FamilyCare Act of 2003

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1843 Introduced in Senate (IS)]

108th CONGRESS
1st Session
S. 1843

To amend titles XIX and XXI of the Social Security Act to provide for
FamilyCare coverage for parents of enrolled children, and for other
purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

November 10, 2003

Ms. Snowe (for herself and Mr. Kennedy) introduced the following bill;
which was read twice and referred to the Committee on Finance

_______________________________________________________________________

A BILL

To amend titles XIX and XXI of the Social Security Act to provide for
FamilyCare coverage for parents of enrolled children, and for other
purposes.

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE OF TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``FamilyCare Act of
2003''.
(b) Table of Contents.--The table of contents of this Act is as
follows:

Sec. 1. Short title of title; table of contents.
Sec. 2. Renaming of title XXI program.
Sec. 3. FamilyCare coverage of parents and pregnant women under the
medicaid program and title XXI.
Sec. 4. Automatic enrollment of children born to title XXI parents.
Sec. 5. Optional coverage of legal immigrants under the medicaid
program and title XXI.
Sec. 6. Optional coverage of children through age 20 under the medicaid
program and title XXI.
Sec. 7. Application of simplified title XXI procedures under the
medicaid program.
Sec. 8. Elimination of 100 hour rule and other AFDC-related eligibility
restrictions.
Sec. 9. State grant program for market innovation.
Sec. 10. Limitations on conflicts of interest.
Sec. 11. Title XXI funding.
Sec. 12. Demonstration programs to improve medicaid and title XXI
outreach to homeless individuals and
families.
Sec. 13. Additional title XXI revisions.
Sec. 14. Effective date.

SEC. 2. RENAMING OF TITLE XXI PROGRAM.

(a) In General.--The heading of title XXI of the Social Security
Act (42 U.S.C. 1397aa et seq.) is amended to read as follows:

``TITLE XXI--FAMILYCARE PROGRAM''.

(b) Program References.--Any reference in any provision of Federal
law or regulation to ``SCHIP'' or ``State children's health insurance
program'' under title XXI of the Social Security Act shall be deemed a
reference to the FamilyCare program under such title.

SEC. 3. FAMILYCARE COVERAGE OF PARENTS AND PREGNANT WOMEN UNDER THE
MEDICAID PROGRAM AND TITLE XXI.

(a) Incentives To Implement FamilyCare Coverage.--
(1) Under medicaid.--
(A) Establishment of new optional eligibility
category.--Section 1902(a)(10)(A)(ii) of the Social
Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is
amended--
(i) by striking ``or'' at the end of
subclause (XVII);
(ii) by adding ``or'' at the end of
subclause (XVIII); and
(iii) by adding at the end the following:
``(XIX) who are individuals
described in subsection (k)(1)
(relating to parents of categorically
eligible children);''.
(B) Parents described.--Section 1902 of the Social
Security Act is further amended by inserting after
subsection (j) the following:
``(k)(1)(A) Individuals described in this paragraph are
individuals--
``(i) who are the parents of an individual who is under 19
years of age (or such higher age as the State may have elected
under section 1902(l)(1)(D) and who is eligible for medical
assistance under subsection (a)(10)(A);
``(ii) who are not otherwise eligible for medical
assistance under such subsection or under a waiver approved
under section 1115 or otherwise (except under section 1931 or
under subsection (a)(10)(A)(ii)(XIX)); and
``(iii) whose family income exceeds the effective income
level or resource level applicable under the State plan under
part A of title IV as in effect as of July 16, 1996, but does
not exceed the highest effective income level applicable to a
child in the family under this title.
``(B) In establishing an income eligibility level for individuals
described in this paragraph, a State may apply to such individuals the
highest effective income level applicable to a child in the family
under this title in order to ensure that such individuals are enrolled
in the same program as their children.
``(C) An individual may not be treated as being described in this
paragraph unless, at the time of the individual's enrollment under this
title, the child referred to in subparagraph (A)(i) of the individual
is also enrolled under this title.
``(D) In this subsection, the term `parent' has the meaning given
the term `caretaker relative' for purposes of carrying out section
1931.
``(2) In the case of a parent described in paragraph (1) who is
also the parent of a child who is eligible for child health assistance
under title XXI, the State may elect (on a uniform basis) to enroll all
such parents under this title or under title XXI.''.
(C) Enhanced matching funds available if certain
conditions met.--Section 1905 of the Social Security
Act (42 U.S.C. 1396d) is amended--
(i) in the fourth sentence of subsection
(b), by striking ``or subsection (u)(3)'' and
