to medicare benefits for individuals 55–to–65 years of age. 
Subtitle B—Refundable Tax Credit for Employee Costs of COBRA Coverage 
Sec. 211. Refundable tax credit for employee costs of COBRA coverage. 
Subtitle C—FamilyCare 
Sec. 221. Renaming of title XXI program. 
Sec. 222. Familycare coverage of parents and pregnant women under the med-
icaid program and title XXI. 
Sec. 223. Automatic enrollment of children born to title XXI parents. 
Sec. 224. Allowing States to simplify rules for families. 
Sec. 225. Revision and simplification of the transitional medical assistance pro-
gram (TMA). 
Sec. 226. Limitations on conflicts of interest. 
Sec. 227. Increase in chip allotment for each of fiscal years 2002 through 
2004. 
Sec. 228. Demonstration programs to improve medicaid and chip outreach to 
homeless individuals and families. 
Sec. 229. Additional chip revisions. 
Sec. 230. Increased Federal reimbursement for language services under the 
medicaid program and title XXI. 
TITLE III—NATIONAL CENTER FOR EVIDENCE-BASED 
HEALTHCARE PRACTICES 
Sec. 301. Establishment of center.
TITLE 
I—REQUIREMENT 
FOR 
EMPLOYERS 
TO 
PROVIDE 
HEALTH 
INSURANCE 
COV-
ERAGE 
SEC. 101. REQUIREMENT FOR EMPLOYERS TO PROVIDE 
HEALTH INSURANCE COVERAGE. 
(a) IN GENERAL.—Each employers must offer health 
insurance coverage constituting qualified health care to 
employees and former employees of such employer and to 
their families. 
(b) INCORPORATION OF TERMS.—For purposes of 
subsection (a), the terms ‘‘employer’’, ‘‘qualified health 
care’’, ‘‘employee’’, ‘‘former employee’’, and ‘‘family’’ have 
the meanings given such terms for purposes of chapter 
101 of the Internal Revenue Code of 1986, as added by 
section 102(a). 
SEC. 102. TAX CREDITS FOR EMPLOYERS TO PROVIDE 
HEALTH INSURANCE COVERAGE. 
(a) IN GENERAL.—The Internal Revenue Code of 
1986 is amended by adding at the end the following new 
subtitle: 
‘‘Subtitle L—Employment-Based 
Health Insurance Tax Credits 
‘‘CHAPTER 101—EMPLOYMENT-BASED HEALTH INSURANCE TAX 
CREDITS
‘‘CHAPTER 101—EMPLOYMENT-BASED 
HEALTH INSURANCE TAX CREDITS 
‘‘Sec. 9901. Health care costs of employers. 
‘‘Sec. 9902. Health insurance costs of the self-employed. 
‘‘Sec. 9903. Health insurance costs of certain low wage workers. 
‘‘Sec. 9904. Special rules. 
‘‘SEC. 9901. HEALTH CARE COSTS OF EMPLOYERS. 
‘‘(a) CREDIT FOR EMPLOYERS PROVIDING INSUR-
ANCE PRE-EFFECTIVE DATE.— 
‘‘(1) IN GENERAL.—In the case of a specified 
employer, there shall be allowed as a credit against 
the tax imposed by subtitle A an amount equal to 
60 percent of the amount paid or incurred by the 
employer during the taxable year to provide qualified 
health care (directly or otherwise) to the employees 
and former employees of such employer and to their 
families. 
‘‘(2) SPECIFIED EMPLOYER.—For purposes of 
this subsection— 
‘‘(A) IN
GENERAL.—The term ‘specified 
employer’ means any employer who provided 
health care (directly or otherwise) to any em-
ployee or former employee of such employer 
under a group health plan (as defined in section 
5000(b)) during the 1-year period ending on 
January 1, 2005.
‘‘(B) SUCCESSOR EMPLOYERS.—Except as 
provided in regulations, any entity and any 
predecessor or successor entities of such entity 
shall be treated as 1 entity. 
(b) CREDIT FOR OTHER EMPLOYERS.— 
(1) IN GENERAL.—In the case of any employer 
(other than an employer to which subsection (a) ap-
plies), there shall be allowed as a credit against the 
tax imposed by subtitle A an amount equal to the 
lesser of— 
‘‘(A) 100 percent of the amount paid or in-
curred by the employer during the taxable year 
to provide qualified health care (directly or oth-
erwise) to the employees and former employees 
of such employer and to their families, or 
‘‘(B) 60 percent of the total amounts paid 
or incurred (including any amounts paid or in-
curred by employees or former employees of the 
employer as premiums or other cost-sharing) 
during the taxable year to provide qualified 
health care (directly or otherwise) to the em-
ployees and former employees of such employer 
and to their families. 
‘‘(c) QUALIFIED HEALTH CARE.—For purposes of 
this section, the term ‘qualified health care’ means health
care for which the employer bears 60 percent or more of 
the cost. 
‘‘(d) CERTAIN EMPLOYMENT NOT TAKEN INTO AC-
COUNT.—For purposes this section, except as provided in 
regulations by the Secretary, an individual shall be treated 
as an employee only with respect to employment described 
in section 3121(b) (determined without regard to para-
graph (7) thereof). 
‘‘SEC. 9902. HEALTH INSURANCE COSTS OF THE SELF-EM-
PLOYED. 
‘‘(a) IN GENERAL.—In the case of an individual who 
is an employee within the meaning of section 401(c)(1), 
there shall be allowed as a credit against the tax imposed 
by subtitle A an amount equal to 60 percent of the amount 
paid by the taxpayer during the taxable year for insurance 
which constitutes medical care for the taxpayer, his 
spouse, and dependents. 
‘‘(b) LIMITATIONS.— 
‘‘(1) DOLLAR AMOUNT.—No credit shall be al-
lowed under subsection (a) to the extent that the 
amount of such credit exceeds the taxpayer’s earned 
income (within the meaning of section 401(c)) de-
rived by the taxpayer from the trade or business 
with respect to which the plan providing the medical 
care coverage is established.
‘‘(2) OTHER COVERAGE.—Subsection (a) shall 
not apply to any taxpayer for any calendar month 
for which the taxpayer is eligible to participate in 
any subsidized health plan maintained by any em-
ployer of the taxpayer or of the spouse of the tax-
payer. The preceding sentence shall be applied sepa-
rately with respect to— 
‘‘(A) plans which include coverage for 
qualified long-term care services (as defined in 
section 7702B(c)) or are qualified long-term 
care insurance contracts (as defined in section 
7702B(b)), and 
‘‘(B) plans which do not include such cov-
erage and are not such contracts. 
‘‘(3) LONG-TERM
CARE
PREMIUMS.—In the 
case of a qualified long-term care insurance contract 
(as defined in section 7702B(b)), only eligible long- 
term 
care 
premiums 
(as 
defined 
in 
section 
213(d)(10) shall be taken into account under para-
graph (1). 
‘‘SEC. 9903. HEALTH INSURANCE COSTS OF CERTAIN LOW 
WAGE WORKERS. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a credit against the tax imposed 
by subtitle A an amount equal to 25 percent of the amount
paid by the taxpayer for coverage of the taxpayer, his 
spouse, and dependents under any subsidized health plan 
maintained by any employer of the taxpayer or of the 
spouse of the taxpayer. 
‘‘(b) LIMITATION.— 
‘‘(1) IN GENERAL.—The amount of the credit 
allowed under subsection (a) shall be reduced (but 
not below zero) by an amount which bears the same 
ratio to the amount so determined as— 
‘‘(A) the amount (if any) by which the tax-
payer’s adjusted gross income for the taxable 
year exceeds the threshold amount, bears to 
‘‘(B) the threshold amount. 
‘‘(2) THRESHOLD AMOUNT.—For purposes of 
this subsection, the term ‘threshold amount’ means 
the poverty line (as defined in section 673(2) of the 
Community Services Block Grant Act, including any 
revision required by such section) for a family of the 
size involved, as in effect at the close of the taxable 
year. 
‘‘(c) SPECIAL RULES.— 
‘‘(1) 
COORDINATION
WITH
SAVINGS
AC-
COUNTS.—Amounts distributed from an Archer 
MSA (as defined in section 220(d)) or a health sav-
ings account (as defined in section 223(d)) shall not 
be taken into account under subsection (a). 
‘‘(2) DENIAL OF CREDIT TO DEPENDENTS.—No 
credit shall be allowed under this section to any indi-
vidual with respect to whom a deduction under sec-
tion 151 is allowable to another taxpayer for a tax-
able year beginning in the calendar year in which 
such individual’s taxable year begins. 
‘‘(3) MARRIED COUPLES MUST FILE JOINT RE-
TURN.—If the taxpayer is married at the close of 
the taxable year, the credit shall be allowed under 
subsection (a) only if the taxpayer and his spouse 
file a joint return for the taxable year. Rules similar 
to the rules of paragraphs (3) and (4) of section 
21(e) shall apply for purposes of this paragraph. 
‘‘SEC. 9904. SPECIAL RULES. 
‘‘(a) CREDITS TREATED AS REFUNDABLE.—For pur-
poses of this title, the credits allowed under this chapter 
shall be treated as allowed under subpart C of part IV 
of subchapter A of chapter 1. 
‘‘(b) 
COORDINATION
WITH
DEDUCTIONS.—Any 
amount which is taken into account under section 
9901(a)(1), 9901(b)(1) (determined without regard to sec-
tion 9901(b)(1)(B)), 9902(a), or 9903(a) shall not be
taken into account in determining any deduction under 
subtitle A. 
‘‘(c) REGULATIONS.—The Secretary may prescribe 
such regulations and other guidance as may be necessary 
or appropriate to carry out this chapter.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 162 of the Internal Revenue Code 
of 1986 is amended by striking subsection (l). 
(2) Paragraph (2) of section 1324(b) of title 
31, United States Code, is amended by inserting ‘‘or 
chapter 101’’ after ‘‘section 35’’. 
(3) The table of subtitles of the Internal Rev-
enue Code of 1986 is amended by adding at the end 
the following new item: 
‘‘Subtitle L—Employment-based health insurance tax credits.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this subsection shall apply to taxable years beginning after 
December 31, 2004. 
SEC. 103. HEALTH CARE COSTS OF NONTAXPAYER EMPLOY-
ERS. 
