dividual in a family is not eligible for child health 
assistance under this title if the individual’s family 
has net assets (including the equity interest in any 
home) that exceeds $500,000 or unless there is pro-
vided a document (in such a form and manner as 
the Secretary shall specify) signed under penalty of 
perjury by an applicant for child health assistance 
on behalf of the individual that the net assets of the 
individual’s family (including the equity interest in 
the any home) does not exceed $500,000. The Sec-
retary may increase the dollar amount specified in 
the previous sentence from year to year beginning 
with 2013 based on the percentage increase in the 
consumer price index for all urban consumers (all 
items; United States city average), rounded to the 
nearest $1,000.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to eligibility determinations and 
redeterminations made on or after April 1, 2008. 
SEC. 5. CLARIFICATION OF STATE AUTHORITIES. 
Section 2102 of the Social Security Act (42 U.S.C. 
1397bb) is amended by adding at the end the following 
new subsection: 
‘‘(d) CLARIFICATION
OF STATE AUTHORITIES.— 
Nothing in this title shall be construed as preventing a 
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State, under its child health plan, from doing any of the 
following: 
‘‘(1) USE OF WAITING PERIODS TO PREVENT 
CROWD OUT.—From using waiting periods and other 
tools to prevent crowding out private-sector insur-
ance coverage. 
‘‘(2) 
USE
OF
PRIVATE
PROVIDERS
AND 
PLANS.—From cooperating or contracting with pri-
vate sector providers and plans in order to provide 
care to targeted low-income children. 
‘‘(3) USE OF STATE FUNDS FOR INELIGIBLE 
INDIVIDUALS.—From providing medical benefits for 
individuals who are not targeted low-income children 
with State funds.’’. 
SEC. 6. EASING ADMINISTRATIVE BARRIERS TO STATE CO-
OPERATION 
WITH 
EMPLOYER-SPONSORED 
INSURANCE COVERAGE. 
(a) REQUIRING SOME COVERAGE FOR EMPLOYER- 
SPONSORED INSURANCE.— 
(1) IN GENERAL.—Section 2102(a) of the So-
cial Security Act (42 U.S.C. 1397b(a)), as amended 
by section 2(a), is amended— 
(A) in paragraph (7), by striking ‘‘and’’ at 
the end; 
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(B) in paragraph (8), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(9) effective for plan years beginning on or 
after October 1, 2008, how the plan will provide for 
child health assistance with respect to targeted low- 
income children covered under a group health 
plan.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply beginning with fiscal 
year 2009. 
(b) FEDERAL FINANCIAL PARTICIPATION FOR EM-
PLOYER-SPONSORED INSURANCE.—Section 2105 of such 
Act (42 U.S.C. 1397d) is amended— 
(1) in subsection (a)(1)(C), by inserting before 
the semicolon at the end the following: ‘‘and, subject 
to paragraph (3)(C), in the form of payment of the 
premiums for coverage under a group health plan 
that includes coverage of targeted low-income chil-
dren and benefits supplemental to such coverage’’; 
and 
(2) paragraph (3) of subsection (c) is amended 
to read as follows: 
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‘‘(3) PURCHASE OF EMPLOYER-SPONSORED IN-
SURANCE.— 
‘‘(A) IN
GENERAL.—Payment may be 
made to a State under subsection (a)(1)(C), 
subject to the provisions of this paragraph, for 
the purchase of family coverage under a group 
health plan that includes coverage of targeted 
low-income children unless such coverage would 
otherwise substitute for coverage that would be 
provided to such children but for the purchase 
of family coverage. 
‘‘(B) WAIVER OF CERTAIN PROVISIONS.— 
With respect to coverage described in subpara-
graph (A)— 
‘‘(i) notwithstanding section 2102, no 
minimum benefits requirement (other than 
those otherwise applicable with respect to 
services referred to in section 2102(a)(7)) 
under this title shall apply; and 
‘‘(ii) no limitation on beneficiary cost- 
sharing otherwise applicable under this 
title or title XIX shall apply. 
