To amend title XIX of the Social Security Act to provide families of disabled children with the opportunity to purchase coverage under the Medicaid Program for such children, and for other purposes.

SECTION 1. SHORT TITLE; AMENDMENTS TO SOCIAL SECURITY ACT; TABLE OF 
              CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Family Opportunity 
Act of 2003'' or the ``Dylan Lee James Act''.
    (b) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this Act an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference shall be considered to be made to that section or other 
provision of the Social Security Act.
    (c) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; amendments to Social Security Act; table of 
                            contents.
Sec. 2. Opportunity for families of disabled children to purchase 
                            medicaid coverage for such children.
Sec. 3. Treatment of inpatient psychiatric hospital services for 
                            individuals under age 21 in home or 
                            community-based services waivers.
Sec. 4. Development and support of family-to-family health information 
                            centers.
Sec. 5. Restoration of medicaid eligibility for certain SSI 
                            beneficiaries.

SEC. 2. OPPORTUNITY FOR FAMILIES OF DISABLED CHILDREN TO PURCHASE 
              MEDICAID COVERAGE FOR SUCH CHILDREN.

    (a) State Option To Allow Families of Disabled Children To Purchase 
Medicaid Coverage for Such Children.--
            (1) In general.--Section 1902 (42 U.S.C. 1396a) is 
        amended--
                    (A) in subsection (a)(10)(A)(ii)--
                            (i) by striking ``or'' at the end of 
                        subclause (XVII);
                            (ii) by adding ``or'' at the end of 
                        subclause (XVIII); and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(XIX) who are disabled children 
                                described in subsection (cc)(1);''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(cc)(1) Individuals described in this paragraph are individuals--
            ``(A) who have not attained 18 years of age;
            ``(B) who would be considered disabled under section 
        1614(a)(3)(C) but for having earnings or deemed income or 
        resources (as determined under title XVI for children) that 
        exceed the requirements for receipt of supplemental security 
        income benefits; and
            ``(C) whose family income does not exceed such income level 
        as the State establishes and does not exceed--
                    ``(i) 250 percent of the income official poverty 
                line (as defined by the Office of Management and 
                Budget, and revised annually in accordance with section 
                673(2) of the Omnibus Budget Reconciliation Act of 
                1981) applicable to a family of the size involved; or
                    ``(ii) such higher percent of such poverty line as 
                a State may establish, except that--
                            ``(I) any medical assistance provided to an 
                        individual whose family income exceeds 250 
                        percent of such poverty line may only be 
                        provided with State funds; and
                            ``(II) no Federal financial participation 
                        shall be provided under section 1903(a) for any 
                        medical assistance provided to such an 
                        individual.''.
            (2) Interaction with employer-sponsored family coverage.--
        Section 1902(cc) (42 U.S.C. 1396a(cc)), as added by paragraph 
        (1)(B), is amended by adding at the end the following new 
        paragraph:
    ``(2)(A) If an employer of a parent of an individual described in 
paragraph (1) offers family coverage under a group health plan (as 
defined in section 2791(a) of the Public Health Service Act), the State 
shall--
            ``(i) require such parent to apply for, enroll in, and pay 
        premiums for, such coverage as a condition of such parent's 
        child being or remaining eligible for medical assistance under 
        subsection (a)(10)(A)(ii)(XIX) if the parent is determined 
        eligible for such coverage and the employer contributes at 
        least 50 percent of the total cost of annual premiums for such 
        coverage; and
            ``(ii) if such coverage is obtained--
                    ``(I) subject to paragraph (2) of section 1916(h), 
                reduce the premium imposed by the State under that 
                section in an amount that reasonably reflects the 
                premium contribution made by the parent for private 
                coverage on behalf of a child with a disability; and
                    ``(II) treat such coverage as a third party 
                liability under subsection (a)(25).
    ``(B) In the case of a parent to which subparagraph (A) applies, a 
State, subject to paragraph (1)(C)(ii), may provide for payment of any 
portion of the annual premium for such family coverage that the parent 
is required to pay. Any payments made by the State under this 
subparagraph shall be considered, for purposes of section 1903(a), to 
be payments for medical assistance.''.
    (b) State Option To Impose Income-Related Premiums.--Section 1916 
(42 U.S.C. 1396o) is amended--
            (1) in subsection (a), by striking ``subsection (g)'' and 
        inserting ``subsections (g) and (h)''; and
            (2) by adding at the end the following new subsection:
    ``(h)(1) With respect to disabled children provided medical 
assistance under section 1902(a)(10)(A)(ii)(XIX), subject to paragraph 
(2), a State may (in a uniform manner for such children) require the 
families of such children to pay monthly premiums set on a sliding 
scale based on family income.
    ``(2) A premium requirement imposed under paragraph (1) may only 
apply to the extent that--
            ``(A) the aggregate amount of such premium and any premium 
        that the parent is required to pay for family coverage under 
        section 1902(cc)(2)(A)(i) does not exceed 5 percent of the 
        family's income; and
            ``(B) the requirement is imposed consistent with section 
        1902(cc)(2)(A)(ii)(I).
    ``(3) A State shall not require prepayment of a premium imposed 
pursuant to paragraph (1) and shall not terminate eligibility of a 
child under section 1902(a)(10)(A)(ii)(XIX) for medical assistance 
under this title on the basis of failure to pay any such premium until 
such failure continues for a period of not less than 60 days from the 
date on which the premium became past due. The State may waive payment 
of any such premium in any case where the State determines that 
requiring such payment would create an undue hardship.''.
    (c) Conforming Amendments.--Section 1903(f)(4) (42 U.S.C. 
1396b(f)(4)) is amended in the matter preceding subparagraph (A), by 
inserting ``1902(a)(10)(A)(ii)(XIX),'' after 
``1902(a)(10)(A)(ii)(XVIII),''.
    (d) Effective Date.--The amendments made by this section shall 
apply to medical assistance for items and services furnished on or 
after October 1, 2005.