(a) PAYMENTS BY SECRETARY OF THE TREASURY.— 
The Secretary of the Treasury shall establish a program 
under which the Secretary shall make payments to quali-
fied nontaxpayer employers in amounts equal to the cred-
its that such employers would have been allowed under 
section 9901 of the Internal Revenue Code of 1986 if such
employers were subject to, and not exempt from, taxation 
under subtitle A of such Code. 
(b) QUALIFIED NONTAXPAYER EMPLOYERS.—For 
purposes of this section, the term ‘‘qualified nontaxpayer 
employer’’ means any employer which is— 
(A) a State, political subdivision of a 
State, or any agency or instrumentality of a 
State or political subdivision of a State, 
(B) any Indian tribal government (as de-
fined in section 7701(a)(40) of the Internal 
Revenue Code of 1986), subdivision of an In-
dian tribal government (determined in accord-
ance with section 7871(d) of such Code), or an 
agency or instrumentality of an Indian tribal 
government or subdivision thereof, or 
(C) any other organization (other than a 
governmental or tribal unit) exempt from tax 
under subtitle A of the Internal Revenue Code 
of 1986.
TITLE II—EXPANSION OF 
EXISTING PUBLIC PROGRAMS 
Subtitle A—Access to Medicare Benefits for Individuals 
55-to-65 Years of Age 
SEC. 201. ACCESS TO MEDICARE BENEFITS FOR INDIVID-
UALS 55-TO-65 YEARS OF AGE. 
(a) IN GENERAL.—Title XVIII of the Social Security 
Act, as amended by section 101(a) of the Medicare Pre-
scription Drug, Improvement, and Modernization Act of 
2003 (Public Law 108–173), is amended— 
(1) by redesignating part E as part F; and 
(2) by inserting after part D the following new 
part: 
‘‘PART E—PURCHASE OF MEDICARE BENEFITS 
BY CERTAIN INDIVIDUALS 55-TO-65 YEARS OF 
AGE 
‘‘SEC. 1860E–1. PROGRAM BENEFITS; ELIGIBILITY. 
‘‘(a) ENTITLEMENT TO MEDICARE BENEFITS FOR 
ENROLLED INDIVIDUALS.— 
‘‘(1) IN
GENERAL.—An individual enrolled 
under this part is entitled to the same benefits 
under this title as an individual entitled to benefits 
or enrolled under any part of this title. 
‘‘(2) DEFINITIONS.—For purposes of this part:
‘‘(A) FEDERAL OR STATE COBRA CON-
TINUATION PROVISION.—The term ‘Federal or 
State COBRA continuation provision’ has the 
meaning given the term ‘COBRA continuation 
provision’ in section 2791(d)(4) of the Public 
Health Service Act and includes a comparable 
State program, as determined by the Secretary. 
‘‘(B) FEDERAL HEALTH INSURANCE PRO-
GRAM DEFINED.—The term ‘Federal health in-
surance program’ means any of the following: 
‘‘(i) MEDICARE.—Any part of this 
title (other than by reason of this part). 
‘‘(ii) MEDICAID.—A State plan under 
title XIX. 
‘‘(iii) FEHBP.—The Federal employ-
ees health benefit program under chapter 
89 of title 5, United States Code. 
‘‘(iv) 
TRICARE.—The 
TRICARE 
program (as defined in section 1072(7) of 
title 10, United States Code). 
‘‘(v) ACTIVE DUTY MILITARY.—Health 
benefits under title 10, United States 
Code, to an individual as a member of the 
uniformed services of the United States.
‘‘(C) GROUP
HEALTH
PLAN.—The term 
‘group health plan’ has the meaning given such 
term in section 2791(a)(1) of the Public Health 
Service Act. 
‘‘(b) ELIGIBILITY OF INDIVIDUALS AGE 55-TO-65 
YEARS OF AGE.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
an individual who meets the following requirements 
with respect to a month is eligible to enroll under 
this part with respect to such month: 
‘‘(A) AGE.—As of the last day of the 
month, the individual has attained 55 years of 
age, but has not attained 65 years of age. 
‘‘(B) MEDICARE
ELIGIBILITY (BUT
FOR 
AGE).—The individual would be eligible for ben-
efits under part A or part B for the month if 
the individual were 65 years of age. 
‘‘(C) 
NOT
ELIGIBLE
FOR
COVERAGE 
UNDER
GROUP
HEALTH
PLANS
OR
FEDERAL 
HEALTH
INSURANCE
PROGRAMS.—The indi-
vidual is not eligible for benefits or coverage 
under a Federal health insurance program (as 
defined in subsection (a)(2)(B)) or under a 
group health plan (other than such eligibility 
merely through a Federal or State COBRA con-
tinuation provision) as of the last day of the 
month involved. 
‘‘(2) LIMITATION
ON
ELIGIBILITY
IF
TERMI-
NATED ENROLLMENT.—If an individual described in 
paragraph (1) enrolls under this part and coverage 
of the individual is terminated under section 1860E– 
2(d) (other than because of age), the individual is 
not again eligible to enroll under this subsection un-
less the following requirements are met: 
‘‘(A) NEW
COVERAGE
UNDER
GROUP 
HEALTH
PLAN
OR
FEDERAL
HEALTH
INSUR-
ANCE PROGRAM.—After the date of termination 
of coverage under such section, the individual 
obtains coverage under a group health plan or 
under a Federal health insurance program. 
‘‘(B) SUBSEQUENT
LOSS
OF
NEW
COV-
ERAGE.—The individual subsequently loses eli-
gibility for the coverage described in subpara-
graph (A) without regard to whether the indi-
vidual has exhausted any eligibility the indi-
vidual may subsequently have for coverage 
under a Federal or State COBRA continuation 
provision. 
‘‘(3) CHANGE
IN
HEALTH
PLAN
ELIGIBILITY 
DOES NOT AFFECT COVERAGE.—In the case of an
individual who is eligible for and enrolls under this 
part under this subsection, the individual’s continued 
entitlement to benefits under this part shall not be 
affected by the individual’s subsequent eligibility for 
benefits or coverage described in paragraph (1)(C), 
or entitlement to such benefits or coverage. 
‘‘SEC. 1860E–2. ENROLLMENT PROCESS; COVERAGE. 
‘‘(a) IN GENERAL.—An individual may enroll in the 
program established under this part only in such manner 
and form as may be prescribed by regulations, and only 
during an enrollment period prescribed by the Secretary 
consistent with the provisions of this section. Such regula-
tions shall provide a process under which individuals eligi-
ble to enroll as of a month are permitted to pre-enroll dur-
ing a prior month within an enrollment period described 
in subsection (b). 
‘‘(b) ENROLLMENT PERIODS.— 
‘‘(1) INDIVIDUALS 55-TO-65 YEARS OF AGE.—In 
the case of individuals eligible to enroll under this 
part under section 1860E–1(b)— 
‘‘(A) INITIAL
ENROLLMENT
PERIOD.—If 
the individual is eligible to enroll under such 
section for January 2005, the enrollment period 
shall begin on November 1, 2004, and shall end 
on February 28, 2005. Any such enrollment be-
fore January 1, 2005, is conditioned upon com-
pliance with the conditions of eligibility for Jan-
uary 2005. 
‘‘(B) SUBSEQUENT PERIODS.—If the indi-
vidual is eligible to enroll under such section for 
a month after January 2005, the enrollment pe-
riod shall begin on the first day of the second 
month before the month in which the individual 
first is eligible to so enroll and shall end four 
months later. Any such enrollment before the 
first day of the third month of such enrollment 
period is conditioned upon compliance with the 
conditions of eligibility for such third month. 
‘‘(2) AUTHORITY
TO
CORRECT
FOR
GOVERN-
MENT ERRORS.—The provisions of section 1837(h) 
apply with respect to enrollment under this part in 
the same manner as they apply to enrollment under 
part B. 
‘‘(c) DATE COVERAGE BEGINS.— 
‘‘(1) IN GENERAL.—The period during which 
an individual is entitled to benefits under this part 
shall begin as follows, but in no case earlier than 
January 1, 2005: 
‘‘(A) In the case of an individual who en-
rolls (including pre-enrolls) before the month in
which the individual satisfies eligibility for en-
rollment under section 1860E–1, the first day 
of such month of eligibility. 
‘‘(B) In the case of an individual who en-
rolls during or after the month in which the in-
dividual first satisfies eligibility for enrollment 
under such section, the first day of the fol-
lowing month. 
‘‘(2) AUTHORITY
TO
PROVIDE
FOR
PARTIAL 
MONTHS
OF
COVERAGE.—Under regulations, the 
Secretary may, in the Secretary’s discretion, provide 
for coverage periods that include portions of a 
month in order to avoid lapses of coverage. 
‘‘(3) LIMITATION ON PAYMENTS.—No payments 
may be made under this title with respect to the ex-
penses of an individual enrolled under this part un-
less such expenses were incurred by such individual 
during a period which, with respect to the individual, 
is a coverage period under this section. 
‘‘(d) TERMINATION OF COVERAGE.— 
‘‘(1) IN
GENERAL.—An individual’s coverage 
period under this part shall continue until the indi-
vidual’s enrollment has been terminated at the ear-
liest of the following: 
‘‘(A) GENERAL PROVISIONS.—
‘‘(i) NOTICE.—The individual files no-
tice (in a form and manner prescribed by 
the Secretary) that the individual no 
longer wishes to participate in the insur-
ance program under this part. 
‘‘(ii) NONPAYMENT OF PREMIUMS.— 
The individual fails to make payment of 
premiums required for enrollment under 
this part. 
‘‘(iii) MEDICARE
ELIGIBILITY.—The 
individual becomes entitled to benefits or 
enrolled under any other part of this title 
(other than by reason of this part). 
‘‘(B) TERMINATION BASED ON AGE.—The 
individual attains 65 years of age. 
‘‘(2) EFFECTIVE DATE OF TERMINATION.— 
‘‘(A) NOTICE.—The termination of a cov-
erage period under paragraph (1)(A)(i) shall 
take effect at the close of the month following 
for which the notice is filed. 
‘‘(B) NONPAYMENT
OF
PREMIUM.—The 
termination of a coverage period under para-
graph (1)(A)(ii) shall take effect on a date de-
termined under regulations, which may be de-
termined so as to provide a grace period in
which overdue premiums may be paid and cov-
erage continued. The grace period determined 
under the preceding sentence shall not exceed 
60 days; except that it may be extended for an 
additional 30 days in any case where the Sec-
retary determines that there was good cause for 
failure to pay the overdue premiums within 
such 60-day period. 
