SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Children First SCHIP Improvement Act 
of 2002''.

SEC. 2. PERMITTING USE OF RETAINED FISCAL YEAR 1998, 1999, AND 2000 
              SCHIP ALLOTMENTS THROUGH FISCAL YEAR 2003.

    (a) Retained and Redistributed Allotments for Fiscal Years 1998 and 
1999.--Paragraphs (1)(B)(ii), (2)(A)(i), and (2)(A)(ii) of section 
2104(g) of the Social Security Act (42 U.S.C. 1397dd(g)) are each 
amended by striking ``fiscal year 2002'' and inserting ``fiscal year 
2003''.
    (b) Fiscal Year 2000.--Section 2104(g)(2) of such Act (42 U.S.C. 
1397dd(g)(2)) is amended--
            (1) in the heading, by striking ``and 1999'' and inserting 
        ``through 2000'';
            (2) by adding at the end of subparagraph (A) the following:
                            ``(iii) Fiscal year 2000 allotment.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II) with respect 
                                to high unemployment States, of the 
                                amounts allotted to a State pursuant to 
                                this section for fiscal year 2000 that 
                                were not expended by the State by the 
                                end of fiscal year 2002, the amount 
                                specified in subparagraph (B) for 
                                fiscal year 2000 for such State shall 
                                remain available for expenditure by the 
                                State through the end of fiscal year 
                                2003.
                                    ``(II) Special rule for high 
                                unemployment states.--With respect only 
                                to high unemployment States (as defined 
                                in subparagraph (D)), of the amounts 
                                allotted to such a State pursuant to 
                                this section for fiscal year 2000 that 
                                were not expended by the State by the 
                                end of fiscal year 2002, all such 
                                amounts for fiscal year 2000 for such 
                                State shall remain available for 
                                expenditure by the State through the 
                                end of fiscal year 2003.''; and
            (3) by adding at the end the following new subparagraph:
                    ``(D) High unemployment state defined.--For 
                purposes of subparagraph (A)(iii), the term `high 
                unemployment State' means a State that is any of the 50 
                States or the District of Columbia and that had an 
                unemployment rate (seasonally adjusted) of at least 6 
                percent in each of two consecutive months in 2002.''.
    (c) Use of Unused Fiscal Year 1998 Through 2000 Funds.--Section 
2104(g) of such Act (42 U.S.C. 1397dd(g)), as amended by subsection 
(b), is further amended by adding at the end the following new 
paragraph:
            ``(5) Use of unexpended fiscal years 1998 through 2000 
        allotments.--Notwithstanding any waiver granted under section 
        1115 or otherwise for the use of funds under title XIX or this 
        title that is approved as of September 30, 2002, amounts made 
        available for expenditure under this subsection to provide 
        child health assistance under this title shall be expended in 
        accordance with the following priority:
                    ``(A) First to children who are eligible for child 
                health assistance under this title.
                    ``(B) Second to children who are eligible for 
                medical assistance under title XIX.''.
    (d) Effective Date.--The amendments made by this section shall be 
effective as if this section had been enacted on September 30, 2002, 
and amounts under title XXI of the Social Security Act (42 U.S.C. 1397 
et seq.) from allotments for fiscal years 1998 through 2000 are  
available for expenditure on and after October 1, 2002, under the 
amendments made by this section as if this section had been enacted on 
September 30, 2002.

SEC. 3. SCHIP COVERAGE OF CHILDREN ABOVE THE MEDICAID MANDATORY LEVEL 
              FOR CERTAIN STATES MEETING ADDITIONAL REQUIREMENTS.

    Section 2110(b) of the Social Security Act (42 U.S.C. 1397jj(b)) is 
amended--
            (1) in paragraph (1)(B)(ii)(I), by inserting before the 
        semicolon the following: ``, or, with respect to allotments for 
        fiscal years beginning with fiscal year 2001, in the case of an 
        eligible State (as defined in paragraph (5)), whose family 
        income (as so determined) exceeds such medicaid applicable 
        income level''; and
            (2) by adding at the end the following new paragraph:
            ``(5) Eligible state.--For purposes of paragraph 
        (1)(B)(ii)(I), an eligible State is a State that, with respect 
        to the fiscal year involved, meets all of the following 
        conditions:
                    ``(A) Expanded eligibility of children under 
                medicaid.--The State's plan for medical assistance 
                under title XIX provides for eligibility for medical 
                assistance of children who are under 19 years of age 
                and whose family income does not exceed 185 percent of 
                the poverty line.
                    ``(B) Highest schip income eligibility.--The State 
                child health plan (whether implemented under this title 
                or under title XIX)--
                            ``(i) has the highest income eligibility 
                        standard permitted under this title as of 
                        January 1, 2001;
                            ``(ii) does not impose any waiting list, 
                        numerical limitation, or similar limitation on 
                        the eligibility of children for child health 
                        assistance; and
                            ``(iii) provides benefits to all children 
                        in the State who apply for and meet eligibility 
                        standards.
                    ``(C) No loss of medicaid or schip coverage due to 
                inability to pay premiums and cost-sharing.--The 
                State's plan for medical assistance under title XIX and 
                the State child health plan do deny an eligible child 
                coverage or needed care because of an inability to pay 
                premiums or cost-sharing otherwise imposed under the 
                respective plan.
                    ``(D) Uniform, simplified application form.--With 
                respect to children who are eligible for medical 
                assistance under section 1902(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 this title and also 
                under title XIX.
                    ``(E) No asset test.--The State does not impose an 
                asset test for eligibility under this title or under 
                section 1902(l) with respect to children.
                    ``(F) 12-month continuous enrollment.--The State 
                has elected the option of continuing eligibility under 
                section 1902(e)(12) and has elected a 12-month period 
                under subparagraph (A) of such section and provides for 
                a similar period of continuous eligibility under the 
                State child health plan.
                    ``(G) Coordinated enrollment process.--The State's 
                enrollment process under this title is coordinated with 
                such process under title XIX so that--
                            ``(i) a family need only interact with a 
                        single agency in order to determine whether a 
                        child is eligible for benefits under this title 
                        or title XIX; and
                            ``(ii) transfers of enrollment, without a 
                        gap in coverage, automatically occur for a 
                        child in a family the income of which changes 
                        so that the child is no longer eligible for 
                        benefits under one such title but becomes 
                        eligible for benefits under the other title.
                    ``(H) 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), the State 
                provides for initial eligibility determinations and 
                redeterminations of eligibility using the same 
                verification policies (including policies respecting 
                face-to-face interviews), forms, and frequency as the 
                State uses for such purposes under this title, and, as 
                part of such redeterminations, provides for the 
                automatic reassessment of the eligibility of such 
                children for assistance under this title and title XIX.
Output: Children First SCHIP Improvement Act of 2002 - Amends title XXI (State Children's Health Insurance) (SCHIP) of the Social Security Act to provide for: (1) extending the availability through FY 2003 of SCHIP allotments for FY 1998 through 2000; and (2) SCHIP coverage of children whose family income exceeds the Medicaid applicable income level for eligible States.