To ensure that American children have high-quality health coverage that fits their individual needs.

SA 86. Mr. COBURN (for himself, Mr. Burr, Mr. Gregg, Mr. McConnell,
Mr. Enzi, Mr. Cornyn, Mr. DeMint, Mr. Johanns, Mr. Kyl, Mr. Alexander,
Mr. Graham, Mr. Chambliss, Mr. Thune, Mr. Barrasso, and Mr. Vitter)
submitted an amendment intended to be proposed by him to the bill H.R.
2, to amend title XXI of the Social Security Act to extend and improve
the Children's Health Insurance Program, and for other purposes; as
follows:

Strike all after the enacting clause and insert the
following:

SECTION 1. PURPOSE.

The purpose of this Act is to ensure that American children
have high-quality health coverage that fits their individual
needs.

SEC. 2. CONTINUATION OF SCHIP FUNDING DURING TRANSITION
PERIOD.

(a) Through Fiscal Year 2010.--Section 2104 of the Social
Security Act (42 U.S.C. 1397dd(a)) is amended--
(1) in subsection (a)--
(A) by striking ``and'' at the end of paragraph (10);
(B) in paragraph (11)--
(i) by striking ``each of fiscal years 2008 and 2009'' and
inserting ``fiscal year 2008''; and
(ii) by striking the period at the end and inserting a
semicolon; and
(C) by adding at the end the following new paragraphs:
``(12) for fiscal year 2009, $7,780,000,000; and
``(13) for fiscal year 2010, $8,044,000,000.''; and
(2) in subsection (c)(4)(B), by striking ``2009'' and
inserting ``2010''.
(b) Extension of Treatment of Qualifying States.--
(1) In general.--Section 2105(g)(1)(A) of the Social
Security Act (42 U.S.C. 1397ee(g)(1)(A)) is amended by
striking ``or 2009'' and inserting ``2009, or 2010''.
(2) Repeal of limitation on availability of fiscal year
2009 allotments.--Paragraph (2) of section 201(b) of the
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public
Law 110-173) is repealed.
(c) Coordination of Funding for Fiscal Year 2009.--
Notwithstanding any other provision of law, insofar as funds
have been appropriated under section 2104(a)(11) of the
Social Security Act, as amended by section 201(a) of Public
Law 110-173 and in effect on January 1, 2009, to provide
allotments to States under title XXI of the Social Security
Act for fiscal year 2009--
(1) any amounts that are so appropriated that are not so
allotted and obligated before the date of the enactment of
this Act are rescinded; and
(2) any amount provided for allotments under title XXI of
such Act to a State under the amendments made by this Act for
such fiscal year shall be reduced by the amount of such
appropriations so allotted and obligated before such date.

SEC. 3. HIGH-QUALITY HEALTH COVERAGE FOR AMERICAN CHILDREN.

(a) Establishment.--Not later than 2 years after the date
of enactment of this Act, the Secretary of Health and Human
Services (in this Act referred to as the ``Secretary'') shall
establish a program to ensure that American children have
high-quality health coverage that fits their individual needs
(in this section referred to as ``the program'').
(b) Criteria for Eligibility.--The program shall ensure
that--
(1) all children eligible for medical assistance under a
State Medicaid plan under title XIX of the Social Security
Act or child health assistance under a State child health
plan under title XXI of such Act (or under a waiver of either
such plan) and whose gross family income ((as determined
without regard to the application of any general exclusion or
disregard of a block of income that is not determined by type
of expense or type of income (regardless of whether such an
exclusion or disregard is permitted under section 1902(r) of
such Act)) does not exceed 300 percent of the poverty line
(as defined in section 2110(c)(5) of the Social Security Act)
are eligible for coverage under the program; and
(2) all children who do not have health insurance coverage
(as defined in section 2791 of the Public Health Service Act)
and whose gross family income (as so determined) does not
exceed 300 percent of the poverty line (as so defined) are
eligible for coverage under the program.
(c) Benefits.--Under the program, health insurance issuers
shall offer children (who are not within a category of
individuals described in section 1937(a)(2)(B) of the Social
Security Act) private health insurance coverage that--
(1) is actuarially equivalent to the coverage requirements
for State child health plans specified in section 2103(a) of
the Social Security Act or any other health benefits coverage
that the Secretary determines will provide appropriate
coverage; and
(2) provides for total annual aggregate cost-sharing that
does not exceed 5 percent of a family's income for the year
involved.
(d) Reimbursements.--The Secretary shall establish an
annual process for awarding contracts on a competitive basis
to health insurance issuers to provide private health
insurance coverage for eligible children under the program.
Such process shall ensure that--
(1) payments to such issuers shall be determined through a
competitive bidding process;
(2) payments to such issuers shall be risk-adjusted;
(3) at least 2 plan options are available for every
eligible child; and
(4) with respect to each eligible child, each State
maintains the appropriate and equitable share of the cost of
providing health insurance coverage to the child under the
program that the State would have maintained but for the
establishment of the program.
(e) Enrollment.--The Secretary shall establish a fair and
responsible process for the enrollment, disenrollment,
termination, and changes in enrollment of eligible children
under the program and shall conduct activities to effectively
disseminate information about the program and initial
enrollment.
(f) Consumer Protections.--Health insurance issuers awarded
contracts under the program shall--
(1) provide clear information on the coverage provided by
such issuers under the program;
(2) establish meaningful procedures for hearing and
resolving of any grievances between such issuers and
enrollees that include an independent review and appeals
process for coverage denials;
(3) be licensed to provide coverage in the State in which
coverage is offered under the program; and
(4) provide market-based rates for provider reimbursements
for coverage provided under the program.
(g) Geographical Access and Quality.--The Secretary shall
establish statewide plan regions or other appropriate regions
in order to maximize competition and patient access under the
program.
(h) Option for Assistance With Employer-Sponsored
Insurance.--The Secretary shall establish procedures under
the program to provide premium assistance for children with
access to employer-sponsored health insurance coverage.
(i) Financing.--
(1) Maintenance of federal-state partnership.--The Federal
government and