‘‘(C) AGE
OR
MEDICARE
ELIGIBILITY.— 
The termination of a coverage period under 
paragraph (1)(A)(iii) or (1)(B) shall take effect 
as of the first day of the month in which the 
individual attains 65 years of age or becomes 
entitled to benefits or enrolled in any other part 
of this title (other than by reason of this part). 
‘‘SEC. 1860E–3. PREMIUMS. 
‘‘(a) AMOUNT OF MONTHLY PREMIUMS.—The Sec-
retary shall, during September of each year (beginning 
with 2004), determine a monthly premium for individuals 
55 years of age or older, equal to 1⁄12 of the annual pre-
mium computed under subsection (b)(2), which shall apply 
with respect to coverage provided under this title for any 
month in the succeeding year. 
‘‘(b) ANNUAL PREMIUM.—
‘‘(1) NATIONAL, PER
CAPITA
AVERAGE.—The 
Secretary shall estimate the average, annual per 
capita amount that would be payable under this title 
with respect to individuals residing in the United 
States who meet the requirement of section 1860E– 
1(b)(1)(A) as if all such individuals were eligible for 
(and enrolled) under this title during the entire year 
(and assuming that section 1862(b)(2)(A)(i) did not 
apply). 
‘‘(2) ANNUAL PREMIUM.—The annual premium 
under this subsection for months in a year is equal 
to the average, annual per capita amount estimated 
under paragraph (1) for the year. 
‘‘SEC. 1860E–4. PAYMENT OF PREMIUMS. 
‘‘(a) PAYMENT OF MONTHLY PREMIUM.— 
‘‘(1) IN GENERAL.—The Secretary shall provide 
for payment and collection of the monthly premium, 
determined under section 1860E–3(a) for the age of 
the individual involved, in the same manner as for 
payment of monthly premiums under section 1840, 
except that, for purposes of applying this section, 
any reference in such section to the Federal Supple-
mentary Medical Insurance Trust Fund is deemed a 
reference to the Trust Fund established under sec-
tion 1860E–6.
‘‘(2) PERIOD OF PAYMENT.—In the case of an 
individual who participates in the program estab-
lished by this title, the monthly premium shall be 
payable for the period commencing with the first 
month of the individual’s coverage period and ending 
with the month in which the individual’s coverage 
under this title terminates. 
‘‘(b) APPLICATION OF CERTAIN PROVISIONS.—The 
provisions of section 1840 (other than subsection (h)) 
shall apply to premiums collected under this section in the 
same manner as they apply to premiums collected under 
part B, except that any reference in such section to the 
Federal Supplementary Medical Insurance Trust Fund is 
deemed a reference to the Trust Fund established under 
section 1860E–6. 
‘‘SEC. 1860E–5. PROVISIONS RELATING TO EMPLOYMENT- 
BASED RETIREE HEALTH COVERAGE. 
‘‘(a) IN GENERAL.—In the case of an individual who 
would be eligible to enroll under this part but for the pro-
vision of employment-based retiree health coverage by an 
employer to the individual, notwithstanding the limitation 
under section 1860E–1(b)(1)(C), the individual is eligible 
to enroll under this part. 
‘‘(b) MAINTENANCE OF EFFORT.—In the case of an 
employer that offers employment-based retiree health cov-
section 201(i)(1) and such amounts as may be de-
posited in, or appropriated to, such fund as provided 
in this title. 
‘‘(2) PREMIUMS.—Premiums collected under 
section 1860E–3 and payable under section 1860E– 
5(a)(2) shall be transferred to the Trust Fund. 
‘‘(b) INCORPORATION OF PROVISIONS.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
subsections (b) through (i) of section 1841 shall 
apply with respect to the Trust Fund and this title 
in the same manner as they apply with respect to 
the Federal Supplementary Medical Insurance Trust 
Fund and part B, respectively. 
‘‘(2) MISCELLANEOUS REFERENCES.—In apply-
ing provisions of section 1841 under paragraph 
(1)— 
‘‘(A) any reference in such section to ‘this 
part’ is construed to refer to this part E; 
‘‘(B) any reference in section 1841(h) to 
section 1840(d) and in section 1841(i) to sec-
tions 1840(b)(1) and 1842(g) are deemed ref-
erences to comparable authority exercised under 
this part; and 
‘‘(C) payments may be made under section 
1841(g) to the Trust Funds under sections
1817 and 1841 as reimbursement to such funds 
for payments they made for benefits provided 
under this part. 
‘‘SEC. 1860E–7. OVERSIGHT AND ACCOUNTABILITY. 
‘‘(a) THROUGH ANNUAL REPORTS OF TRUSTEES.— 
The Board of Trustees of the Medicare Early Access 
Trust Fund under section 1860E–6(b)(1) shall report on 
an annual basis to Congress concerning the status of the 
Trust Fund and the need for adjustments in the program 
under this part to maintain financial solvency of the pro-
gram under this part. 
‘‘(b) PERIODIC GAO REPORTS.—The Comptroller 
General of the United States shall periodically submit to 
Congress reports on the adequacy of the financing of cov-
erage provided under this part. The Comptroller General 
shall include in such report such recommendations for ad-
justments in such financing and coverage as the Comp-
troller General deems appropriate in order to maintain fi-
nancial solvency of the program under this part. 
‘‘SEC. 1860E–8. ADMINISTRATION AND MISCELLANEOUS. 
‘‘(a) TREATMENT FOR PURPOSES OF TITLE.—Ex-
cept as otherwise provided in this part— 
‘‘(1) individuals enrolled under this part shall 
be treated for purposes of this title as though the in-
dividual were entitled to benefits and enrolled under 
any part of this title; and 
‘‘(2) benefits described in section 1860E–1 
shall be payable under this title to such individuals 
in the same manner as if such individuals were so 
entitled and enrolled. 
‘‘(b) NOT TREATED AS MEDICARE PROGRAM FOR 
PURPOSES OF MEDICAID PROGRAM.—For purposes of ap-
plying title XIX (including the provision of medicare cost- 
sharing assistance under such title), an individual who is 
enrolled under this part shall not be treated as being enti-
tled to benefits under this title. 
‘‘(c) NOT TREATED AS MEDICARE PROGRAM FOR 
PURPOSES OF COBRA CONTINUATION PROVISIONS.—In 
applying a COBRA continuation provision (as defined in 
section 2791(d)(4) of the Public Health Service Act), any 
reference to an entitlement to benefits under this title 
shall not be construed to include entitlement to benefits 
under this title pursuant to the operation of this part.’’. 
(b) CONFORMING AMENDMENTS TO SOCIAL SECU-
RITY ACT.—(1) Section 201(i)(1) of the Social Security 
Act (42 U.S.C. 401(i)(1)) is amended by striking ‘‘or the 
Federal Supplementary Medical Insurance Trust Fund’’ 
and inserting ‘‘the Federal Supplementary Medical Insur-
ance Trust Fund, and the Medicare Early Access Trust 
Fund’’. 
(2) Section 201(g)(1)(A) of such Act (42 U.S.C. 
401(g)(1)(A)) is amended by striking ‘‘and the Federal 
Supplementary Medical Insurance Trust Fund established 
by title XVIII’’ and inserting ‘‘, the Federal Supple-
mentary Medical Insurance Trust Fund, and the Medicare 
Early Access Trust Fund established by title XVIII’’. 
(3) Section 1820(i) of such Act (42 U.S.C. 1395i– 
4(i)) is amended by striking ‘‘part D’’ and inserting ‘‘part 
F’’. 
(4) Section 1853 of such Act (42 U.S.C. 
1395w–23), as amended by section 222(d) of the 
Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Public Law 108–173), 
is amended by adding at the end the following new 
subsection: 
‘‘(k) ADJUSTMENT FOR EARLY ACCESS.—In apply-
ing this section with respect to individuals entitled to bene-
fits under part E, the Secretary shall provide for an appro-
priate adjustment in, for 2005, the Medicare+Choice capi-
tation rate, and for years beginning with 2006, the pay-
ment amount determined under this section or section 
1858, as may be appropriate to reflect differences between
the population served under such part and the population 
under parts A and B.’’. 
(5) Section 1860D–15(c)(1) of such Act, as 
added by section 101(a) of the Medicare Prescrip-
tion Drug, Improvement, and Modernization Act of 
2003 (Public Law 108–173), is amended by adding 
at the end the following new subparagraph: 
‘‘(E) ADJUSTMENT FOR EARLY ACCESS.— 
In applying this section with respect to individ-
uals entitled to benefits under part E, the Sec-
retary shall provide for an appropriate adjust-
ment in the payment amount determined under 
this section as may be appropriate to reflect dif-
ferences between the population served under 
such part and the population under parts A and 
B.’’. 
(c) OTHER CONFORMING.—(1) Section 602(2)(D)(ii) 
of the Employee Retirement Income Security Act of 1974 
(29 U.S.C. 1162(2)) is amended by inserting ‘‘(not includ-
ing an individual who is so entitled pursuant to enrollment 
under section 1860E–1)’’ after ‘‘Social Security Act’’. 
(2) Section 2202(2)(D)(ii) of the Public Health Serv-
ice Act (42 U.S.C. 300bb–2(2)(D)(ii)) is amended by in-
serting ‘‘(not including an individual who is so entitled
pursuant to enrollment under section 1860E–1)’’ after 
‘‘Social Security Act’’. 
(3) Section 4980B(f)(2)(B)(i)(V) of the Internal Rev-
enue Code of 1986 is amended by inserting ‘‘(not includ-
ing an individual who is so entitled pursuant to enrollment 
under section 1860E–1)’’ after ‘‘Social Security Act’’. 
Subtitle B—Refundable Tax Credit 
for Employee Costs of COBRA 
Coverage 
SEC. 211. REFUNDABLE TAX CREDIT FOR EMPLOYEE COSTS 
OF COBRA COVERAGE. 
(a) IN GENERAL.—Chapter 101 of the Internal Rev-
enue Code of 1986, as added by section 102, is amended 
by redesignating section 9905 as section 9906 and by in-
serting after section 9904 the following new section: 
‘‘SEC. 9905. EMPLOYEE COSTS OF COBRA COVERAGE. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed against the tax imposed by subtitle 
A an amount equal to 65 percent of the amount paid by 
the taxpayer for coverage of the taxpayer, his spouse, and 
dependents under a COBRA continuation provision (as de-
fined in section 9832(d)(1)). 
