A bill to require the Secretary of Health and Human Services to approve up to 4 State waivers to allow a State to use its allotment under the State children's health insurance program under title XXI of the Social Security Act to increase the enrollment of children eligible for medical assistance under the medicaid program under title XIX of such Act.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Children's Health Equity Act of 
2001''.

SEC. 2. APPROVAL OF UP TO 4 STATE WAIVERS TO ALLOW TITLE XXI ALLOTMENTS 
              TO BE USED FOR INCREASING THE ENROLLMENT OF MEDICAID 
              CHILDREN.

    (a) Definitions.--In this section:
            (1) Child.--With respect to a State, the term ``child'' has 
        the meaning given such term for purposes of the State medicaid 
        program under title XIX of the Social Security Act.
            (2) Child health assistance.--The term ``child health 
        assistance'' has the meaning given that term in section 2110(a) 
        of the Social Security Act (42 U.S.C. 1397jj(a)).
            (3) Enhanced fmap.--The term ``enhanced FMAP'' has the 
        meaning given that term in section 2105(b) of such Act (42 
        U.S.C. 1397ee(b)).
            (4) Federal medical assistance percentage.--The term 
        ``Federal medical assistance percentage'' has the meaning given 
        that term in section 1905(b) of such Act (42 U.S.C. 1396d(b)).
            (5) Poverty line.--The term ``poverty line'' has the 
        meaning given that term in section 2110(c)(5) of such Act (42 
        U.S.C. 1397jj(c)(5)).
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
            (7) State child health plan.--The term ``State child health 
        plan'' has the meaning given that term under section 2110(c)(7) 
        of such Act (42 U.S.C. 1397jj(c)(7)).
    (b) Approval of Certain Waivers.--The Secretary shall approve not 
more than 4 waiver applications under which the Secretary shall pay to 
a State that the Secretary determines satisfies the requirements 
described in subsection (c) the payment authorized under subsection 
(d).
    (c) Requirements.--The requirements described in this subsection 
are the following:
            (1) SCHIP income eligibility.--The State has a State child 
        health plan that (whether implemented under title XIX or XXI of 
        the Social Security Act)--
                    (A) has the highest income eligibility standard 
                permitted under title XXI of such Act as of January 1, 
                2001;
                    (B) subject to paragraph (2), does not limit the 
                acceptance of applications for children; and
                    (C) provides benefits to all children in the State 
                who apply for and meet eligibility standards on a 
                statewide basis.
            (2) No waiting list imposed.--With respect to children 
        whose family income is at or below 200 percent of the poverty 
        line, the State does not impose any numerical limitation, 
        waiting list, or similar limitation on the eligibility of such 
        children for child health assistance under such State plan.
            (3) Additional requirements.--The State has implemented at 
        least 4 of the following policies and procedures (relating to 
        coverage of children under titles XIX and title XXI of the 
        Social Security Act):
                    (A) Uniform, simplified application form.--With 
                respect to children who are eligible for medical 
                assistance under section 1902(a)(10)(A) of that Act (42 
                U.S.C. 1396a(a)(10)(A)), the State uses the same 
                uniform, simplified application form (including, if 
                applicable, permitting application other than in 
                person) for purposes of establishing eligibility for 
                benefits under titles XIX and XXI of that Act.
                    (B) Elimination of asset test.--The State does not 
                apply any asset test for eligibility under section 
                1902(l) or title XXI of the Social Security Act (42 
U.S.C. 1396a(l), 1397aa et seq.) with respect to children.
                    (C) Adoption of 12-month continuous enrollment.--
                The State provides that eligibility shall not be 
                regularly redetermined more often than once every year 
                under title XXI of such Act or for children described 
                in section 1902(a)(10)(A) of such Act (42 U.S.C. 
                1396a(a)(10)(A)).
                    (D) Same verification and redetermination policies; 
                automatic reassessment of eligibility.--With respect to 
                children who are eligible for medical assistance under 
                section 1902(a)(10)(A) of such Act (42 U.S.C. 
                1396a(a)(10)(A)), the State provides for initial 
                eligibility determinations and redeterminations of 
                eligibility using the same verification policies 
                (including with respect to face-to-face interviews), 
                forms, and frequency as the State uses for such 
                purposes under title XXI of that Act, and, as part of 
                such redeterminations, provides for the automatic 
                reassessment of the eligibility of such children for 
                assistance under titles XIX and XXI.