‘‘(C) REQUIRED
PROVISION
OF
SUPPLE-
MENTAL BENEFITS.—If the coverage described 
in subparagraph (A) does not provide coverage 
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for 
the 
services 
referred 
to 
in 
section 
2102(a)(7), the State child health plan shall 
provide coverage of such services as supple-
mental benefits. 
‘‘(D) LIMITATION ON FFP.—The amount 
of the payment under paragraph (1)(C) for cov-
erage described in subparagraph (A) (and sup-
plemental benefits under subparagraph (C) for 
individuals so covered) during a fiscal year may 
not exceed the product of— 
‘‘(i) the national per capita expendi-
ture under this title (taking into account 
both Federal and State expenditures) for 
the previous fiscal year (as determined by 
the Secretary using the best available 
data); 
‘‘(ii) the enhanced FMAP for the 
State and fiscal year involved; and 
‘‘(iii) the number of targeted low-in-
come children for whom such coverage is 
provided. 
‘‘(E) VOLUNTARY ENROLLMENT.—A State 
child health plan— 
‘‘(i) may not require a targeted low- 
income child to enroll in coverage described 
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in subparagraph (A) in order to obtain 
child health assistance under this title; 
‘‘(ii) before providing such child 
health assistance for such coverage of a 
child, shall make available (which may be 
through an Internet website or other 
means) to the parent or guardian of the 
child information on the coverage available 
under this title, including benefits and 
cost-sharing; and 
‘‘(iii) shall provide at least one oppor-
tunity per fiscal year for beneficiaries to 
switch coverage under this title from cov-
erage described in subparagraph (A) to the 
coverage that is otherwise made available 
under this title. 
‘‘(F) INFORMATION
ON
COVERAGE
OP-
TIONS.—A State child health plan shall— 
‘‘(i) describe how the State will notify 
potential beneficiaries of coverage de-
scribed in subparagraph (A); 
‘‘(ii) provide such notification in writ-
ing at least during the initial application 
for enrollment under this title and during 
redeterminations of eligibility if the indi-
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vidual was enrolled before October 1, 2008; 
and 
‘‘(iii) post a description of these cov-
erage options on any official website that 
may be established by the State in connec-
tion with the plan. 
‘‘(G) SEMIANNUAL VERIFICATION OF COV-
ERAGE.—If coverage described in subparagraph 
(A) is provided under a group health plan with 
respect to a targeted low-income child, the 
State child health plan shall provide for the col-
lection, at least once every six months, of proof 
from the plan that the child is enrolled in such 
coverage. 
‘‘(H) RULE OF CONSTRUCTION.—Nothing 
in this section is to be construed to prohibit a 
State from— 
‘‘(i) offering wrap around benefits in 
order for a group health plan to meet any 
State-established minimum benefit require-
ments; 
‘‘(ii) establishing a cost-effectiveness 
test to qualify for coverage under such a 
plan; 
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‘‘(iii) establishing limits on beneficiary 
cost-sharing under such a plan; 
‘‘(iv) paying all or part of a bene-
ficiary’s cost-sharing requirements under 
such a plan; 
‘‘(v) paying less than the full cost of 
the employee’s share of the premium under 
such a plan, including prorating the cost of 
the premium to pay for only what the 
State determines is the portion of the pre-
mium that covers targeted low-income chil-
dren; 
‘‘(vi) using State funds to pay for 
benefits above the Federal upper limit es-
tablished under subparagraph (C); 
‘‘(vii) allowing beneficiaries enrolled in 
group health plans from changing plans to 
another coverage option available under 
this title at any time; or 
‘‘(viii) providing any guidance or in-
formation it deems appropriate in order to 
help beneficiaries make an informed deci-
sion regarding the option to enroll in cov-
erage described in subparagraph (A). 