‘‘(b) SPECIAL RULES.—Rules similar to the rules of 
section 9904(c) shall apply for purposes of this section.’’. 
(b) CONFORMING AMENDMENTS.—
(1) Subsection (b) of section 9906 of such Code 
(as added by section 102 and redesignated by sub-
section (a)) is further amended by striking ‘‘or 
9904(a)’’ and inserting ‘‘9904(a), or 9905(a)’’. 
(2) The table of sections for chapter 101 of 
such Code is amended by striking the item relating 
to section 9905 and inserting the following new 
items: 
‘‘Sec. 9905. Employee costs of COBRA coverage. 
‘‘Sec. 9906. Special rules.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2004. 
Subtitle C—FamilyCare 
SEC. 221. RENAMING OF TITLE XXI PROGRAM. 
(a) IN GENERAL.—The heading of title XXI of the 
Social Security Act (42 U.S.C. 1397aa et seq.) is amended 
to read as follows: 
‘‘TITLE XXI—FAMILYCARE PROGRAM’’. 
(b) PROGRAM REFERENCES.—Any reference in any 
provision of Federal law or regulation to ‘‘SCHIP’’ or 
‘‘State children’s health insurance program’’ under title 
XXI of the Social Security Act shall be deemed a reference 
to the FamilyCare program under such title.
SEC. 222. FAMILYCARE COVERAGE OF PARENTS AND PREG-
NANT WOMEN UNDER THE MEDICAID PRO-
GRAM AND TITLE XXI. 
(a) INCENTIVES TO IMPLEMENT FAMILYCARE COV-
ERAGE.— 
(1) UNDER MEDICAID.— 
(A) ESTABLISHMENT OF NEW OPTIONAL 
ELIGIBILITY
CATEGORY.—Section 
1902(a)(10)(A)(ii) of the Social Security Act 
(42 U.S.C. 1396a(a)(10)(A)(ii)) is amended— 
(i) by striking ‘‘or’’ at the end of sub-
clause (XVII); 
(ii) by adding ‘‘or’’ at the end of sub-
clause (XVIII); and 
(iii) by adding at the end the fol-
lowing: 
‘‘(XIX) who are individuals de-
scribed in subsection (k)(1) (relating 
to parents of categorically eligible chil-
dren);’’. 
(B) PARENTS DESCRIBED.—Section 1902 
of the Social Security Act is further amended 
by inserting after subsection (j) the following: 
‘‘(k)(1)(A) Individuals described in this paragraph 
are individuals—
‘‘(i) who are the parents of an individual who 
is under 19 years of age (or such higher age as the 
State may have elected under section 1902(l)(1)(D)) 
and who is eligible for medical assistance under sub-
section (a)(10)(A); 
‘‘(ii) who are not otherwise eligible for medical 
assistance under such subsection or under a waiver 
approved under section 1115 or otherwise (except 
under 
section 
1931 
or 
under 
subsection 
(a)(10)(A)(ii)(XIX)); and 
‘‘(iii) whose family income or resources exceeds 
the effective income level or resource level applicable 
under the State plan under part A of title IV as in 
effect as of July 16, 1996, but does not exceed the 
highest effective income or resource level (if any) ap-
plicable to a child in the family under this title. 
‘‘(B) In establishing an income eligibility level for in-
dividuals described in this paragraph, a State may vary 
such level consistent with the various income levels estab-
lished under subsection (l)(2) in order to ensure, to the 
maximum extent possible, that such individuals shall be 
enrolled in the same program as their children. 
‘‘(C) An individual may not be treated as being de-
scribed in this paragraph unless, at the time of the individ-
ual’s enrollment under this title, the child referred to in
subparagraph (A)(i) of the individual is also enrolled 
under this title or otherwise insured. 
‘‘(D) In this subsection, the term ‘parent’ includes 
an individual treated as a caretaker for purposes of car-
rying out section 1931. 
‘‘(E) In this subsection, the term ‘effective income 
level’ means the income level expressed as a percent of 
the poverty line and considering applicable income dis-
regards. 
‘‘(2) The State shall provide for coverage of a parent 
described in paragraph (1) or section 2111 of a child who 
is covered under this title or title XXI under the same 
title as the title as such child is covered. In the case of 
a parent described in paragraph (1) who is also the parent 
of a child who is eligible for child health assistance under 
title XXI, the State may elect (on a uniform basis) to 
cover all such parents under section 2111 or under this 
title.’’. 
(C) ENHANCED MATCHING FUNDS AVAIL-
ABLE IF CERTAIN CONDITIONS MET.—Section 
1905 of the Social Security Act (42 U.S.C. 
1396d) is amended— 
(i) in the fourth sentence of sub-
section (b), by striking ‘‘or subsection
(u)(3)’’ 
and 
inserting 
‘‘, 
(u)(3), 
or 
(u)(4)(A)’’; and 
(ii) in subsection (u)— 
(I) by redesignating paragraph 
(4) as paragraph (6), and 
(II) by inserting after paragraph 
(3) the following: 
‘‘(4) For purposes of subsection (b) and section 
2105(a)(1): 
‘‘(A) FAMILYCARE
PARENTS.—The expendi-
tures described in this subparagraph are the expend-
itures described in the following clauses (i) and (ii): 
‘‘(i) PARENTS.—If the conditions described 
in clauses (iii) and (iv) are met, expenditures 
for medical assistance for parents described in 
section 1902(k)(1) and for parents who would 
be described in such section but for the fact 
that they are eligible for medical assistance 
under section 1931 or under a waiver approved 
under section 1115. 
‘‘(ii) CERTAIN PREGNANT WOMEN.—If the 
conditions described in clause (v) are met, ex-
penditures for medical assistance for pregnant 
women described in subsection (n) or under sec-
tion 1902(l)(1)(A) in a family the income of
which exceeds the effective income level applica-
ble under subsection (a)(10)(A)(i)(III) or 
(l)(2)(A) of section 1902 to a family of the size 
involved as of January 1, 2005. 
‘‘(iii) CONDITIONS RELATING TO ENSURING 
CHILDREN’S COVERAGE FOR ENHANCED MATCH 
FOR
PARENTS.—The conditions described in 
this clause are the following: 
‘‘(I) The State has a State child 
health plan under title XXI which (wheth-
er implemented under such title or under 
this title) has an effective income level for 
children that is at least 200 percent of the 
poverty line. 
‘‘(II) Such State child health plan 
does not limit the acceptance of applica-
tions, does not use a waiting list for chil-
dren who meet eligibility standards to 
qualify for assistance, and provides bene-
fits to all children in the State who apply 
for and meet eligibility standards. 
‘‘(III) Effective for determinations of 
eligibility made on or after the date that is 
1 year after the date of the enactment of 
this clause, the application and renewal
procedures for individuals under 19 years 
of age (or such higher age as the State has 
elected under section 1902(l)(1)(D)) for 
medical 
assistance 
under 
section 
1902(a)(10)(A) are not be more restrictive 
or burdensome than such procedures used 
for children with higher income under the 
State child health plan under title XXI. 
‘‘(iv) CONDITIONS RELATING TO MINIMUM 
COVERAGE
FOR
PARENTS
FOR
ENHANCED 
MATCH
FOR
PARENTS.—The conditions de-
scribed in this clause are the following: 
‘‘(I) The State does not apply an in-
come level for parents that is lower than 
the effective income level (expressed as a 
percent of the poverty line) that has been 
specified under the State plan under title 
XIX (including under a waiver authorized 
by 
the 
Secretary 
or 
under 
section 
1902(r)(2)), as of January 1, 2005, to be 
eligible for medical assistance as a parent 
under this title. 
‘‘(II) The State plans under this title 
and title XXI do not provide coverage for 
parents with higher family income without
covering parents with a lower family in-
come. 
‘‘(v) CONDITIONS FOR ENHANCED MATCH 
FOR CERTAIN PREGNANT WOMEN.—The condi-
tions described in this clause are the following: 
‘‘(I) The State has established an ef-
fective income eligibility level for pregnant 
women under subsection (a)(10)(A)(i)(III) 
or (l)(2)(A) of section 1902 that is at least 
185 percent of the poverty line. 
‘‘(II) The State plans under this title 
and title XXI do not provide coverage for 
pregnant women described in subpara-
graph (A)(ii) with higher family income 
without covering such pregnant women 
with a lower family income. 
‘‘(III) The State does not apply an in-
come level for pregnant women that is 
lower than the effective income level that 
has been specified under the State plan 
under 
subsection 
(a)(10)(A)(i)(III) 
or 
(l)(2)(A) of section 1902, as of January 1, 
2005, to be eligible for medical assistance 
as a pregnant woman.
‘‘(IV) The State satisfies the condi-
tions described in subclauses (I) and (II) 
of clause (iii). 
‘‘(vi) DEFINITIONS.—For purposes of this 
subsection: 
‘‘(I) The term ‘parent’ has the mean-
ing given such term for purposes of section 
1902(k)(1). 
‘‘(II) The term ‘poverty line’ has the 
meaning given such term in section 
2110(c)(5).’’. 
(D) APPROPRIATION FROM TITLE XXI AL-
LOTMENT FOR CERTAIN MEDICAID EXPANSION 
COSTS.—Section 2105(a) of the Social Security 
Act (42 U.S.C. 1397ee(a)) is amended— 
(i) in paragraph (1), by redesignating 
subparagraphs (B) through (D) as sub-
paragraphs (C) through (E), respectively, 
and by inserting after subparagraph (A) 
the following new subparagraph: 
‘‘(B) for medical assistance that is attrib-
utable to expenditures described in section 
1905(u)(4)(A);’’; and 
(ii) in paragraph (2), by adding at the 
end the following new subparagraph:
‘‘(E) Fifth, for expenditures for items de-
scribed in paragraph (1)(E).’’. 
(E) INCREASING ENHANCED FMAP TO 100 
PERCENT FOR FISCAL YEARS 2005 AND 2006 FOR 
COVERAGE
OF
PARENTS.—Section 2105(b) of 
such Act (42 U.S.C. 1397ee(b)) is amended by 
adding at the end the following new sentence: 
‘‘Notwithstanding the previous sentence, the 
‘enhanced FMAP’ shall be 100 percent with re-
spect to medical assistance under title XIX for 
expenditures 
described 
in 
section 
1905(u)(4)(A)(i), but only for such assistance 
furnished during fiscal year 2005 and fiscal 
year 2006.’’. 