inserting ``, (u)(3), or (u)(4)''; and
(ii) in subsection (u)--
(I) by redesignating paragraph (4)
as paragraph (6), and
(II) by inserting after paragraph
(3) the following:
``(4) For purposes of subsection (b):
``(A) FamilyCare parents.--The expenditures described in
this subparagraph are the expenditures described in the
following clauses (i) and (ii):
``(i) Parents.--If the conditions described in
clause (iii) are met, expenditures for medical
assistance for--
``(I) parents described in section
1902(k)(1);
``(II) parents who would be
described in section 1902(k)(1) but for
the fact that they are eligible for
medical assistance under section 1931
or under a waiver approved under
section 1115 and whose family income
exceeds the effective income level
applicable under section 1931 or under
a waiver approved under section 1115 to
a family of the size involved as of
January 1, 2004; and
``(III) in the case of a State
that, as of January 1, 2004, has an
effective income level under section
1931 or under a waiver approved under
section 1115 for parents described in
section 1902(k)(1)(A)(i) that exceeds
100 percent of the poverty line,
parents described in such section whose
family income exceeds 100 percent of
the poverty line.
``(ii) Certain pregnant women.--If the conditions
described in clause (iv) are met, expenditures for
medical assistance for pregnant women described in
subsection (n) or under section 1902(l)(1)(A) in a
family the income of which exceeds the effective income
level applicable under subsection (a)(10)(A)(i)(III) or
(l)(2)(A) of section 1902 to a family of the size
involved as of January 1, 2004.
``(iii) Conditions for expenditures for parents.--
The conditions described in this clause are the
following:
``(I) The State has a State child health
plan under title XXI which (whether implemented
under such title or under this title) has an
effective income level for children that is at
least 200 percent of the poverty line.
``(II) Subject to the availability of the
State's allotments under title XXI, the State
child health plan under that title does not
limit the acceptance of applications, does not
use a waiting list for children who meet
eligibility standards to qualify for
assistance, and provides benefits to all
children in the State who apply for and meet
eligibility standards.
``(III) The State plans under this title
and title XXI do not provide coverage for
parents with higher family income without
covering parents with a lower family income.
``(IV) The State does not apply an income
level for parents that is lower than the
effective income level (expressed as a percent
of the poverty line) that has been specified
under the State plan under title XIX (including
under a waiver authorized by the Secretary or
under section 1902(r)(2)), as of January 1,
2004, to be eligible for medical assistance as
a parent under this title.
``(iv) Conditions for expenditures for certain
pregnant women.--The conditions described in this
clause are the following:
``(I) The State has established an
effective income eligibility level for pregnant
women under subsection (a)(10)(A)(i)(III) or
(l)(2)(A) of section 1902 that is at least 185
percent of the poverty line.
``(II) The State plans under this title and
title XXI do not provide coverage for pregnant
women described in subparagraph (A)(ii) with
higher family income without covering such
pregnant women with a lower family income.
``(III) The State does not apply an income
level for pregnant women that is lower than the
effective income level (expressed as a percent
of the poverty line and considering applicable
income disregards) that has been specified
under the State plan under subsection
(a)(10)(A)(i)(III) or (l)(2)(A) of section
1902, as of January 1, 2004, to be eligible for
medical assistance as a pregnant woman.
``(IV) The State satisfies the conditions
described in subclauses (I) and (II) of clause
(iii).
``(v) Definitions.--For purposes of this
subsection:
``(I) The term `parent' has the meaning
given such term for purposes of section
1902(k)(1).
``(II) The term `poverty line' has the
meaning given such term in section
2110(c)(5).''.
(D) Payment from title xxi allotment for medicaid
expansion costs; elimination of counting medicaid child
presumptive eligibility costs against title xxi
allotment.--Section 2105(a)(1) of the Social Security
Act (42 U.S.C. 1397ee(a)(1)) is amended--
(i) in the matter preceding subparagraph
(A), by striking ``(or, in the case of
expenditures described in subparagraph (B), the
Federal medical assistance percentage (as
defined in the first sentence of section
1905(b)))''; and
(ii) by striking subparagraph (B) and
inserting the following:
``(B) for the provision of medical assistance that
is attributable to expenditures described in section
1905(u)(4)(A);''.
(2) Under title xxi.--
(A) FamilyCare coverage.--Title XXI of the Social
Security Act (42 U.S.C. 1397aa et seq.) is amended by
adding at the end the following:

``SEC. 2111. OPTIONAL FAMILYCARE COVERAGE OF PARENTS OF TARGETED LOW-
INCOME CHILDREN OR TARGETED LOW-INCOME PREGNANT WOMEN.

``(a) Optional Coverage.--Notwithstanding any other provision of
this title, a State may provide for coverage, through an amendment to
its State child health plan under section 2102, of parent health
assistance for targeted low-income parents, pregnancy-related
assistance for targeted low-income pregnant women, or both, in
accordance with this section, but only if--
``(1) with respect to the provision of parent health
assistance, the State meets the conditions described in clause
(iii) of section 1905(u)(4)(A);
``(2) with respect to the provision of pregnancy-related
assistance, the State meets the conditions described in clause
(iv) of section 1905(u)(4)(A); and
``(3) in the case of parent health assistance for targeted
low-income parents, the State elects to provide medical
assistance under section 1902(a)(10)(A)(ii)(XIX), under section
1931, or under a waiver under section 1115 to individuals
described in section 1902(k)(1)(A)(i) and elects an effective
income level that, consistent with paragraphs (1)(B) and (2) of
section 1902(k), ensures that such individuals are enrolled in
the same program as their children if their children are
eligible for coverage under title XIX (including under a waiver
authorized by the Secretary or under section 1902(r)(2)).''.
``(b) Definitions.--For purposes of this title:
``(1) Parent health assistance.--The term `parent health
assistance' has the meaning given the term child health
assistance in section 2110(a) as if any reference to targeted
low-income children were a reference to targeted low-income
parents.
``(2) Parent.--The term `parent' has the meaning given the
term `caretaker relative' for purposes of carrying out section
1931.
``(3) Pregnancy-related assistance.--The term `pregnancy-
related assistance' has the meaning given the term child health
assistance in section 2110(a) as if any reference to targeted
low-income children were a reference to targeted low-income
pregnant women, except that the assistance shall be limited to
services related to pregnancy (which include prenatal,
delivery, and postpartum services) and to other conditions that
may complicate pregnancy.
``(4) Targeted low-income parent.--The term `targeted low-
income parent' has the meaning given the term targeted low-
income child in section 2110(b) as if the reference to a child
were deemed a reference to a parent (as defined in paragraph
(3)) of the child; except that in applying such section--
``(A) there shall be substituted for the income
level described in paragraph (1)(B)(ii)(I) the
applicable income level in effect for a targeted low-
income child;
``(B) in paragraph (3), January 1, 2004, shall be
substituted for July 1, 1997; and
``(C) in paragraph (4), January 1, 2004, shall be
substituted for March 31, 1997.
``(5) Targeted low-income pregnant woman.--The term
`targeted low-income pregnant woman' means a woman--
``(A) during pregnancy and through the end of the
month in which the 60-day period (beginning on the last
day of her pregnancy) ends;
``(B) whose family income exceeds the effective
income level (expressed as a percent of the poverty
line and considering applicable income disregards) that
has been specified under subsection (a)(10)(A)(i)(III)
or (l)(2)(A) of section 1902, as of January 1, 2002, to
be eligible for medical assistance as a pregnant woman
under title XIX but does not exceed the income
eligibility level established under the State child
health plan under this title for a targeted low-income
child; and
``(C) who satisfies the requirements of paragraphs
(1)(A), (1)(C), (2), and (3) of section 2110(b).
``(c) References to Terms and Special Rules.--In the case of, and
with respect to, a State providing for coverage of parent health
assistance to targeted low-income parents or pregnancy-related
assistance to targeted low-income pregnant women under subsection (a),
the following special rules apply:
``(1) Any reference in this title (other than in subsection
(b)) to a targeted low-income child is deemed to include a
reference to a targeted low-income parent or a targeted low-
income pregnant woman (as applicable).
``(2) Any such reference to child health assistance--
``(A) with respect to such parents is deemed a
reference to parent health assistance; and
``(B) with respect to such pregnant women, is
deemed a reference to pregnancy-related assistance.
``(3) In applying section 2103(e)(3)(B) in the case of a
family or pregnant woman provided coverage under this section,
the limitation on total annual aggregate cost-sharing shall be
applied to the entire family or such pregnant woman.
``(4) In applying section 2110(b)(4), any reference to
`section 1902(l)(2) or 1905(n)(2) (as selected by a State)' is
deemed a reference to the effective income level applicable to
parents under section 1931 or under a waiver approved under
section 1115, or, in the case of a pregnant woman, the income
level established under section 1902(l)(2)(A).
``(5) In applying section 2102(b)(3)(B), any reference to
children found through screening to be eligible for medical
assistance under the State medicaid plan under title XIX is
deemed a reference to parents and pregnant women.
``(6) With respect to a targeted low-income parent or a
targeted low-income pregnant woman, there shall be no exclusion
of benefits for services based on any preexisting condition.''.
(B) Additional allotment for states providing
coverage of parents or pregnant women.--
(i) In general.--Section 2104 of the Social
Security Act (42 U.S.C. 1397dd) is amended by
inserting after subsection (c) the following:
``(d) Additional Allotments for State Coverage of Parents or
Pregnant Women.--
``(1) Appropriation; total allotment.--For the purpose of
providing additional allotments to States under this title,
there is appropriated, out of any money in the Treasury not
otherwise appropriated--
``(A) for fiscal year 2005, $5,000,000,000;
``(B) for each of fiscal years 2006 and 2007,
$6,000,000,000; and
``(C) for each of fiscal years 2008 through 2011,
$7,000,000,000.
``(2) State and territorial allotments.--
``(A) In general.--In addition to the allotments
provided under subsections (b) and (c), subject to
paragraphs (3) and (4), of the amount available for the
additional allotments under paragraph (1) for a fiscal
year, the Secretary shall allot to each State with a
State child health plan approved under this title--
``(i) in the case of such a State other
than a commonwealth or territory described in
clause (ii), the same proportion as the
proportion of the State's allotment under
subsection (b) (determined without regard to
subsection (f)) to the total amount of the
allotments under subsection (b) for such States
eligible for an allotment under this paragraph
for such fiscal year; and
``(ii) in the case of a commonwealth or