[[Page S1100]]

States shall maintain their appropriate and equitable share
of premiums for providing health insurance coverage to
eligible children under the program.
(2) Additional outlays.--In the event that additional
outlays are required to carry out the program for any fiscal
year, Congress shall enact legislation to offset such outlays
by cutting non-priority spending, making government spending
more accountable and efficient, and ending wasteful
government spending.

SEC. 4. ALLOTMENT LIMITS FOR MEDICAID ADMINISTRATIVE COSTS.

Section 1903 of the Social Security Act (42 U.S.C. 1396b)
is amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by inserting ``(subject, except with respect to medical
assistance expenditures under paragraph (1), to the allotment
limits under subsection (aa))'' after ``under this title'';
and
(2) by adding at the end the following new subsection:
``(aa) State Administrative Cost Limitation.--
``(1) In general.--Payments to a State under paragraphs (2)
through (7) of subsection (a) for fiscal years beginning with
fiscal year 2009, shall not exceed, in the aggregate, an
amount equal to the State's administrative cost allotment, as
determined under this subsection.
``(2) Allotment formula.--The administrative allotment for
a State for fiscal years beginning with fiscal year 2009
shall be determined as follows:
``(A)(i) Fiscal year 2009.--For fiscal year 2009, the
administrative allotment for a State shall be an amount equal
to the Federal share of total allowable costs claimed by the
State under paragraphs (2) through (7) of subsection (a) for
calendar quarters in fiscal year 2007, determined as of
December 31, 2007, adjusted in accordance with clause (ii).
``(ii) Adjustment.--For purposes of clause (i), the amount
specified in clause (i) shall be increased by a percentage
equal to the sum of the percentages described in clause
(iii).
``(iii) Percentages described.--The percentages described
in this clause are, with respect to each consecutive 12-month
period in the 36-month period ending March 30, 2009, the
percentage change in the consumer price index (for all urban
consumers; U.S. city average).
``(B) Succeeding fiscal years.--For each fiscal year after
fiscal year 2009, the administrative allotment for a State
shall be the State's administrative allotment for the
preceding fiscal year, increased by the percentage change in
the consumer price index (for all urban consumers; U.S. city
average) for the 12-month period ending on March 30 of the
fiscal year.''.

SEC. 5. REDUCTION IN PAYMENTS FOR MEDICAID ADMINISTRATIVE
COSTS TO PREVENT DUPLICATION OF SUCH PAYMENTS
UNDER TANF.

Section 1903 of the Social Security Act (42 U.S.C. 1396b)
is amended--
(1) in subsection (a)(7), by striking ``section
1919(g)(3)(B)'' and inserting ``subsection (h)'';
(2) in subsection (a)(2)(D) by inserting ``, subject to
subsection (g)(3)(C) of such section'' after ``as are
attributable to State activities under section 1919(g)''; and
(3) by adding after subsection (g) the following new
subsection:
``(h) Reduction in Payments for Administrative Costs To
Prevent Duplication of Payments Under Title IV.--Beginning
with the calendar quarter commencing April 1, 2009, the
Secretary shall reduce the amount paid to each State under
subsection (a)(7) for each quarter by an amount equal to \1/
4\ of the annualized amount determined for the Medicaid
program under section 16(k)(2)(B) of the Food Stamp Act of
1977 (7 U.S.C. 2025(k)(2)(B)).''.

SEC. 6. ELIMINATION OF WAIVER OF CERTAIN MEDICAID PROVIDER
TAX PROVISIONS.

Effective October 1, 2009, subsection (c) of section 4722
of the Balanced Budget Act of 1997 (Public Law 105-33; 111
Stat. 515) is repealed.

SEC. 7. ELIMINATION OF SPECIAL PAYMENTS FOR CERTAIN PUBLIC
HOSPITALS.

Effective October 1, 2009, subsection (d) of section 701 of
the Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, as enacted into law by section
1(a)(6) of Public Law 106-554 (42 U.S.C. 1396r-4 note), is
repealed.
______