(2) UNDER TITLE XXI.— 
(A) FAMILYCARE COVERAGE.—Title XXI 
of the Social Security Act (42 U.S.C. 1397aa et 
seq.) is amended by adding at the end the fol-
lowing: 
‘‘SEC. 2111. OPTIONAL FAMILYCARE COVERAGE OF PAR-
ENTS OF TARGETED LOW-INCOME CHILDREN. 
‘‘(a) OPTIONAL COVERAGE.—Notwithstanding any 
other provision of this title, a State may provide for cov-
erage, through an amendment to its State child health 
plan under section 2102, of parent health assistance for
targeted low-income parents, health care assistance for 
targeted low-income pregnant women, or both, in accord-
ance with this section, but only if— 
‘‘(1) with respect to the provision of parent 
health assistance, the State meets the conditions de-
scribed in clause (iii) of section 1905(u)(4)(A); 
‘‘(2) with respect to the provision of health care 
assistance for pregnant women, the State meets the 
conditions described in clause (iv) of section 
1905(u)(4)(A); and 
‘‘(3) in the case of parent health assistance for 
targeted low-income parents, the State elects to pro-
vide 
medical 
assistance 
under 
section 
1902(a)(10)(A)(ii)(XIX), under section 1931, or 
under a waiver under section 1115 to individuals de-
scribed in section 1902(k)(1)(A)(i) and elects an ef-
fective income level that, consistent with paragraphs 
(1)(B) and (2) of section 1902(k), ensures to the 
maximum extent possible, that such individuals shall 
be enrolled in the same program as their children if 
their children are eligible for coverage under title 
XIX (including under a waiver authorized by the 
Secretary or under section 1902(r)(2)). 
‘‘(b) DEFINITIONS.—For purposes of this title:
‘‘(1) PARENT HEALTH ASSISTANCE.—The term 
‘parent health assistance’ has the meaning given the 
term child health assistance in section 2110(a) as if 
any reference to targeted low-income children were 
a reference to targeted low-income parents. 
‘‘(2) PARENT.—The term ‘parent’ has the 
meaning given the term ‘caretaker relative’ for pur-
poses of carrying out section 1931. 
‘‘(3) HEALTH
CARE
ASSISTANCE
FOR
PREG-
NANT WOMEN.—The term ‘health care assistance for 
pregnant women’ has the meaning given the term 
child health assistance in section 2110(a) as if any 
reference to targeted low-income children were a ref-
erence to targeted low-income pregnant women. 
‘‘(4) TARGETED
LOW-INCOME
PARENT.—The 
term ‘targeted low-income parent’ has the meaning 
given the term targeted low-income child in section 
2110(b) as if the reference to a child were deemed 
a reference to a parent (as defined in paragraph (3)) 
of the child; except that in applying such section— 
‘‘(A) there shall be substituted for the in-
come level described in paragraph (1)(B)(ii)(I) 
the applicable income level in effect for a tar-
geted low-income child;
‘‘(B) in paragraph (3), January 1, 2005, 
shall be substituted for July 1, 1997; and 
‘‘(C) in paragraph (4), January 1, 2005, 
shall be substituted for March 31, 1997. 
‘‘(5) 
TARGETED
LOW-INCOME
PREGNANT 
WOMAN.—The term ‘targeted low-income pregnant 
woman’ has the meaning given the term targeted 
low-income child in section 2110(b) as if any ref-
erence to a child were a reference to a woman dur-
ing pregnancy and through the end of the month in 
which the 60-day period beginning on the last day 
of her pregnancy ends; except that in applying such 
section— 
‘‘(A) there shall be substituted for the in-
come level described in paragraph (1)(B)(ii)(I) 
the applicable income level in effect for a tar-
geted low-income child; 
‘‘(B) in paragraph (3), January 1, 2005, 
shall be substituted for July 1, 1997; and 
‘‘(C) in paragraph (4), January 1, 2005, 
shall be substituted for March 31, 1997. 
‘‘(c) 
REFERENCES
TO
TERMS
AND
SPECIAL 
RULES.—In the case of, and with respect to, a State pro-
viding for coverage of parent health assistance to targeted 
low-income parents or health care assistance to targeted
low-income pregnant women under subsection (a), the fol-
lowing special rules apply: 
‘‘(1) Any reference in this title (other than in 
subsection (b)) to a targeted low-income child is 
deemed to include a reference to a targeted low-in-
come parent or a targeted low-income pregnant 
woman (as applicable). 
‘‘(2) Any such reference to child health assist-
ance— 
‘‘(A) with respect to such parents is 
deemed a reference to parent health assistance; 
and 
‘‘(B) with respect to such pregnant women, 
is deemed a reference to health care assistance 
for pregnant women. 
‘‘(3) In applying section 2103(e)(3)(B) in the 
case of a family (consisting of a parent and one or 
more children) provided coverage under this section 
or a pregnant woman provided coverage under this 
section without covering other family members, the 
limitation on total annual aggregate cost-sharing 
shall be applied to such entire family or such preg-
nant woman, respectively. 
‘‘(4) In applying section 2110(b)(4), any ref-
erence to ‘section 1902(l)(2) or 1905(n)(2) (as se-
lected by a State)’ is deemed a reference to the ef-
fective income level applicable to parents under sec-
tion 1931 or under a waiver approved under section 
1115, or, in the case of a pregnant woman, the in-
come level established under section 1902(l)(2)(A). 
‘‘(5) In applying section 2102(b)(3)(B), any 
reference to children found through screening to be 
eligible for medical assistance under the State med-
icaid plan under title XIX is deemed a reference to 
parents and pregnant women.’’. 
(B) ADDITIONAL ALLOTMENT FOR STATES 
PROVIDING FAMILYCARE.— 
(i) IN GENERAL.—Section 2104 of the 
Social Security Act (42 U.S.C. 1397dd) is 
amended by inserting after subsection (c) 
the following: 
‘‘(d) ADDITIONAL ALLOTMENTS FOR STATE PRO-
VIDING FAMILYCARE.— 
‘‘(1) APPROPRIATION; TOTAL
ALLOTMENT.— 
For the purpose of providing additional allotments 
to States to provide FamilyCare coverage under sec-
tion 2111, there is appropriated, out of any money 
in the Treasury not otherwise appropriated— 
‘‘(A) for fiscal year 2005, $7,000,000,000; 
‘‘(B) for fiscal year 2006, $7,000,000,000;
‘‘(C) for fiscal year 2007, $3,000,000,000; 
‘‘(D) for fiscal year 2008, $3,000,000,000; 
‘‘(E) for fiscal year 2009, $6,000,000,000; 
‘‘(F) for fiscal year 2010, $7,000,000,000; 
‘‘(G) for fiscal year 2011, $8,000,000,000; 
‘‘(H) for fiscal year 2012, $9,000,000,000; 
and 
‘‘(I) for fiscal year 2013 and each fiscal 
year thereafter, the amount of the allotment 
provided under this paragraph for the preceding 
fiscal year increased by the percentage increase 
(if any) in the medical care expenditure cat-
egory of the Consumer Price Index for All 
Urban Consumers (United States city average). 
‘‘(2) STATE AND TERRITORIAL ALLOTMENTS.— 
‘‘(A) IN GENERAL.—In addition to the al-
lotments provided under subsections (b) and 
(c), subject to paragraphs (3) and (4), of the 
amount available for the additional allotments 
under paragraph (1) for a fiscal year, the Sec-
retary shall allot to each State with a State 
child health plan approved under this title— 
‘‘(i) in the case of such a State other 
than a commonwealth or territory de-
scribed in clause (ii), the same proportion
as the proportion of the State’s allotment 
under subsection (b) (determined without 
regard to subsection (f)) to 98.95 percent 
of the total amount of the allotments 
under such section for such States eligible 
for an allotment under this subparagraph 
for such fiscal year; and 
‘‘(ii) in the case of a commonwealth or 
territory described in subsection (c)(3), the 
same proportion as the proportion of the 
commonwealth’s or territory’s allotment 
under subsection (c) (determined without 
regard to subsection (f)) to 1.05 percent of 
the total amount of the allotments under 
such section for commonwealths and terri-
tories eligible for an allotment under this 
subparagraph for such fiscal year. 
‘‘(B) AVAILABILITY AND REDISTRIBUTION 
OF
UNUSED
ALLOTMENTS.—In applying sub-
sections (e) and (f) with respect to additional 
allotments made available under this subsection, 
the procedures established under such sub-
sections shall ensure such additional allotments 
are only made available to States which have 
elected to provide coverage under section 2111.
‘‘(3) USE OF ADDITIONAL ALLOTMENT.—Addi-
tional allotments provided under this subsection are 
not available for amounts expended before October 
1, 2004. Such amounts are available for amounts ex-
pended on or after such date for child health assist-
ance for targeted low-income children, as well as for 
parent health assistance for targeted low-income 
parents, and health care assistance for targeted low- 
income pregnant women. 
‘‘(4) REQUIRING ELECTION TO PROVIDE COV-
ERAGE.—No payments may be made to a State 
under this title from an allotment provided under 
this subsection unless the State has made an elec-
tion to provide parent health assistance for targeted 
low-income parents, or health care assistance for 
targeted low-income pregnant women.’’. 
(ii) 
CONFORMING
AMENDMENTS.— 
Section 2104 of the Social Security Act 
(42 U.S.C. 1397dd) is amended— 
(I) in subsection (a), by inserting 
‘‘subject to subsection (d),’’ after 
‘‘under this section,’’; 
(II) in subsection (b)(1), by in-
serting ‘‘and subsection (d)’’ after 
‘‘Subject to paragraph (4)’’; and
(III) in subsection (c)(1), by in-
serting ‘‘subject to subsection (d),’’ 
after ‘‘for a fiscal year,’’. 
(C) NO COST-SHARING FOR PREGNANCY- 
RELATED
BENEFITS.—Section 2103(e)(2) of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1397cc(e)(2)) is amended— 
(i) in the heading, by inserting ‘‘AND 
PREGNANCY-RELATED
SERVICES’’ 
after 
‘‘PREVENTIVE SERVICES’’; and 
(ii) by inserting before the period at 
the end the following: ‘‘and for pregnancy- 
related services’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection apply to items and services fur-
nished on or after October 1, 2004, whether or not 
regulations implementing such amendments have 
been issued. 