territory described in subsection (c)(3), the
same proportion as the proportion of the
commonwealth's or territory's allotment under
subsection (c) (determined without regard to
subsection (f)) to the total amount of the
allotments under subsection (c) for
commonwealths and territories eligible for an
allotment under this paragraph for such fiscal
year.
``(B) Availability and redistribution of unused
allotments.--In applying subsections (e) and (f) with
respect to additional allotments made available under
this subsection, the procedures established under such
subsections shall ensure such additional allotments are
only made available to States which have elected to
provide coverage under section 2111.
``(3) Use of additional allotment.--Additional allotments
provided under this subsection are not available for amounts
expended before October 1, 2004. Such amounts are available for
amounts expended on or after such date for child health
assistance for targeted low-income children, as well as for
parent health assistance for targeted low-income parents, and
pregnancy-related assistance for targeted low-income pregnant
women.
``(4) Requiring election to provide coverage.--No payments
may be made to a State under this title from an allotment
provided under this subsection unless the State has made an
election to provide parent health assistance for targeted low-
income parents, or pregnancy-related assistance for targeted
low-income pregnant women.''.
(ii) Conforming amendments.--Section 2104
of the Social Security Act (42 U.S.C. 1397dd)
is amended--
(I) in subsection (a), by inserting
``subject to subsection (d),'' after
``under this section,'';
(II) in subsection (b)(1), by
inserting ``and subsection (d)'' after
``Subject to paragraph (4)''; and
(III) in subsection (c)(1), by
inserting ``subject to subsection
(d),'' after ``for a fiscal year,''.
(C) No cost-sharing for pregnancy-related
benefits.--Section 2103(e)(2) of the Social Security
Act (42 U.S.C. 1397cc(e)(2)) is amended--
(i) in the heading, by inserting ``and
pregnancy-related services'' after ``preventive
services''; and
(ii) by inserting before the period at the
end the following: ``and for pregnancy-related
services''.
(b) Optional Application of Presumptive Eligibility Provisions to
Parents.--Section 1920A of the Social Security Act (42 U.S.C. 1396r-1a)
is amended by adding at the end the following:
``(e) A State may elect to apply the previous provisions of this
section to provide for a period of presumptive eligibility for medical
assistance for a parent (as defined for purposes of section 1902(k)(1))
of a child with respect to whom such a period is provided under this
section.''.
(c) Incentive Payments for Expansion of Coverage to Parents and
Pregnant Women.--Section 1903 of the Social Security Act (42 U.S.C.
1396b) is amended by adding at the end the following:
``(x) Incentive Payments for Expansion of Coverage of Parents and
Pregnant Women.--
``(1) Authority to make payments.--With respect to fiscal
year 2005 or 2006, the Secretary shall, in addition to any
other payments made to a State under this section for such
fiscal year, pay each State an amount equal to the FamilyCare
expansion incentive payment payable to the State under this
subsection for the fiscal year.
``(2) Familycare expansion incentive payment.--Subject to
paragraph (3), the FamilyCare expansion incentive payment for a
FamilyCare expansion State for each of fiscal years 2005 and
2006 is equal to the product of--
``(A) $1,000,000,000; and
``(B) the ratio (expressed as a percentage) of--
``(i) with respect to such a State--
``(I) the total number of parents
or pregnant women who are provided
parent health assistance or pregnancy-
related assistance under this title or
title XXI only under section
1902(a)(10)(ii)(XIX) or section 2111 in
the State during the fiscal year;
multiplied by
``(II) the total number of months
that such parents or pregnant women are
provided such assistance during the
fiscal year in the State; to
``(ii) the product of--
``(I) the total number of such
parents or pregnant women who are
provided such assistance during the
fiscal year in all such States;
multiplied by
``(II) the total number of months
that all such parents or pregnant women
are provided such assistance during the
fiscal year in all such States.
``(3) Limitation.--The FamilyCare expansion incentive
payment for a FamilyCare expansion State for a fiscal year may
not exceed the State share of the total amount of expenditures
incurred by the State for that fiscal year for providing parent
health assistance or pregnancy-related assistance under this
title or title XXI to parents or pregnant women under section
1902(a)(10)(ii)(XIX) or section 2111. Any amount that is not
paid to a State after the application of the preceding sentence
for a fiscal year, subject to the preceding sentence, first
shall be available for making FamilyCare expansion incentive
payments to other FamilyCare expansion States for that fiscal
year and any remaining amount shall be transferred in
accordance with paragraph (5).
``(4) Advance payment; retrospective adjustment.--The
Secretary may make FamilyCare expansion incentive payments
under this subsection for each quarter of fiscal years 2005 and
2006 on the basis of advance estimates of expenditures
submitted by the State and such other investigation as the
Secretary may find necessary, and may reduce or increase the
amount of such payments as necessary to adjust for any
overpayment or underpayment for prior quarters.
``(5) Transfer of unused funds to additional allotments for
familycare.--Any amounts that are not paid under this
subsection for a fiscal year are hereby transferred and made
available for allotment under section 2104(d) for the
succeeding fiscal year.''.
(d) Conforming Amendments.--
(1) Eligibility categories.--Section 1905(a) of the Social
Security Act (42 U.S.C. 1396d(a)) is amended, in the matter
before paragraph (1)--
(A) by striking ``or'' at the end of clause (xii);
(B) by inserting ``or'' at the end of clause
(xiii); and
(C) by inserting after clause (xiii) the following:
``(xiv) who are parents described (or treated as if
described) in section 1902(k)(1),''.
(2) Income limitations.--Section 1903(f)(4) of the Social
Security Act (42 U.S.C. 1396b(f)(4)) is amended by inserting
``1902(a)(10)(A)(ii)(XIX),'' after
``1902(a)(10)(A)(ii)(XVIII),''.
(3) Conforming amendment relating to no waiting period for
pregnant women.--Section 2102(b)(1)(B) of the Social Security
Act (42 U.S.C. 1397bb(b)(1)(B)) is amended--
(A) by striking ``, and'' at the end of clause (i)
and inserting a semicolon;
(B) by striking the period at the end of clause
(ii) and inserting ``; and''; and
(C) by adding at the end the following:
``(iii) may not apply a waiting period
(including a waiting period to carry out
paragraph (3)(C)) in the case of a targeted
low-income parent who is pregnant.''.