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‘‘(I) GROUP HEALTH PLAN DEFINED.—In 
this paragraph, the term ‘group health plan’ 
has the meaning given such term in section 
2791(a)(1) of the Public Health Service Act (42 
U.S.C. 300gg–91(a)(1)).’’. 
SEC. 7. IMPROVING BENEFICIARY CHOICE IN SCHIP. 
(a) REQUIRING OFFERING OF ALTERNATIVE COV-
ERAGE OPTIONS.—Section 2102 of the Social Security Act 
(42 U.S.C. 1397b), as amended by sections 2(a) and 6(a), 
is amended— 
(1) in subsection (a)— 
(A) in paragraph (8), by striking ‘‘and’’ at 
the end; 
(B) in paragraph (9), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following new 
paragraph: 
‘‘(10) effective for plan years beginning on or 
after October 1, 2008, how the plan will provide for 
child health assistance with respect to targeted low- 
income children through alternative coverage options 
in accordance with subsection (d).’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(d) ALTERNATIVE COVERAGE OPTIONS.— 
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‘‘(1) IN GENERAL.—Effective October 1, 2008, 
a State child health plan shall provide for the offer-
ing of any qualified alternative coverage that a 
qualified entity seeks to offer to targeted low-income 
children through the plan in the State. 
‘‘(2) APPLICATION
OF
UNIFORM
FINANCIAL 
LIMITATION FOR ALL ALTERNATIVE COVERAGE OP-
TIONS.—With respect to all qualified alternative cov-
erage offered in a State, the State child health plan 
shall establish a uniform dollar limitation on the per 
capita monthly amount that will be paid by the 
State to the qualified entity with respect to such 
coverage provided to a targeted low-income child. 
Such limitation may not be less than 90 percent of 
the per capita monthly payment made for coverage 
offered under the State child health plan that is not 
in the form of an alternative coverage option. Noth-
ing in this paragraph shall be construed— 
‘‘(A) as requiring a State to provide for 
the full payment of premiums for qualified al-
ternative coverage; 
‘‘(B) as preventing a State from charging 
additional premiums to cover the difference be-
tween the cost of qualified alternative coverage 
and the amount of such payment limitation; 
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‘‘(C) as preventing a State from using its 
own funds to provide a dollar limitation that ex-
ceeds the Federal financial participation as lim-
ited under section 2105(c)(8). 
‘‘(3) QUALIFIED ALTERNATIVE COVERAGE DE-
FINED.—In this section, the term ‘qualified alter-
native coverage’ means health insurance coverage 
that— 
‘‘(A) meets the coverage requirements of 
section 2103 (other than cost-sharing require-
ments of such section); and 
‘‘(B) is offered by a qualified insurer, and 
not directly by the State. 
‘‘(4) QUALIFIED
INSURER
DEFINED.—In this 
section, the term ‘qualified insurer’ means, with re-
spect to a State, an entity that is licensed to offer 
health insurance coverage in the State.’’. 
(b) FEDERAL
FINANCIAL
PARTICIPATION
FOR 
QUALIFIED ALTERNATIVE COVERAGE.—Section 2105 of 
such Act (42 U.S.C. 1397d) is amended— 
(1) in subsection (a)(1)(C), as amended by sec-
tion 6(b), by inserting before the semicolon at the 
end the following: ‘‘and, subject to paragraph 
(8)(C), in the form of payment of the premiums for 
coverage for qualified alternative coverage’’; and 
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(2) by adding at the end of subsection (c) the 
following new paragraph: 
‘‘(8) PURCHASE OF QUALIFIED ALTERNATIVE 
COVERAGE.— 
‘‘(A) IN
GENERAL.—Payment may be 
made to a State under subsection (a)(1)(C), 
subject to the provisions of this paragraph, for 
the purchase of qualified alternative coverage. 
‘‘(B) WAIVER OF CERTAIN PROVISIONS.— 
With respect to coverage described in subpara-
graph (A), no limitation on beneficiary cost- 
sharing otherwise applicable under this title or 
title XIX shall apply. 