(b) RULES FOR IMPLEMENTATION BEGINNING WITH 
FISCAL YEAR 2006.— 
(1) EXPANSION
OF
AVAILABILITY
OF
EN-
HANCED
MATCH
UNDER
MEDICAID
FOR
PRE-CHIP 
EXPANSIONS.—Paragraph (4) of section 1905(u) of 
the Social Security Act (42 U.S.C. 1396d(u)), as in-
serted by subsection (a)(1)(C), is amended—
(A) by amending clause (ii) of subpara-
graph (A) to read as follows: 
‘‘(ii) CERTAIN
PREGNANT
WOMEN.—Ex-
penditures for medical assistance for pregnant 
women under section 1902(l)(1)(A) in a family 
the income of which exceeds the 133 percent of 
the income official poverty line, but only if the 
income 
level 
established 
under 
section 
1902(l)(2) (or under a Statewide waiver under 
section 1115) for pregnant women is 185 per-
cent of the income official poverty line.’’; and 
(B) by adding at the end the following: 
‘‘(B) CHILDREN
IN
FAMILIES
WITH
INCOME 
ABOVE
MEDICAID
MANDATORY
LEVEL
NOT
PRE-
VIOUSLY
DESCRIBED.—The expenditures described 
in this subparagraph are expenditures (other than 
expenditures described in paragraph (2) or (3)) for 
medical assistance made available to any child who 
is 
eligible 
for 
assistance 
under 
section 
1902(a)(10)(A) (other than under clause (i)) and 
the income of whose family exceeds the minimum in-
come level required under subsection 1902(l)(2) (or, 
if higher, the minimum level required under section 
1931 for that State) for a child of the age involved
(treating any child who is 19 or 20 years of age as 
being 18 years of age).’’. 
(2) OFFSET
OF
ADDITIONAL
EXPENDITURES 
FOR
ENHANCED
MATCH
FOR
PRE-CHIP
EXPAN-
SION.—Section 1905 of the Social Security Act (42 
U.S.C. 1396d) is amended— 
(A) in the fourth sentence of subsection 
(b), by inserting ‘‘(except in the case of expend-
itures described in subsection (u)(5))’’ after ‘‘do 
not exceed’’; 
(B) in subsection (u), by inserting after 
paragraph (4) (as inserted by subparagraph 
(C)), the following: 
‘‘(5) For purposes of the fourth sentence of sub-
section (b) and section 2105(a), the following payments 
under this title do not count against a State’s allotment 
under section 2104: 
‘‘(A) REGULAR FMAP FOR EXPENDITURES FOR 
PREGNANT WOMEN WITH INCOME ABOVE 133 PER-
CENT OF POVERTY.—The portion of the payments 
made for expenditures described in paragraph 
(4)(A)(ii) that represents the amount that would 
have been paid if the enhanced FMAP had not been 
substituted for the Federal medical assistance per-
centage.
‘‘(B) FAMILYCARE
PARENTS.—Payments for 
expenditures described in paragraph (4)(A)(i). 
‘‘(C) REGULAR FMAP FOR EXPENDITURES FOR 
CERTAIN
CHILDREN
IN
FAMILIES
WITH
INCOME 
ABOVE MEDICAID MANDATORY LEVEL.—The portion 
of the payments made for expenditures described in 
paragraph (4)(B) that represents the amount that 
would have been paid if the enhanced FMAP had 
not been substituted for the Federal medical assist-
ance percentage.’’. 
(B) CONFORMING
AMENDMENTS.—Sub-
paragraph (B) of section 2105(a)(1) of the So-
cial Security Act, as amended by subsection 
(a)(1)(D), is amended to read as follows: 
‘‘(B) CERTAIN FAMILYCARE PARENTS AND 
OTHERS.—Expenditures for medical assistance 
that is attributable to expenditures described in 
section 1905(u)(4), except as provided in sec-
tion 1905(u)(5).’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection apply as of October 1, 2005, to 
fiscal years beginning on or after such date and to 
expenditures under the State plan on and after such 
date, whether or not regulations implementing such 
amendments have been issued.
(c) MAKING TITLE XXI BASE ALLOTMENTS PERMA-
NENT.—Section 2104(a) of the Social Security Act (42 
U.S.C. 1397dd(a)) is amended— 
(1) by striking ‘‘and’’ at the end of paragraph 
(9); 
(2) by striking the period at the end of para-
graph (10) and inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(11) for fiscal year 2008 and each fiscal year 
thereafter, the amount of the allotment provided 
under this subsection for the preceding fiscal year 
increased by the percentage increase (if any) in the 
medical care expenditure category of the Consumer 
Price Index for All Urban Consumers (United States 
city average).’’. 
(d) GAO STUDY.— 
(1) STUDY.—The Comptroller General of the 
United States shall conduct a study regarding fund-
ing under title XXI of the Social Security Act that 
examines— 
(A) the adequacy of overall funding under 
such title; 
(B) the formula for determining allotments 
and for redistribution of unspent funds under 
such title; and
(C) the effect of waiting lists and caps on 
enrollment under such title. 
(2) REPORT.—Not later than July 1, 2006, the 
Comptroller General shall submit a report on the 
study conducted under paragraph (1). Such report 
shall include recommendations regarding a better 
mechanism for determining State allotments and re-
distribution of unspent funds under such title in 
order to ensure all eligible families in need can ac-
cess coverage through such title. 
(e) CONFORMING AMENDMENTS.— 
(1) 
ELIGIBILITY
CATEGORIES.—Section 
1905(a) of the Social Security Act (42 U.S.C. 
1396d(a)) is amended, in the matter before para-
graph (1)— 
(A) by striking ‘‘or’’ at the end of clause 
(xii); 
(B) by inserting ‘‘or’’ at the end of clause 
(xiii); and 
(C) by inserting after clause (xiii) the fol-
lowing: 
‘‘(xiv) who are parents described (or treated as 
if described) in section 1902(k)(1),’’.
(2) INCOME LIMITATIONS.—Section 1903(f)(4) 
of the Social Security Act (42 U.S.C. 1396b(f)(4)) 
is amended— 
(A) effective October 1, 2005, by inserting 
‘‘1902(a)(10)(A)(i)(VIII),’’ 
after 
‘‘1902(a)(10)(A)(i)(VII),’’; and 
(B) 
by 
inserting 
‘‘1902(a)(10)(A)(ii)(XIX),’’ 
after 
‘‘1902(a)(10)(A)(ii)(XVIII),’’. 
(3) CONFORMING
AMENDMENT
RELATING
TO 
NO WAITING PERIOD FOR PREGNANT WOMEN.—Sec-
tion 2102(b)(1)(B) of the Social Security Act (42 
U.S.C. 1397bb(b)(1)(B)) is amended— 
(A) by striking ‘‘, and’’ at the end of 
clause (i) and inserting a semicolon; 
(B) by striking the period at the end of 
clause (ii) and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(iii) may not apply a waiting period 
(including a waiting period to carry out 
paragraph (3)(C)) in the case of a targeted 
low-income parent who is pregnant.’’.
SEC. 223. AUTOMATIC ENROLLMENT OF CHILDREN BORN 
TO TITLE XXI PARENTS. 
Section 2102(b)(1) of the Social Security Act (42 
U.S.C. 1397bb(b)(1)) is amended by adding at the end 
the following: 
‘‘(C) AUTOMATIC
ELIGIBILITY
OF
CHIL-
DREN
BORN
TO
A
PARENT
BEING
PROVIDED 
FAMILYCARE.—Such eligibility standards shall 
provide for automatic coverage of a child born 
to an individual who is provided assistance 
under this title in the same manner as medical 
assistance would be provided under section 
1902(e)(4) to a child described in such sec-
tion.’’. 
SEC. 224. ALLOWING STATES TO SIMPLIFY RULES FOR FAM-
ILIES. 
(a) PRESUMPTIVE ELIGIBILITY.— 
(1) APPLICATION TO PRESUMPTIVE ELIGIBILITY 
FOR PREGNANT WOMEN UNDER MEDICAID.—Section 
1920(b) of the Social Security Act (42 U.S.C. 
1396r–1(b)) is amended by adding at the end after 
and below paragraph (2) the following flush sen-
tence: 
‘‘The term ‘qualified provider’ includes a qualified entity 
as defined in section 1920A(b)(3).’’.
(2) OPTIONAL APPLICATION OF PRESUMPTIVE 
ELIGIBILITY
PROVISIONS
TO
PARENTS.—Section 
1920A of the Social Security Act (42 U.S.C. 1396r– 
1a) is amended by adding at the end the following: 
‘‘(e) A State may elect to apply the previous provi-
sions of this section to provide for a period of presumptive 
eligibility for medical assistance for a parent of a child 
with respect to whom such a period is provided under this 
section.’’. 
(3) APPLICATION UNDER TITLE XXI.—Section 
2107(e)(1)(D) of the Social Security Act (42 U.S.C. 
1397gg(e)(1)) is amended to read as follows: 
‘‘(D) Sections 1920 and 1920A (relating to 
presumptive eligibility).’’. 
(b) 12-MONTHS CONTINUOUS ELIGIBILITY.— 
(1) MEDICAID.—Section 1902(e)(12) of the So-
cial Security Act (42 U.S.C. 1396a(e)(12)) is 
amended— 
(A) by striking ‘‘At the option of the State, 
the plan may’’ and inserting ‘‘The plan shall’’; 
(B) by striking ‘‘an age specified by the 
State (not to exceed 19 years of age)’’ and in-
serting ‘‘19 years of age (or such higher age as 
the 
State 
has 
elected 
under 
subsection 
(l)(1)(D)) or, at the option of the State, who is
eligible for medical assistance as the parent of 
such a child’’; and 
(C) in subparagraph (A), by striking ‘‘a 
period (not to exceed 12 months) ’’ and insert-
ing ‘‘the 12-month period beginning on the 
date’’. 
(2) TITLE XXI.—Section 2102(b)(2) of such 
Act (42 U.S.C. 1397bb(b)(2)) is amended by adding 
at the end the following: ‘‘Such methods shall pro-
vide continuous eligibility for children under this 
title in a manner that is no less generous than the 
12-months continuous eligibility provided under sec-
tion 1902(e)(12) for children described in such sec-
tion under title XIX. If a State has elected to apply 
section 1902(e)(12) to parents, such methods may 
provide continuous eligibility for parents under this 
title in a manner that is no less generous than the 
12-months continuous eligibility provided under such 
section for parents described in such section under 
title XIX.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall take effect on July 1, 2005, 
whether or not regulations implementing such 
amendments have been issued.