                    (E) Outstationing enrollment staff.--The State 
                provides for the receipt and initial processing of 
                applications for benefits under title XXI of such Act 
                and for children under title XIX of that Act at 
                facilities defined as disproportionate share hospitals 
                under section 1923(a)(1)(A) of such Act (42 U.S.C. 
                1396r-4(a)(1)(A)) and Federally-qualified health 
                centers described in section 1905(l)(2)(B) of that Act 
                (42 U.S.C. 1396d(l)(2)(B)) consistent with section 
                1902(a)(55) of that Act (42 U.S.C. 1396a(a)(55)).
    (d) Payment Authorized.--
            (1) In general.--Notwithstanding any provision of title XIX 
        or XXI of the Social Security Act, or any other provision of 
        law, with respect to a State with a waiver approved under this 
        section that satisfies the requirements of subsection (c) (and 
        that otherwise has a State child health plan approved under 
        title XXI of the Social Security Act), the Secretary shall pay 
        to the State from its allotment under section 2104 of the 
        Social Security Act (42 U.S.C. 1397dd) an amount for each 
        fiscal year (beginning with fiscal year 2002) determined under 
        subparagraph (D) as follows:
                    (A) Base expenditure amount.--The Secretary shall 
                determine the total amount of expenditures for medical 
                assistance under title XIX of the Social Security Act 
                in the State for children described in paragraph (2) 
                for fiscal year 1995.
                    (B) Current expenditure amount.--The Secretary 
                shall determine the total amount of expenditures for 
                medical assistance under title XIX of such Act in the 
                State for children described in paragraph (2) for the 
                fiscal year involved.
                    (C) Increased expenditures.--The Secretary shall 
                determine the number (if any) by which the total amount 
                determined under subparagraph (B) exceeds the total 
                amount determined under subparagraph (A).
                    (D) Bonus amount.--The amount determined under this 
                subparagraph for a fiscal year is equal to the product 
                of the following:
                            (i) The total amount determined under 
                        subparagraph (C).
                            (ii) The difference between the enhanced 
                        FMAP and the Federal medical assistance 
                        percentage for that State for the fiscal year 
                        involved.
            (2) Children described.--For purposes of paragraph (1)(A), 
        the children described in this paragraph are--
                    (A) children who are eligible and enrolled for 
                medical assistance under title XIX of the Social 
                Security Act; and
                    (B) children who--
                            (i) would be described in subparagraph (A) 
                        but for having family income that exceeds the 
                        highest income eligibility level applicable to 
                        such individuals under the State plan; and
                            (ii) would be considered disabled under 
                        section 1614(a)(3)(C) of the Social Security 
                        Act (42 U.S.C. 1382c(a)(3)(C)) (determined 
                        without regard to the reference to age in that 
                        section but for having earnings or deemed 
                        income or resources, as determined under title 
                        XVI of such Act for children) that exceed the 
                        requirements for receipt of supplemental 
                        security income benefits.
            (3) Order of title xxi payments.--With respect to a State 
        with a waiver approved under this section, payments to the 
        State under section 2105(a) of the Social Security Act (42 
        U.S.C. 1397ee(a)) for a fiscal year shall, notwithstanding 
        paragraph (2) of such section, be made in the following order:
                    (A) First, for expenditures for items described in 
                paragraph (1)(A) of section 2105(a) of such Act.
                    (B) Second, for expenditures for items described in 
                paragraph (1)(B) of such section.
                    (C) Third, for the payment authorized under 
                subsection (d)(1) of this section.
                    (D) Fourth, for expenditures for items described in 
                paragraph (1)(C) of section 2105(a) of the Social 
                Security Act.
                    (E) Fifth, for expenditures for items described in 
                paragraph (1)(D) of such section.

Summary: Children's Health Equity Act of 2001 - Directs the Secretary of Health and Human Services to approve not more than four waiver applications to allow a State to use its allotment under the State children's health insurance programs (SCHIP) under title XXI of the Social Security Act to increase the enrollment of children eligible for medical assistance under the Medicaid program under title XIX of such Act.