SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Children's Health Equity Act of 
2003''.

SEC. 2. AUTHORITY FOR QUALIFYING STATES TO USE SCHIP FUNDS FOR MEDICAID 
              EXPENDITURES.

    Section 2105 of the Social Security Act (42 U.S.C. 1397ee) is 
amended by adding at the end the following:
    ``(g) Authority for Qualifying States To Use Certain Funds for 
Medicaid Expenditures.--
            ``(1) State option.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, with respect to fiscal years in which 
                allotments for a fiscal year under section 2104 
                (beginning with fiscal year 1998) are available under 
                subsections (e) and (g) of that section, a qualifying 
                State (as defined in paragraph (2)) may elect to use 
                such allotments (instead of for expenditures under this 
                title) for payments for such fiscal year under title 
                XIX in accordance with subparagraph (B).
                    ``(B) Payments to states.--
                            ``(i) In general.--In the case of a 
                        qualifying State that has elected the option 
                        described in subparagraph (A), subject to the 
                        total amount of funds described with respect to 
                        the State in subparagraph (A), the Secretary 
                        shall pay the State an amount each quarter 
                        equal to the additional amount that would have 
                        been paid to the State under title XIX for 
                        expenditures of the State for the fiscal year 
                        described in clause (ii) if the enhanced FMAP 
                        (as determined under subsection (b)) had been 
                        substituted for the Federal medical assistance 
                        percentage (as defined in section 1905(b)) of 
                        such expenditures.
                            ``(ii) Expenditures described.--For 
                        purposes of clause (i), the expenditures 
                        described in this clause are expenditures for 
                        such fiscal years for providing medical 
                        assistance under title XIX to individuals who 
                        have not attained age 19 and whose family 
                        income exceeds 133 percent of the poverty line.
                            ``(iii) No impact on determination of 
                        budget neutrality for waivers.--In the case of 
                        a qualifying State that uses amounts paid under 
                        this subsection for expenditures described in 
                        clause (ii) that are incurred under a waiver 
                        approved for the State, any budget neutrality 
                        determinations with respect to such waiver 
                        shall be determined without regard to such 
                        amounts paid.
            ``(2) Qualifying state.--In this subsection, the term 
        `qualifying State' means a State that--
                    ``(A) as of April 15, 1997, has an income 
                eligibility standard with respect to any 1 or more 
                categories of children (other than infants) who are 
                eligible for medical assistance under section 
                1902(a)(10)(A) or under a waiver under section 1115 
                implemented on January 1, 1994, that is up to 185 
                percent of the poverty line or above; and
                    ``(B) satisfies the requirements described in 
                paragraph (3).
            ``(3) Requirements.--The requirements described in this 
        paragraph are the following:
                    ``(A) SCHIP income eligibility.--The State has a 
                State child health plan that (whether implemented under 
                title XIX or this title)--
                            ``(i) as of January 1, 2001, has an income 
                        eligibility standard that is at least 200 
                        percent of the poverty line or has an income 
                        eligibility standard that exceeds 200 percent 
                        of the poverty line under a waiver under 
                        section 1115 that is based on a child's lack of 
                        health insurance;
                            ``(ii) subject to subparagraph (B), does 
                        not limit the acceptance of applications for 
                        children; and
                            ``(iii) provides benefits to all children 
                        in the State who apply for and meet eligibility 
                        standards on a statewide basis.
                    ``(B) 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.
                    ``(C) Additional requirements.--The State has 
                implemented at least 3 of the following policies and 
                procedures (relating to coverage of children under 
                title XIX and this title):
                            ``(i) 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 
                        title XIX and this title.
                            ``(ii) Elimination of asset test.--The 
                        State does not apply any asset test for 
                        eligibility under section 1902(l) or this title 
                        with respect to children.
                            ``(iii) Adoption of 12-month continuous 
                        enrollment.--The State provides that 
                        eligibility shall not be regularly redetermined 
                        more often than once every year under this 
                        title or for children described in section 
                        1902(a)(10)(A).
                            ``(iv) 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 with respect to 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 title XIX and this title.
                            ``(v) Outstationing enrollment staff.--The 
                        State provides for the receipt and initial 
                        processing of applications for benefits under 
                        this title and for children under title XIX at 
                        facilities defined as disproportionate share 
                        hospitals under section 1923(a)(1)(A) and 
                        Federally-qualified health centers described in 
                        section 1905(l)(2)(B) consistent with section 
                        1902(a)(55).''.
Output: Children's Health Equity Act of 2003 - Amends title XXI (State Children's Health Insurance Program) (SCHIP) of the Social Security Act (SSA) to grant authority for qualifying States to use SCHIP funds for Medicaid (SSA title XIX) expenditures.