SEC. 4. AUTOMATIC ENROLLMENT OF CHILDREN BORN TO TITLE XXI PARENTS.

(a) Title XXI.--Section 2102(b)(1) of the Social Security Act (42
U.S.C. 1397bb(b)(1)) is amended by adding at the end the following:
``(C) Automatic eligibility of children born to
parents or pregnant women.--Such eligibility standards
shall provide for automatic coverage of a child born to
an individual who is provided assistance under this
title in the same manner as medical assistance would be
provided under section 1902(e)(4) to a child described
in such section.''.
(b) Conforming Amendment to Medicaid.--Section 1902(e)(4) (42
U.S.C. 1396a(e)(4)) is amended in the first sentence by striking ``so
long as the child is a member of the woman's household and the woman
remains (or would remain if pregnant) eligible for such assistance''.

SEC. 5. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE MEDICAID
PROGRAM AND TITLE XXI.

(a) Medicaid Program.--Section 1903(v) of the Social Security Act
(42 U.S.C. 1396b(v)) is amended--
(1) in paragraph (1), by striking ``paragraph (2)'' and
inserting ``paragraphs (2) and (4)''; and
(2) by adding at the end the following:
``(4)(A) A State may elect (in a plan amendment under this title)
to provide medical assistance under this title for aliens who are
lawfully residing in the United States (including battered aliens
described in section 431(c) of the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996) and who are otherwise eligible
for such assistance, within any of the following eligibility
categories:
``(i) Pregnant women.--Women during pregnancy (and during
the 60-day period beginning on the last day of the pregnancy).
``(ii) Children.--Children (as defined under such plan),
including optional targeted low-income children described in
section 1905(u)(2)(B).
``(iii) Parents.--If the State has elected the eligibility
category described in clause (ii), caretaker relatives who are
parents (including individuals treated as a caregiver for
purposes of carrying out section 1931) of children (described
in such clause or otherwise) who are eligible for medical
assistance under the plan.
``(B)(i) In the case of a State that has elected to provide medical
assistance to a category of aliens under subparagraph (A), no debt
shall accrue under an affidavit of support against any sponsor of such
an alien on the basis of provision of assistance to such category and
the cost of such assistance shall not be considered as an unreimbursed
cost.
``(ii) The provisions of sections 401(a), 402(b), 403, and 421 of
the Personal Responsibility and Work Opportunity Reconciliation Act of
1996 shall not apply to a State that makes an election under
subparagraph (A).''.
(b) Title XXI.--Section 2107(e)(1) of the Social Security Act (42
U.S.C. 1397gg(e)(1)) is amended by adding at the end the following:
``(E) Section 1903(v)(4) (relating to optional
coverage of categories of lawful resident alien
pregnant women, children, and parents), but only with
respect to an eligibility category under this title, if
the same eligibility category has been elected under
such section for purposes of title XIX.''.

SEC. 6. OPTIONAL COVERAGE OF CHILDREN THROUGH AGE 20 UNDER THE MEDICAID
PROGRAM AND TITLE XXI.

(a) Medicaid.--
(1) In general.--Section 1902(l)(1)(D) of the Social
Security Act (42 U.S.C. 1396a(l)(1)(D)) is amended by inserting
``(or, at the election of a State, 20 or 21 years of age)''
after ``19 years of age''.
(2) Conforming amendments.--
(A) Section 1902(e)(3)(A) of the Social Security
Act (42 U.S.C. 1396a(e)(3)(A)) is amended by inserting
``(or 1 year less than the age the State has elected
under subsection (l)(1)(D))'' after ``18 years of
age''.
(B) Section 1902(e)(12) of the Social Security Act
(42 U.S.C. 1396a(e)(12)) is amended by inserting ``or
such higher age as the State has elected under
subsection (l)(1)(D)'' after ``19 years of age''.
(C) Section 1920A(b)(1) of the Social Security Act
(42 U.S.C. 1396r-1a(b)(1)) is amended by inserting ``or
such higher age as the State has elected under section
1902(l)(1)(D)'' after ``19 years of age''.
(D) Section 1928(h)(1) of the Social Security Act
(42 U.S.C. 1396s(h)(1)) is amended by inserting ``or 1
year less than the age the State has elected under
section 1902(l)(1)(D)'' before the period at the end.
(E) Section 1932(a)(2)(A) of the Social Security
Act (42 U.S.C. 1396u-2(a)(2)(A)) is amended by
inserting ``(or such higher age as the State has
elected under section 1902(l)(1)(D))'' after ``19 years
of age''.
(b) Title XXI.--Section 2110(c)(1) of the Social Security Act (42
U.S.C. 1397jj(c)(1)) is amended by inserting ``(or such higher age as
the State has elected under section 1902(l)(1)(D))''.

SEC. 7. APPLICATION OF SIMPLIFIED TITLE XXI PROCEDURES UNDER THE
MEDICAID PROGRAM.