(c) PROVISION OF MEDICAID AND CHIP APPLICA-
TIONS AND INFORMATION UNDER THE SCHOOL LUNCH 
PROGRAM.—Section 9(b)(2)(B) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1758(b)(2)(B)) is 
amended— 
(1) by striking ‘‘(B) Applications’’ and inserting 
‘‘(B)(i) Applications’’; and 
(2) by adding at the end the following: 
‘‘(ii)(I) Applications for free and reduced price 
lunches that are distributed pursuant to clause (i) to par-
ents or guardians of children in attendance at schools par-
ticipating in the school lunch program under this Act shall 
also contain information on the availability of medical as-
sistance under title XIX of the Social Security Act (42 
U.S.C. 1396 et seq.) and of child health and FamilyCare 
assistance under title XXI of such Act, including informa-
tion on how to obtain an application for assistance under 
such programs. 
‘‘(II) Information on the programs referred to in sub-
clause (I) shall be provided on a form separate from the 
application form for free and reduced price lunches under 
clause (i).’’.
SEC. 225. REVISION AND SIMPLIFICATION OF THE TRANSI-
TIONAL 
MEDICAL 
ASSISTANCE 
PROGRAM 
(TMA). 
(a) MAKING REPORTING REQUIREMENTS OPTIONAL; 
OPTION OF EXTENDED ELIGIBILITY.— 
(1) OPTION FOR MAKING REPORTING REQUIRE-
MENTS OPTIONAL.—Section 1925(b) of the Social 
Security Act (42 U.S.C. 1396r–6(b)) is amended— 
(A) in paragraph (1), by inserting ‘‘, at the 
option of a State,’’ after ‘‘and which’’; 
(B) in paragraph (2)(A), by inserting 
‘‘Subject to subparagraph (C)—’’ after ‘‘(A) 
NOTICES.—’’; 
(C) in paragraph (2)(B), by inserting 
‘‘Subject to subparagraph (C)—’’ after ‘‘(B) 
REPORTING REQUIREMENTS.—’’; 
(D) by adding at the end the following new 
subparagraph: 
‘‘(C) STATE
OPTION
TO
WAIVE
NOTICE 
AND
REPORTING
REQUIREMENTS.—A State 
may waive some or all of the reporting require-
ments under clauses (i) and (ii) of subpara-
graph (B). Insofar as it waives such a reporting 
requirement, the State need not provide for a 
notice under subparagraph (A) relating to such 
requirement.’’; and
(E) in paragraph (3)(A)(iii), by inserting 
‘‘the State has not waived under paragraph 
(2)(C) the reporting requirement with respect 
to such month under paragraph (2)(B) and if’’ 
after ‘‘6-month period if’’. 
(2) STATE
OPTION
TO
EXTEND
ELIGIBILITY 
FOR LOW-INCOME INDIVIDUALS FOR UP TO 12 ADDI-
TIONAL
MONTHS.—Section 1925 of such Act (42 
U.S.C. 1396r–6) is further amended— 
(A) 
by 
redesignating 
subsections 
(c) 
through (f) as subsections (d) through (g); and 
(B) by inserting after subsection (b) the 
following new subsection: 
‘‘(c) STATE OPTION OF UP TO 12 MONTHS OF ADDI-
TIONAL ELIGIBILITY.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this title, each State plan approved 
under this title may provide, at the option of the 
State, that the State shall offer to each family which 
received assistance during the entire 6-month period 
under subsection (b) and which meets the applicable 
requirement of paragraph (2), in the last month of 
the period the option of extending coverage under 
this subsection for the succeeding period not to ex-
ceed 12 months.
‘‘(2) INCOME RESTRICTION.—The option under 
paragraph (1) shall not be made available to a fam-
ily for a succeeding period unless the State deter-
mines that the family’s average gross monthly earn-
ings (less such costs for such child care as is nec-
essary for the employment of the caretaker relative) 
as of the end of the 6-month period under sub-
section (b) does not exceed 185 percent of the offi-
cial poverty line (as defined by the Office of Man-
agement and Budget, and revised annually in ac-
cordance with section 673(2) of the Omnibus Budget 
Reconciliation Act of 1981) applicable to a family of 
the size involved. 
‘‘(3) APPLICATION
OF
EXTENSION
RULES.— 
The provisions of paragraphs (2), (3), (4), and (5) 
of subsection (b) shall apply to the extension pro-
vided under this subsection in the same manner as 
they apply to the extension provided under sub-
section (b)(1), except that for purposes of this sub-
section— 
‘‘(A) any reference to a 6-month period 
under subsection (b)(1) is deemed a reference 
to the extension period provided under para-
graph (1) and any deadlines for any notices or 
reporting and the premium payment periods
shall be modified to correspond to the appro-
priate calendar quarters of coverage provided 
under this subsection; and 
‘‘(B) any reference to a provision of sub-
section (a) or (b) is deemed a reference to the 
corresponding provision of subsection (b) or of 
this subsection, respectively.’’. 
(b) STATE OPTION TO WAIVE RECEIPT OF MED-
ICAID FOR 3 OF PREVIOUS 6 MONTHS TO QUALIFY FOR 
TMA.—Section 1925(a)(1) of such Act (42 U.S.C. 1396r– 
6(a)(1)) is amended by adding at the end the following: 
‘‘A State may, at its option, also apply the previous sen-
tence in the case of a family that was receiving such aid 
for fewer than 3 months, or that had applied for and was 
eligible for such aid for fewer than 3 months, during the 
6 immediately preceding months described in such sen-
tence.’’. 
(c) ELIMINATION OF SUNSET FOR TMA.— 
(1) Subsection (g) of section 1925 of such Act 
(42 U.S.C. 1396r–6), as redesignated under sub-
section (a)(2), is repealed. 
(2) Section 1902(e)(1) of such Act (42 U.S.C. 
1396a(e)(1)) 
is 
amended 
by 
striking 
‘‘(A) 
Nothwithstanding’’ and all that follows through
‘‘During such period, for’’ in subparagraph (B) and 
inserting ‘‘For’’. 
(d) CMS REPORT ON ENROLLMENT AND PARTICIPA-
TION RATES UNDER TMA.—Section 1925 of such Act, 
as amended by subsections (a)(2) and (c)(1), is amended 
by adding at the end the following new subsection: 
‘‘(g) ADDITIONAL PROVISIONS.— 
‘‘(1) COLLECTION AND REPORTING OF PARTICI-
PATION INFORMATION.—Each State shall— 
‘‘(A) collect and submit to the Secretary, 
in a format specified by the Secretary, informa-
tion on average monthly enrollment and average 
monthly participation rates for adults and chil-
dren under this section; and 
‘‘(B) make such information publicly avail-
able. 
Such information shall be submitted under subpara-
graph (A) at the same time and frequency in which 
other enrollment information under this title is sub-
mitted to the Secretary. Using such information, the 
Secretary shall submit to Congress annual reports 
concerning such rates.’’. 
(e) COORDINATION OF WORK.—Section 1925(g) of 
such Act, as added by subsection (d), is amended by add-
ing at the end the following new paragraph:
‘‘(2) COORDINATION
WITH
ADMINISTRATION 
FOR CHILDREN AND FAMILIES.—The Administrator 
of the Centers for Medicare & Medicaid Services, in 
carrying out this section, shall work with the Assist-
ant Secretary for the Administration for Children 
and Families to develop guidance or other technical 
assistance for States regarding best practices in 
guaranteeing access to transitional medical assist-
ance under this section.’’. 
(f) ELIMINATION
OF
TMA REQUIREMENT
FOR 
STATES THAT EXTEND COVERAGE TO CHILDREN AND 
PARENTS THROUGH 185 PERCENT OF POVERTY.— 
(1) IN GENERAL.—Section 1925 of such Act is 
further amended by adding at the end the following 
new subsection: 
‘‘(h) PROVISIONS OPTIONAL FOR STATES THAT EX-
TEND COVERAGE TO CHILDREN AND PARENTS THROUGH 
185 PERCENT OF POVERTY.—A State may (but is not re-
quired to) meet the requirements of subsections (a) and 
(b) if it provides for medical assistance under section 1931 
to families (including both children and caretaker rel-
atives) the average gross monthly earning of which (less 
such costs for such child care as is necessary for the em-
ployment of a caretaker relative) is at or below a level that 
is at least 185 percent of the official poverty line (as de-
fined by the Office of Management and Budget, and re-
vised annually in accordance with section 673(2) of the 
Omnibus Budget Reconciliation Act of 1981) applicable 
to a family of the size involved.’’. 
(2) CONFORMING AMENDMENTS.—Such section 
is further amended, in subsections (a)(1) and (b)(1), 
by inserting ‘‘, but subject to subsection (h),’’ after 
‘‘Notwithstanding any other provision of this title,’’ 
each place it appears. 
(g) EXTENDING USE OF OUTSTATIONED WORKERS 
TO ACCEPT APPLICATIONS FOR TRANSITIONAL MEDICAL 
ASSISTANCE.—Section 1902(a)(55) of such Act (42 
U.S.C. 1396a(a)(55)) is amended by inserting ‘‘and under 
section 1931’’ after ‘‘(a)(10)(A)(ii)(IX)’’. 
(h) EFFECTIVE DATES.—(1) Except as provided in 
this subsection, the amendments made by this section shall 
apply to calendar quarters beginning on or after the date 
of the enactment of this Act, without regard to whether 
or not final regulations to carry out such amendments 
have been promulgated by such date. 
(2) In the case of a State plan for medical assistance 
under title XIX of the Social Security Act which the Sec-
retary of Health and Human Services determines requires 
State legislation (other than legislation appropriating 
funds) in order for the plan to meet the additional require-
ments imposed by the amendments made by this section, 
the State plan shall not be regarded as failing to comply 
with the requirements of such title solely on the basis of 
its failure to meet these additional requirements before the 
first day of the first calendar quarter beginning after the 
close of the first regular session of the State legislature 
that begins after the date of the enactment of this Act. 
For purposes of the previous sentence, in the case of a 
State that has a 2-year legislative session, each year of 
such session shall be deemed to be a separate regular ses-
sion of the State legislature. 
SEC. 226. LIMITATIONS ON CONFLICTS OF INTEREST. 