‘‘(C) LIMITATION ON FFP.—The amount of 
the payment under paragraph (1)(C) for cov-
erage described in subparagraph (A) during a 
fiscal year in the aggregate for all such cov-
erage in the State may not exceed the product 
of— 
‘‘(i) the national per capita expendi-
ture under this title (taking into account 
both Federal and State expenditures) for 
the previous fiscal year (as determined by 
the Secretary using the best available 
data); 
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‘‘(ii) the enhanced FMAP for the 
State and fiscal year involved; and 
‘‘(iii) the number of targeted low-in-
come children for whom such coverage is 
provided. 
‘‘(D) VOLUNTARY ENROLLMENT.—A State 
child health plan— 
‘‘(i) may not require a targeted low- 
income child to enroll in coverage described 
in subparagraph (A) in order to obtain 
child health assistance under this title; 
‘‘(ii) before providing such child 
health assistance for such coverage of a 
child, shall make available (which may be 
through an Internet website or other 
means) to the parent or guardian of the 
child information on the coverage available 
under this title, including benefits and 
cost-sharing; and 
‘‘(iii) shall provide at least one oppor-
tunity per fiscal year for beneficiaries to 
switch coverage under this title from cov-
erage described in subparagraph (A) to the 
coverage that is otherwise made available 
under this title. 
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‘‘(E) INFORMATION
ON
COVERAGE
OP-
TIONS.—A State child health plan shall— 
‘‘(i) describe how the State will notify 
potential beneficiaries of coverage de-
scribed in subparagraph (A); 
‘‘(ii) provide such notification in writ-
ing at least during the initial application 
for enrollment under this title and during 
redeterminations of eligibility if the indi-
vidual was enrolled before October 1, 2008; 
and 
‘‘(iii) post a description of these cov-
erage options on any official website that 
may be established by the State in connec-
tion with the plan. 
‘‘(F) RULE OF CONSTRUCTION.—Nothing 
in this section is to be construed to prohibit a 
State from— 
‘‘(i) establishing limits on beneficiary 
cost-sharing under such alternative cov-
erage; 
‘‘(ii) paying all or part of a bene-
ficiary’s cost-sharing requirements under 
such coverage; 
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‘‘(iii) paying less than the full cost of 
a child’s share of the premium under such 
coverage, insofar as the premium for such 
coverage exceeds the limitation established 
by the State under subparagraph (C); 
‘‘(iv) using State funds to pay for 
benefits above the Federal upper limit es-
tablished under subparagraph (C); or 
‘‘(v) providing any guidance or infor-
mation it deems appropriate in order to 
help beneficiaries make an informed deci-
sion regarding the option to enroll in cov-
erage described in subparagraph (A).’’. 
SEC. 8. ALLOTMENT DISTRIBUTION FORMULA. 
(a) ALLOTMENTS TO 50 STATES AND THE DISTRICT 
OF COLUMBIA.— 
(1) IN GENERAL.—Section 2104(b) of the So-
cial Security Act (42 U.S.C. 1397dd(b)) is amend-
ed— 
(A) in paragraph (1), by striking ‘‘the 
same proportion’’ and all that follows and in-
serting ‘‘the product of the number of SCHIP 
targeted children, as determined under para-
graph (2) for the second preceding fiscal year, 
the State and Federal per capita SCHIP ex-
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penditures for the second preceding fiscal year, 
as determined under such paragraph, and the 
enhanced FMAP for the State for the second 
preceding fiscal year.’’; 
(B) by amending paragraph (2) to read as 
follows: 
‘‘(2) NUMBER OF SCHIP TARGETED CHILDREN 
AND PREGNANT WOMEN AND NATIONAL PER CAPITA 
SCHIP EXPENDITURES.— 
‘‘(A) IN
GENERAL.—By not later than 
September 30 of each year (beginning with 
2007), the Secretary (in consultation with the 
Director of the Bureau of the Census and using 
the best available data for the fiscal year ending 
in the previous year) shall determine and pub-
lish in the Federal Register— 
‘‘(i) the average number of low-income 
targeted children (described in subpara-
graph (B)) for any month during such pre-
ceding fiscal year; and 
‘‘(ii) the combined State and Federal 
per capita SCHIP expenditures (described 
in subparagraph (C)) for such preceding 
fiscal year. 