(a) Application Under Medicaid.--
(1) In general.--Section 1902(l) of the Social Security Act
(42 U.S.C. 1396a(l)) is amended--
(A) in paragraph (3), by inserting ``subject to
paragraph (5)'', after ``Notwithstanding subsection
(a)(17),''; and
(B) by adding at the end the following:
``(5) With respect to determining the eligibility of individuals
under 19 years of age (or such higher age as the State has elected
under paragraph (1)(D)) for medical assistance under subsection
(a)(10)(A) and, separately, with respect to determining the eligibility
of individuals for medical assistance under subsection
(a)(10)(A)(i)(VIII) or (a)(10)(A)(ii)(XIX), notwithstanding any other
provision of this title, if the State has established a State child
health plan under title XXI--
``(A) the State may not apply a resource standard;
``(B) the State shall use the same simplified eligibility
form (including, if applicable, permitting application other
than in person) as the State uses under such State child health
plan with respect to such individuals;
``(C) the State shall provide for initial eligibility
determinations and redeterminations of eligibility using
verification policies, forms, and frequency that are no less
restrictive than the policies, forms, and frequency the State
uses for such purposes under such State child health plan with
respect to such individuals; and
``(D) the State shall not require a face-to-face interview
for purposes of initial eligibility determinations and
redeterminations unless the State requires such an interview
for such purposes under such child health plan with respect to
such individuals.''.
(2) Effective date.--The amendments made by paragraph (1)
apply to determinations of eligibility made on or after the
date that is 1 year after the date of the enactment of this
Act, whether or not regulations implementing such amendments
have been issued.
(b) Presumptive Eligibility.--
(1) In general.--Section 1920A(b)(3)(A)(i) of the Social
Security Act (42 U.S.C. 1396r-1a(b)(3)(A)(i)) is amended by
inserting ``a child care resource and referral agency,'' after
``a State or tribal child support enforcement agency,''.
(2) Application to presumptive eligibility for pregnant
women under medicaid.--Section 1920(b) of the Social Security
Act (42 U.S.C. 1396r-1(b)) is amended by adding at the end
after and below paragraph (2) the following flush sentence:
``The term `qualified provider' includes a qualified entity as defined
in section 1920A(b)(3).''.
(3) Application under title xxi.--
(A) In general.--Section 2107(e)(1)(D) of the
Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended
to read as follows:
``(D) Sections 1920 and 1920A (relating to
presumptive eligibility).''.
(B) Conforming elimination of resource test.--
Section 2102(b)(1)(A) of such Act (42 U.S.C.
1397bb(b)(1)(A)) is amended--
(i) by striking `` and resources (including
any standards relating to spenddowns and
disposition of resources)''; and
(ii) by adding at the end the following:
``Effective 1 year after the date of the
enactment of the FamilyCare Act of 2003, such
standards may not include the application of a
resource standard or test.''.
(c) Automatic Reassessment of Eligibility for Title XXI and
Medicaid Benefits for Children Losing Medicaid or Title XXI
Eligibility.--
(1) Loss of medicaid eligibility.--Section 1902(a) of the
Social Security Act (42 U.S.C. 1396a(a)) is amended--
(A) by striking the period at the end of paragraph
(65) and inserting ``; and'', and
(B) by inserting after paragraph (65) the
following:
``(66) provide, in the case of a State with a State child
health plan under title XXI, that before medical assistance to
a child (or a parent of a child) is discontinued under this
title, a determination of whether the child (or parent) is
eligible for benefits under title XXI shall be made and, if
determined to be so eligible, the child (or parent) shall be
automatically enrolled in the program under such title without
the need for a new application.''.
(2) Loss of title xxi eligibility and coordination with
medicaid.--Section 2102(b) of the Social Security Act (42
U.S.C. 1397bb(b)) is amended--
(A) in paragraph (3), by redesignating
subparagraphs (D) and (E) as subparagraphs (E) and (F),
respectively, and by inserting after subparagraph (C)
the following:
``(D) that before health assistance to a child (or
a parent of a child) is discontinued under this title,
a determination of whether the child (or parent) is
eligible for benefits under title XIX is made and, if
determined to be so eligible, the child (or parent) is
automatically enrolled in the program under such title
without the need for a new application;'';
(B) by redesignating paragraph (4) as paragraph
(5); and
(C) by inserting after paragraph (3) the following
new paragraph:
``(4) Coordination with medicaid.--The State shall
coordinate the screening and enrollment of individuals under
this title and under title XIX consistent with the following:
``(A) Information that is collected under this
title or under title XIX which is needed to make an
eligibility determination under the other title shall
be transmitted to the appropriate administering entity
under such other title in a timely manner so that
coverage is not delayed and families do not have to
submit the same information twice. Families shall be
provided the information they need to complete the
application process for coverage under both titles and
be given appropriate notice of any determinations made
on their applications for such coverage.
``(B) If a State does not use a joint application
under this title and such title, the State shall--
``(i) promptly inform a child's parent or
caretaker in writing and, if appropriate,
orally, that a child has been found likely to
be eligible under title XIX;
``(ii) provide the family with an
application for medical assistance under such
title and offer information about what (if any)
further information, documentation, or other
steps are needed to complete such application
process;
``(iii) offer assistance in completing such
application process; and
``(iv) promptly transmit the separate
application under this title or the information
obtained through such application, and all
other relevant information and documentation,
including the results of the screening process,
to the State agency under title XIX for a final
determination on eligibility under such title.
``(C) Applicants are notified in writing of--
``(i) benefits (including restrictions on
cost-sharing) under title XIX; and
``(ii) eligibility rules that prohibit
children who have been screened eligible for
medical assistance under such title from being
enrolled under this title, other than
provisional temporary enrollment while a final
eligibility determination is being made under
such title.
``(D) If the agency administering this title is
different from the agency administering a State plan
under title XIX, such agencies shall coordinate the
screening and enrollment of applicants for such
coverage under both titles.
``(E) The coordination procedures established
between the program under this title and under title
XIX shall apply not only to the initial eligibility
determination of a family but also to any renewals or
redeterminations of such eligibility.''.
(d) Provision of Medicaid and CHIP Applications and Information
Under the School Lunch Program.--Section 9(b)(2)(B) of the Richard B.
Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(B)) is
amended--
(1) by striking ``(B) Applications'' and inserting ``(B)(i)
Applications''; and
(2) by adding at the end the following:
``(ii)(I) Applications for free and reduced price lunches that are
distributed pursuant to clause (i) to parents or guardians of children
in attendance at schools participating in the school lunch program
under this Act shall also contain information on the availability of
medical assistance under title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) and of child health and FamilyCare assistance
under title XXI of such Act, including information on how to obtain an
application for assistance under such programs.
``(II) Information on the programs referred to in subclause (I)
shall be provided on a form separate from the application form for free
and reduced price lunches under clause (i).''.
(e) 12-Months Continuous Eligibility.--
(1) Medicaid.--Section 1902(e)(12) of the Social Security
Act (42 U.S.C. 1396a(e)(12)) is amended--
(A) by striking ``At the option of the State, the
plan may'' and inserting ``The plan shall'';
(B) by striking ``an age specified by the State
(not to exceed 19 years of age)'' and inserting ``19
years of age (or such higher age as the State has
elected under subsection (l)(1)(D)) or, at the option
of the State, who is eligible for medical assistance as
the parent of such a child''; and
(C) in subparagraph (A), by striking ``a period
(not to exceed 12 months) '' and inserting ``the 12-
month period beginning on the date''.
(2) Title xxi.--Section 2102(b)(2) of such Act (42 U.S.C.
1397bb(b)(2)) is amended by adding at the end the following:
``Such methods shall provide 12-months continuous eligibility
for children under this title in the same manner that section
1902(e)(12) provides 12-months continuous eligibility for
children described in such section under title XIX. If a State
has elected to apply section 1902(e)(12) to parents, such
methods may provide 12-months continuous eligibility for
parents under this title in the same manner that such section
provides 12-months continuous eligibility for parents described
in such section under title XIX.''.