SEC. 3. TREATMENT OF INPATIENT PSYCHIATRIC HOSPITAL SERVICES FOR 
              INDIVIDUALS UNDER AGE 21 IN HOME OR COMMUNITY-BASED 
              SERVICES WAIVERS.

    (a) In General.--Section 1915(c) (42 U.S.C. 1396n(c)) is amended--
            (1) in paragraph (1)--
                    (A) in the first sentence, by inserting ``, or 
                would require inpatient psychiatric hospital services 
                for individuals under age 21,'' after ``intermediate 
                care facility for the mentally retarded''; and
                    (B) in the second sentence, by inserting ``, or 
                would require inpatient psychiatric hospital services 
                for individuals under age 21'' before the period;
            (2) in paragraph (2)(B), by striking ``or services in an 
        intermediate care facility for the mentally retarded'' each 
        place it appears and inserting ``services in an intermediate 
        care facility for the mentally retarded, or inpatient 
        psychiatric hospital services for individuals under age 21'';
            (3) in paragraph (2)(C)--
                    (A) by inserting ``, or who are determined to be 
                likely to require inpatient psychiatric hospital 
                services for individuals under age 21,'' after ``, or 
                intermediate care facility for the mentally retarded''; 
                and
                    (B) by striking ``or services in an intermediate 
                care facility for the mentally retarded'' and inserting 
                ``services in an intermediate care facility for the 
                mentally retarded, or inpatient psychiatric hospital 
                services for individuals under age 21''; and
            (4) in paragraph (7)(A)--
                    (A) by inserting ``or would require inpatient 
                psychiatric hospital services for individuals under age 
                21,'' after ``intermediate care facility for the 
                mentally retarded,''; and
                    (B) by inserting ``or who would require inpatient 
                psychiatric hospital services for individuals under age 
                21'' before the period.
    (b) Effective Date.--The amendments made by subsection (a) apply 
with respect to medical assistance provided on or after January 1, 
2004.

SEC. 4. DEVELOPMENT AND SUPPORT OF FAMILY-TO-FAMILY HEALTH INFORMATION 
              CENTERS.

