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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.