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‘‘(B) LOW-INCOME SCHIP TARGETED CHIL-
DREN.—Low-income targeted children described 
in this subparagraph with respect to a sub-
section (b) State are children (including preg-
nant women described in section 2105(c)(8)(E)) 
residing in the State who are not covered under 
a group health plan or health insurance cov-
erage (as defined for purposes of section 
2110(b)(1)(C)) and whose family income— 
‘‘(i) exceeds the lesser of— 
‘‘(I) the Medicaid applicable in-
come level (as defined in section 
2110(b)(4)); or 
‘‘(II) 150 percent of the poverty 
line; but 
‘‘(ii) does not 200 percent of the pov-
erty line. 
‘‘(C) STATE
AND
FEDERAL
PER
CAPITA 
SCHIP EXPENDITURES.—The State and Federal 
per capita SCHIP expenditures for a fiscal year 
is equal to— 
‘‘(i) the aggregate Federal and State 
expenditures made that are attributable to 
allotments under this title for subsection 
(b) States for the fiscal year; divided by 
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‘‘(ii) the average total number of tar-
geted low-income children (including preg-
nant 
women 
described 
in 
section 
2105(c)(8)(E)) for whom health assistance 
was made available from such allotments 
for such fiscal year.’’; and 
(C) by striking paragraphs (3) and (4) and 
inserting the following: 
‘‘(3) SUBSECTION (B) STATE DEFINED.—In this 
subsection, the term ‘subsection (b) State’ means 
one of the 50 States or the District of Columbia. 
‘‘(4) PROPORTIONAL REDUCTION IF TOTAL AL-
LOTMENTS
EXCEED
AMOUNT
AVAILABLE.—If the 
Secretary estimates that the total of the allotments 
under this subsection for a fiscal year (in combina-
tion with allotments made under subsection (c)) will 
exceed the aggregate amount available for allotments 
for such fiscal year under subsection (a), the Sec-
retary shall reduce the amount of each allotment 
under this subsection in a pro-rata manner so that 
such total does not exceed the aggregate amount 
available for allotments.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to allotments for fiscal 
years beginning with fiscal year 2008. 
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(b) NO
REDISTRIBUTION
OF
UNUSED
ALLOT-
MENTS.— 
(1) IN GENERAL.—Section 2104(f) of such Act 
(42 U.S.C. 1397dd) is amended to read as follows: 
‘‘(f) NO
REDISTRIBUTION
OF
UNUSED
ALLOT-
MENTS.—There shall be no redistribution of allotments 
from States that are not expended within the period of 
availability under subsection (e).’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to allotments for fiscal 
years beginning with fiscal year 2005. 
SEC. 9. FIVE-YEAR REAUTHORIZATION. 
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 a semicolon; and 
(3) by adding at the end the following new 
paragraphs: 
‘‘(11) for fiscal year 2008, $7,000,000,000; 
‘‘(12) for fiscal year 2009, $7,000,000,000; 
‘‘(13) for fiscal year 2010, $7,000,000,000; 
‘‘(14) for fiscal year 2011, $7,500,000,000; and 
‘‘(15) for fiscal year 2012, $8,000,000,000.’’. 
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SEC. 10. ENHANCING THE PROGRAMMATIC FOCUS ON 
CHILDREN AND PREGNANT WOMEN. 
(a) IN GENERAL.—Section 2107(f) of the Social Se-
curity Act (42 U.S.C. 1397gg(f)) is amended by striking 
‘‘childless’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on the date of the enact-
ment of this Act but shall not apply to projects, including 
extensions, amendments, or renewals to such projects, that 
are in effect or have been approved on the date of the 
enactment of this Act. 
Æ 
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