    Section 501 (42 U.S.C. 701) is amended by adding at the end the 
following new subsection:
    ``(c)(1)(A) For the purpose of enabling the Secretary (through 
grants, contracts, or otherwise) to provide for special projects of 
regional and national significance for the development and support of 
family-to-family health information centers described in paragraph 
(2)--
            ``(i) there is appropriated to the Secretary, out of any 
        money in the Treasury not otherwise appropriated--
                    ``(I) $3,000,000 for fiscal year 2004;
                    ``(II) $4,000,000 for fiscal year 2005; and
                    ``(III) $5,000,000 for fiscal year 2006; and
            ``(ii) there is authorized to be appropriated to the 
        Secretary, $5,000,000 for each of fiscal years 2007 and 2008.
    ``(B) Funds appropriated or authorized to be appropriated under 
subparagraph (A) shall--
            ``(i) be in addition to amounts appropriated under 
        subsection (a) and retained under section 502(a)(1) for the 
        purpose of carrying out activities described in subsection 
        (a)(2); and
            ``(ii) remain available until expended.
    ``(2) The family-to-family health information centers described in 
this paragraph are centers that--
            ``(A) assist families of children with disabilities or 
        special health care needs to make informed choices about health 
        care in order to promote good treatment decisions, cost-
        effectiveness, and improved health outcomes for such children;
            ``(B) provide information regarding the health care needs 
        of, and resources available for, children with disabilities or 
        special health care needs;
            ``(C) identify successful health delivery models for such 
        children;
            ``(D) develop with representatives of health care 
        providers, managed care organizations, health care purchasers, 
        and appropriate State agencies a model for collaboration 
between families of such children and health professionals;
            ``(E) provide training and guidance regarding caring for 
        such children;
            ``(F) conduct outreach activities to the families of such 
        children, health professionals, schools, and other appropriate 
        entities and individuals; and
            ``(G) are staffed by families of children with disabilities 
        or special health care needs who have expertise in Federal and 
        State public and private health care systems and health 
        professionals.
    ``(3) The Secretary shall develop family-to-family health 
information centers described in paragraph (2) under this subsection in 
accordance with the following:
            ``(A) With respect to fiscal year 2004, such centers shall 
        be developed in not less than 25 States.
            ``(B) With respect to fiscal year 2005, such centers shall 
        be developed in not less than 40 States.
            ``(C) With respect to fiscal year 2006, such centers shall 
        be developed in not less than 50 States and the District of 
        Columbia.
    ``(4) The provisions of this title that are applicable to the funds 
made available to the Secretary under section 502(a)(1) apply in the 
same manner to funds made available to the Secretary under paragraph 
(1)(A).
    ``(5) For purposes of this subsection, the term `State' means each 
of the 50 States and the District of Columbia.''.

SEC. 5. RESTORATION OF MEDICAID ELIGIBILITY FOR CERTAIN SSI 
              BENEFICIARIES.

    (a) In General.--Section 1902(a)(10)(A)(i)(II) (42 U.S.C. 
1396a(a)(10)(A)(i)(II)) is amended--
            (1) by inserting ``(aa)'' after ``(II)'';
            (2) by striking ``) and'' and inserting ``and'';
            (3) by striking ``section or who are'' and inserting 
        ``section), (bb) who are''; and
            (4) by inserting before the comma at the end the following: 
        ``, or (cc) who are under 21 years of age and with respect to 
        whom supplemental security income benefits would be paid under 
        title XVI if subparagraphs (A) and (B) of section 1611(c)(7) 
        were applied without regard to the phrase `the first day of the 
        month following'''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to medical assistance for items and services furnished on or 
after the first day of the first calendar quarter that begins after the 
date of enactment of this Act.

Summary: Family Opportunity Act of 2003 or Dylan Lee James Act - Amends title XIX (Medicaid) of the Social Security Act (SSA) to: (1) give States the option of allowing families of disabled children to purchase Medicaid coverage for them; and (2) provide for treatment of inpatient psychiatric hospital services for individuals under age 21 under waivers allowing for payment of part or all of the cost of home or community-based services.Amends SSA title V (Maternal and Child Health Services) to make appropriations to the Secretary of Health and Human Services for special projects of regional and national significance for development and support of family-to-family health information centers.Amends SSA title XIX to provide for the restoration of Medicaid eligibility to certain Supplemental Security Income (SSA title XVI) beneficiaries under age 21.