(a) LIMITATION
ON CONFLICTS
OF INTEREST
IN 
MARKETING ACTIVITIES.— 
(1) TITLE XXI.—Section 2105(c) of the Social 
Security Act (42 U.S.C. 300aa–5(c)) is amended by 
adding at the end the following: 
‘‘(8) LIMITATION ON EXPENDITURES FOR MAR-
KETING ACTIVITIES.—Amounts expended by a State 
for the use of an administrative vendor in marketing 
health benefits coverage to low-income children 
under this title shall not be considered, for purposes 
of subsection (a)(2)(D), to be reasonable costs to ad-
minister the plan unless the following conditions are 
met with respect to the vendor:
‘‘(A) The vendor is independent of any en-
tity offering the coverage in the same area of 
the State in which the vendor is conducting 
marketing activities. 
‘‘(B) No person who is an owner, em-
ployee, consultant, or has a contract with the 
vendor either has any direct or indirect finan-
cial interest with such an entity or has been ex-
cluded from participation in the program under 
this title or title XVIII or XIX or debarred by 
any Federal agency, or subject to a civil money 
penalty under this Act.’’. 
(b) PROHIBITION OF AFFILIATION WITH DEBARRED 
INDIVIDUALS.— 
(1) MEDICAID.—Section 1903(i) of the Social 
Security Act (42 U.S.C. 1396b(i))is amended— 
(A) by striking the period at the end of 
paragraph (20) and inserting ‘‘; or’’; and 
(B) by inserting after paragraph (20) the 
following: 
‘‘(21) with respect to any amounts expended for 
an entity that receives payments under the plan un-
less— 
‘‘(A) no person with an ownership or con-
trol interest (as defined in section 1124(a)(3))
in the entity is a person that is debarred, sus-
pended, or otherwise excluded from partici-
pating in procurement or non-procurement ac-
tivities under the Federal Acquisition Regula-
tion; and 
‘‘(B) such entity has not entered into an 
employment, consulting, or other agreement for 
the provision of items or services that are mate-
rial to such entity’s obligations under the plan 
with a person described in subparagraph (A).’’. 
(2) TITLE XXI.—Section 2107(e)(1) of the So-
cial Security Act (42 U.S.C. 1397gg(e)(1)) is 
amended 
(A) in subparagraph (B), by striking ‘‘and 
(17)’’ and inserting ‘‘(17), and (21)’’; and 
(B) by adding at the end the following: 
‘‘(E) Section 1902(a)(67) (relating to pro-
hibition of affiliation with debarred individ-
uals).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenditures made on or after 
July 1, 2005, whether or not regulations implementing 
such amendments have been issued.
SEC. 227. INCREASE IN CHIP ALLOTMENT FOR EACH OF 
FISCAL YEARS 2002 THROUGH 2004. 
Effective as if included in the enactment of the Bal-
anced Budget Act of 1997, paragraphs (5), (6), and (7) 
of section 2104(a) of the Social Security Act (42 U.S.C. 
1397dd(a)) are amended by striking ‘‘$3,150,000,000’’ 
each place it appears and inserting ‘‘$4,150,000,000’’. 
SEC. 228. DEMONSTRATION PROGRAMS TO IMPROVE MED-
ICAID AND CHIP OUTREACH TO HOMELESS 
INDIVIDUALS AND FAMILIES. 
(a) AUTHORITY.—The Secretary of Health and 
Human Services may award demonstration grants to not 
more than 7 States (or other qualified entities) to conduct 
innovative programs that are designed to improve out-
reach to homeless individuals and families under the pro-
grams described in subsection (b) with respect to enroll-
ment of such individuals and families under such pro-
grams and the provision of services (and coordinating the 
provision of such services) under such programs. 
(b) PROGRAMS FOR HOMELESS DESCRIBED.—The 
programs described in this subsection are as follows: 
(1) MEDICAID.—The program under title XIX 
of the Social Security Act (42 U.S.C. 1396 et seq.). 
(2) CHIP.—The program under title XXI of 
the Social Security Act (42 U.S.C. 1397aa et seq.).
(3) TANF.—The program under part of A of 
title IV of the Social Security Act (42 U.S.C. 601 
et seq.). 
(4) SAMHSA BLOCK GRANTS.—The program 
of grants under part B of title XIX of the Public 
Health Service Act (42 U.S.C. 300x–1 et seq.). 
(5) FOOD
STAMP
PROGRAM.—The program 
under the Food Stamp Act of 1977 (7 U.S.C. 2011 
et seq.). 
(6) WORKFORCE INVESTMENT ACT.—The pro-
gram under the Workforce Investment Act of 1999 
(29 U.S.C. 2801 et seq.). 
(7) WELFARE-TO-WORK.—The welfare-to-work 
program under section 403(a)(5) of the Social Secu-
rity Act (42 U.S.C. 603(a)(5)). 
(8) OTHER PROGRAMS.—Other public and pri-
vate benefit programs that serve low-income individ-
uals. 
(c) APPROPRIATIONS.—For the purposes of carrying 
out this section, there is appropriated for fiscal year 2005, 
out of any funds in the Treasury not otherwise appro-
priated, $10,000,000, to remain available until expended. 
SEC. 229. ADDITIONAL CHIP REVISIONS. 
(a) LIMITING COST-SHARING TO 2.5 PERCENT FOR 
FAMILIES WITH INCOME BELOW 150 PERCENT OF POV-
ERTY.—Section 2103(e)(3)(A) of the Social Security Act 
(42 U.S.C. 1397cc(e)(3)(A)) is amended— 
(1) by striking ‘‘and’’ at the end of clause (i); 
(2) by striking the period at the end of clause 
(ii) and inserting ‘‘; and’’; and 
(3) by adding at the end the following new 
clause: 
‘‘(iii) total annual aggregate cost- 
sharing described in clauses (i) and (ii) 
with respect to all such targeted low-in-
come children in a family under this title 
that exceeds 2.5 percent of such family’s 
income for the year involved.’’. 
(b) EMPLOYER COVERAGE WAIVER CHANGES.—Sec-
tion 2105(c)(3) of such Act (42 U.S.C. 1397ee(c)(3)) is 
amended— 
(1) by redesignating subparagraphs (A) and 
(B) as clauses (i) and (ii) and indenting appro-
priately; 
(2) by designating the matter beginning with 
‘‘Payment may be made’’ as a subparagraph (A) 
with the heading ‘‘IN GENERAL’’ and indenting ap-
propriately; and 
(3) by adding at the end the following new sub-
paragraph:
‘‘(B) APPLICATION OF REQUIREMENTS.— 
In carrying out subparagraph (A)— 
‘‘(i) in determining cost-effectiveness, 
the Secretary shall measure against family 
coverage costs to the extent that a State 
has expanded coverage to parents pursuant 
to section 2111; 
‘‘(ii) subject to clause (iii), the State 
shall provide satisfactory assurances that 
the minimum benefits and cost-sharing 
protections established under this title are 
provided, either through the coverage 
under subparagraph (A) or as a supple-
ment to such coverage; and 
‘‘(iii) coverage under such subpara-
graph shall not be considered to violate 
clause (ii) because it does not comply with 
requirements relating to reviews of health 
service decisions if the enrollee involved is 
provided the option of being provided bene-
fits directly under this title.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section apply as of January 1, 2005, whether or not 
regulations implementing such amendments have been 
issued.
SEC. 230. INCREASED FEDERAL REIMBURSEMENT FOR 
LANGUAGE SERVICES UNDER THE MEDICAID 
PROGRAM AND TITLE XXI. 
(a) MEDICAID.—Section 1903(a)(3) of the Social Se-
curity Act (42 U.S.C. 1396b(a)(3)) is amended— 
(1) in subparagraph (D), by striking ‘‘plus’’ at 
the end and inserting ‘‘and’’; and 
(2) by adding at the end the following: 
‘‘(E) 90 percent of the sums expended with 
respect to costs incurred during such quarter as 
are attributable to the provision of language 
services, including oral interpretation, trans-
lations of written materials, and other language 
services, for individuals with limited English 
proficiency who apply for, or receive, medical 
assistance under the State plan; plus’’. 
(b) SCHIP.—Section 2105(a)(1) of the Social Secu-
rity Act (42 U.S.C.1397ee(a)) is amended— 
(1) in the matter preceding subparagraph (A), 
by inserting ‘‘or, in the case of expenditures de-
scribed in subparagraph (D)(iv), 90 percent’’ after 
‘‘enhanced FMAP’’; and 
(2) in subparagraph (D)— 
(A) in clause (iii), by striking ‘‘and’’ at the 
end;
(B) be redesignating clause (iv) as clause 
(v); and 
(C) by inserting after clause (iii) the fol-
lowing: 
‘‘(iv) for expenditures attributable to 
the provision of language services, includ-
ing oral interpretation, translations of 
written materials, and other language serv-
ices, for individuals with limited English 
proficiency who apply for, or receive, child 
health assistance under the plan; and’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section take effect on January 1, 2005. 
TITLE 
III—NATIONAL 
CENTER 
FOR 
EVIDENCE-BASED 
HEALTHCARE PRACTICES 
SEC. 301. ESTABLISHMENT OF CENTER. 
Part E of title IV of the Public Health Service Act 
(42 U.S.C. 287 et seq.) is amended by adding at the end 
the following subpart: 
‘‘Subpart 7—National Center for Evidence-Based 
Healthcare Practices 
‘‘SEC. 485J. PURPOSE OF CENTER. 
‘‘(a) IN GENERAL.—The general purpose of the Na-
tional Center for Evidence-Based Healthcare Practices (in
this subpart referred to as the ‘Center’) is the establish-
ment of national standards for healthcare practices that 
are based on scientific evidence developed through the con-
duct of research and the collection of data (in this subpart 
referred to as ‘evidence-based practices’). 
‘‘(b) CERTAIN DUTIES.— With respect to evidence- 
based practices established under subsection (a), the Di-
rector of the Center— 
‘‘(1) shall disseminate the practices and provide 
general information on the practices to the public 
and health professionals; 
‘‘(2) may conduct and support programs for 
training health professionals with respect to the 
practices; and 
‘‘(3) may provide to healthcare entities tech-
nical assistance regarding the practices. 
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—For the 
purpose of carrying out this section, there are authorized 
to be appropriated such sums as may be necessary for 
each of the fiscal years 2005 through 2009.’’ 
Æ