SEC. 8. ELIMINATION OF 100 HOUR RULE AND OTHER AFDC-RELATED ELIGIBILITY
RESTRICTIONS.

(a) In General.--Section 1931(b)(1)(A)(ii) of the Social Security
Act (42 U.S.C. 1396u-1(b)(1)(A)(ii)) is amended by inserting ``other
than the requirement that the child be deprived of parental support or
care by reason of the death, continued absence from the home,
incapacity, or unemployment of a parent,'' after ``section 407(a),''.
(b) Conforming Amendment.--Section 1905(a) of the Social Security
Act (42 U.S.C. 1396d(a)) is amended, in the matter before paragraph
(1), in clause (ii), by striking ``if such child is (or would, if
needy, be) a dependent child under part A of title IV''.

SEC. 9. STATE GRANT PROGRAM FOR MARKET INNOVATION.

(a) In General.--The Secretary of Health and Human Services (in
this section referred to as the ``Secretary'') shall establish a
program (in this section referred to as the ``program'') to award
demonstration grants under this section to States to allow States to
demonstrate the effectiveness of innovative ways to increase access to
health insurance through market reforms and other innovative means.
Such innovative means may include any of the following:
(1) Alternative group purchasing or pooling arrangements,
such as purchasing cooperatives for small businesses,
reinsurance pools, or high risk pools.
(2) Individual or small group market reforms.
(3) Consumer education and outreach.
(4) Subsidies to individuals, employers, or both, in
obtaining health insurance.
(b) Scope; Duration.--The program shall be limited to not more than
10 States and to a total period of 5 years, beginning on the date the
first demonstration grant is made.
(c) Conditions for Demonstration Grants.--
(1) In general.--The Secretary may not provide for a
demonstration grant to a State under the program unless the
Secretary finds that under the proposed demonstration grant--
(A) the State will provide for demonstrated
increase of access for some portion of the existing
uninsured population through a market innovation (other
than merely through a financial expansion of a program
initiated before the date of the enactment of this Act);
(B) the State will comply with applicable Federal
laws;
(C) the State will not discriminate among
participants on the basis of any health status-related
factor (as defined in section 2791(d)(9) of the Public
Health Service Act (42 U.S.C. 300gg-91(d)(9)), except
to the extent a State wishes to focus on populations
that otherwise would not obtain health insurance
because of such factors; and
(D) the State will provide for such evaluation, in
coordination with the evaluation required under
subsection (d), as the Secretary may specify.
(2) Application.--The Secretary shall not provide a
demonstration grant under the program to a State unless--
(A) the State submits to the Secretary such an
application, in such a form and manner, as the
Secretary specifies;
(B) the application includes information regarding
how the demonstration grant will address issues such as
governance, targeted population, expected cost, and the
continuation after the completion of the demonstration
grant period; and
(C) the Secretary determines that the demonstration
grant will be used consistent with this section.
(3) Focus.--A demonstration grant proposal under this
section need not cover all uninsured individuals in a State or
all health care benefits with respect to such individuals.
(d) Evaluation.--The Secretary shall enter into a contract with an
appropriate entity outside the Department of Health and Human Services
to conduct an overall evaluation of the program at the end of the
program period. Such evaluation shall include an analysis of
improvements in access, costs, quality of care, or choice of coverage,
under different demonstration grants.
(e) Option To Provide for Initial Planning Grants.--Notwithstanding
the previous provisions of this section, under the program the
Secretary may provide for a portion of the amounts appropriated under
subsection (f) (not to exceed $5,000,000) to be made available to any
State for initial planning grants to permit States to develop
demonstration grant proposals under the previous provisions of this
section.
(f) Authorization of Appropriations.--There are authorized to be
appropriated $100,000,000 for each fiscal year beginning with fiscal
year 2004 to carry out this section. Amounts appropriated under this
subsection shall remain available until expended.
(g) State Defined.--In this section, the term ``State'' has the
meaning given such term for purposes of title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.).

SEC. 10. LIMITATIONS ON CONFLICTS OF INTEREST.

(a) Limitation on Conflicts of Interest in Marketing Activities.--
(1) Title xxi.--Section 2105(c) of the Social Security Act
(42 U.S.C. 300aa-5(c)) is amended by adding at the end the
following:
``(8) Limitation on expenditures for marketing
activities.--Amounts expended by a State for the use of an
administrative vendor in marketing health benefits coverage to
low-income children under this title shall not be considered,
for purposes of subsection (a)(2)(D), to be reasonable costs to
administer the plan unless the following conditions are met
with respect to the vendor:
``(A) The vendor is independent of any entity
offering the coverage in the same area of the State in
which the vendor is conducting marketing activities.
``(B) No person who is an owner, employee,
consultant, or has a contract with the vendor either
has any direct or indirect financial interest with such
an entity or has been excluded from participation in
the program under this title or title XVIII or XIX or
debarred by any Federal agency, or subject to a civil
money penalty under this Act.''.
(b) Prohibition of Affiliation With Debarred Individuals.--
(1) Medicaid.--Section 1903(i) of the Social Security Act
(42 U.S.C. 1396b(i))is amended--
(A) by striking the period at the end of paragraph
(20) and inserting ``; or''; and
(B) by inserting after paragraph (20) the
following:
``(21) with respect to any amounts expended for an entity
that receives payments under the plan unless--
``(A) no person with an ownership or control
interest (as defined in section 1124(a)(3)) in the
entity is a person that is debarred, suspended, or
otherwise excluded from participating in procurement or
non-procurement activities under the Federal
Acquisition Regulation; and
``(B) such entity has not entered into an
employment, consulting, or other agreement for the
provision of items or services that are material to
such entity's obligations under the plan with a person
described in subparagraph (A).''.
(2) Title xxi.--Section 2107(e)(1) of the Social Security
Act (42 U.S.C. 1397gg(e)(1)), as amended by sections 5(b) and
7(b)(3), is further amended--
(A) in subparagraph (B), by striking ``and (17)''
and inserting ``(17), and (21)''; and
(B) by adding at the end the following:
``(F) Section 1902(a)(67) (relating to prohibition
of affiliation with debarred individuals).''.

SEC. 11. TITLE XXI FUNDING.

(a) Elimination of ``Dip'' and Extension of Funding.--Section
2104(a) of the Social Security Act (42 U.S.C. 1397dd(a)) is amended--
(1) in paragraph (7), by striking ``$3,150,000,000;'' and
inserting ``$4,150,000,000; and''; and
(2) by striking paragraphs (8) through (10) and inserting
the following:
``(8) for each of fiscal years 2005 through 2011,
$5,000,000,000.''.
(b) Effective Date.--The amendments made by this section shall be
effective as if this section had been enacted on October 1, 2003.

SEC. 12. DEMONSTRATION PROGRAMS TO IMPROVE MEDICAID AND TITLE XXI
OUTREACH TO HOMELESS INDIVIDUALS AND FAMILIES.

(a) Authority.--The Secretary of Health and Human Services may
award demonstration grants to not more than 7 States (or other
qualified entities) to conduct innovative programs that are designed to
improve outreach to homeless individuals and families under the
programs described in subsection (b) with respect to enrollment of such
individuals and families under such programs and the provision of
services (and coordinating the provision of such services) under such
programs.
(b) Programs for Homeless Described.--The programs described in
this subsection are as follows:
(1) Medicaid.--The program under title XIX of the Social
Security Act (42 U.S.C. 1396 et seq.).
(2) CHIP.--The program under title XXI of the Social
Security Act (42 U.S.C. 1397aa et seq.).
(3) TANF.--The program under part of A of title IV of the
Social Security Act (42 U.S.C. 601 et seq.).
(4) SAMHSA block grants.--The program of grants under part
B of title XIX of the Public Health Service Act (42 U.S.C.
300x-1 et seq.).
(5) Food stamp program.--The program under the Food Stamp
Act of 1977 (7 U.S.C. 2011 et seq.).
(6) Workforce investment act.--The program under the
Workforce Investment Act of 1999 (29 U.S.C. 2801 et seq.).
(7) Welfare-to-work.--The welfare-to-work program under
section 403(a)(5) of the Social Security Act (42 U.S.C.
603(a)(5)).
(8) Other programs.--Other public and private benefit
programs that serve low-income individuals.
(c) Appropriations.--For the purposes of carrying out this section,
there is appropriated for fiscal year 2004, out of any funds in the
Treasury not otherwise appropriated, $10,000,000, to remain available
until expended.

SEC. 13. ADDITIONAL TITLE XXI REVISIONS.

(a) Limiting Cost-Sharing to 2.5 Percent for Families With Income
Below 150 Percent of Poverty.--Section 2103(e)(3)(A) of the Social
Security Act (42 U.S.C. 1397cc(e)(3)(A)) is amended--
(1) by striking ``and'' at the end of clause (i);
(2) by striking the period at the end of clause (ii) and
inserting ``; and''; and
(3) by adding at the end the following new clause:
``(iii) total annual aggregate cost-sharing
described in clauses (i) and (ii) with respect
to all such targeted low-income children in a
family under this title that exceeds 2.5
percent of such family's income for the year
involved.''.
(b) Reporting of Enrollment Data.--
(1) Quarterly reports.--Section 2107(b)(1) of such Act (42
U.S.C. 1397gg(b)(1)) is amended by adding at the end the
following: ``In quarterly reports on enrollment required under
this paragraph, a State shall include information on the age,
gender, race, ethnicity, service delivery system, and family
income of individuals enrolled.''.
(2) Annual reports.--Section 2108(b)(1)(B)(i) of such Act
(42 U.S.C. 1397hh(b)(1)(B)(i)) is amended by inserting
``primary language of enrollees,'' after ``family income,''.
(c) Employer Coverage Waiver Changes.--Section 2105(c)(3) of such
Act (42 U.S.C. 1397ee(c)(3)) is amended--
(1) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii) and indenting appropriately;
(2) by designating the matter beginning with ``Payment may
be made'' as a subparagraph (A) with the heading ``In general''
and indenting appropriately; and
(3) by adding at the end the following new subparagraph:
``(B) Application of requirements.--In carrying out
subparagraph (A)--
``(i) the Secretary shall not require a
minimum employer contribution level that is
separate from the requirement of cost-
effectiveness under subparagraph (A)(i), but a
State shall identify a reasonable minimum
employer contribution level that is based on
data demonstrating that such a level is
representative to the employer-sponsored
insurance market in the State and shall monitor
employer contribution levels over time to
determine whether substitution is occurring and
report the findings in annual reports under
section 2108(a);
``(ii) the State shall establish a waiting
period of at least 6 months without group
health coverage, but may establish reasonable
exceptions to such period and shall not apply
such a waiting period to a child who is
provided coverage under a group health plan
under section 1906;
``(iii) subject to clause (iv), the State
shall provide satisfactory assurances that the
minimum benefits and cost-sharing protections
established under this title are provided,
either through the coverage under subparagraph
(A) or as a supplement to such coverage; and
``(iv) coverage under such subparagraph
shall not be considered to violate clause (iii)
because it does not comply with requirements
relating to reviews of health service decisions
if the enrollee involved is provided the option
of being provided benefits directly under this
title.''.

SEC. 14. EFFECTIVE DATE.

Except as otherwise provided in this Act, this Act and the
amendments made by this Act take effect on October 1, 2004, without
regard to whether regulations implementing this Act or such amendments
have been issued.
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