[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2923 Introduced in Senate (IS)]







106th CONGRESS
  2d Session
                                S. 2923

 To amend title 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

                             July 26, 2000

 Mr. Kennedy (for himself, Mr. Rockefeller, Mr. Daschle, Mr. Moynihan, 
   Mr. Reed, Mr. L. Chafee, Ms. Collins, Ms. Snowe, Mr. Baucus, Mr. 
 Breaux, Mr. Conrad, Mr. Graham, Mr. Bryan, Mr. Kerrey, Mr. Robb, Mr. 
    Inouye, Mr. Lautenberg, Mr. Akaka, Mr. Schumer, and Mr. Leahy) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend title 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``FamilyCare Act of 
2000''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Renaming of title XXI program.
Sec. 3. FamilyCare coverage of parents 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. Improving welfare-to-work transition under the medicaid 
                            program.
Sec. 9. Elimination of 100 hour rule and other AFDC-related eligibility 
                            restrictions.
Sec. 10. State grant program for market innovation.
Sec. 11. Limitations on conflicts of interest.
Sec. 12. Increase in CHIP allotment for each of fiscal years 2002 
                            through 2004.
Sec. 13. Demonstration programs to improve medicaid and chip outreach 
                            to homeless individuals and families.
Sec. 14. Authority to pay medicaid expansion costs from title XXI 
                            appropriation.

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 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 (XVI);
                            (ii) by adding ``or'' at the end of 
                        subclause (XVII); and
                            (iii) by adding at the end the following 
                        new subclause:
                                    ``(XVIII) who are parents described 
                                in subsection (k)(1), but only if the 
                                State meets the conditions described in 
                                subsection (k)(2);''.
                    (B) Conditions for coverage.--Section 1902 of such 
                Act is further amended by inserting after subsection 
                (j) the following new subsection:
    ``(k)(1)(A) Parents described in this paragraph 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 
and enrolled for medical assistance under subsection (a)(10)(A), if--
            ``(i) such parents are not otherwise eligible for such 
        assistance under such subsection; and
            ``(ii) the income of the family that includes such parents 
        does not exceed an income level specified by the State 
        consistent with paragraph (2)(B).
    ``(B) In this subsection, the term `parent' has the meaning given 
the term `caretaker' for purposes of carrying out section 1931.
    ``(2) The conditions for a State to provide medical assistance 
under subsection (a)(10)(A)(ii)(XVIII) are as follows:
            ``(A) The State has a State child health plan under title 
        XXI which (whether implemented under such title or under this 
        title)--
                    ``(i) has an income standard (or will establish an 
                income standard that is effective at the time 
                additional allotments are available to the State under 
                section 2104(d), as amended by the FamilyCare Act of 
                2000) for children that is at least 200 percent of the 
                poverty line; and
                    ``(ii) 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.
            ``(B) The income level specified under paragraph (1)(A)(ii) 
        for parents in a family exceeds the income level applicable 
        under section 1931 but does not exceed the highest income level 
        applicable to a child in the family under this title. A State 
        may not cover such parents with higher family income without 
        covering parents with a lower family income.
    ``(3) In the case of a parent described in paragraph (1) who is 
also the parent of a child who is eligible and enrolled for child 
health assistance under title XXI, the State may elect (on a uniform 
basis) to cover all such parents under section 2111 or under subsection 
(a)(10)(A).''.
                    (C) Enhanced matching funds available.--Section 
                1905 of such 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 new paragraph:
    ``(4) For purposes of subsection (b) and section 2105(a)(1):
            ``(A) FamilyCare parents.--The expenditures described in 
        this subparagraph are the following:
                    ``(i) Parents.--Expenditures for medical assistance 
                made available under section 1931, or under section 
                1902(a)(10)(A)(ii)(XVIII) for parents described in 
                section 1902(k)(1), in a family the income of which 
                exceeds the income level applicable under such section 
                1931 to a family of the size involved as of January 1, 
                2000.
                    ``(ii) Certain pregnant women.--Expenditures for 
                medical assistance for pregnant women under section 
                1902(l)(1)(A) in a family the income of which exceeds 
                the income level applicable under section 1902(l)(2)(A) 
                to a family of the size involved as of January 1, 
                2000.''.
                    (D) Appropriation from title xxi allotment for 
                certain medicaid expansion costs.--Subparagraph (C) of 
                section 2105(a)(1) of such Act, as inserted by section 
                14(a)(3), is amended to read as follows:
                    ``(C) FamilyCare parents.--Expenditures for medical 
                assistance that is attributable to expenditures 
                described in section 1905(u)(4)(A).''.
                    (E) Only counting enhanced portion for coverage of 
                additional pregnant women.--Section 1905 of such Act 
                (42 U.S.C. 1396d) is amended--
                            (i) in the fourth sentence of subsection 
                        (b), by inserting ``(except in the case of 
                        expenditures described in subsection (u)(5))'' 
                        after ``do not exceed'';
                            (ii) in subsection (u), by inserting after 
                        paragraph (4) (as inserted by subparagraph 
                        (C)), the following new paragraph:
    ``(5) For purposes of the fourth sentence of subsection (b) and 
section 2105(a), the following payments under this title do not count 
against a State's allotment under section 2104:
            ``(A) Regular fmap for expenditures for pregnant women with 
        income above january 1, 2000 income level and below 185 percent 
        of poverty.--The portion of the payments made for expenditures 
        described in paragraph (4)(A)(ii) that represents the amount 
        that would have been paid if the enhanced FMAP had not been 
        substituted for the Federal medical assistance percentage.''.
            (2) Under title xxi.--
                    (A) FamilyCare coverage.--Title XXI of such Act is 
                amended by adding at the end the following new section:

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

    ``(a) Optional Coverage.--Notwithstanding any other provision of 
this title, a State child health plan may provide for coverage, through 
an amendment to its State child health plan under section 2102, of 
FamilyCare assistance for targeted low-income parents in accordance 
with this section, but only if--
            ``(1) the State meets the conditions described in section 
        1902(k)(2); and
            ``(2) the State elects to provide medical assistance under 
        section 1902(a)(10)(A)(ii)(XVIII) and elects an applicable 
        income limit that is not lower than the limit described in 
        subsection (b)(2)(A).
    ``(b) Definitions.--For purposes of this section:
            ``(1) FamilyCare assistance.--The term `FamilyCare 
        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) 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 
                limit described in paragraph (1)(B)(ii)(I) the 
                applicable income limit in effect for a targeted low-
                income child;
                    ``(B) in paragraph (3), January 1, 2000, shall be 
                substituted for July 1, 1997; and
                    ``(C) in paragraph (4), January 1, 2000, shall be 
                substituted for March 31, 1997.
            ``(3) Parent.--The term `parent' has the meaning given the 
        term `caretaker' for purposes of carrying out section 1931.
            ``(4) Optional treatment of pregnant women as parents.--A 
        State child health plan may treat a pregnant woman who is not 
        otherwise a parent as a targeted low-income parent for purposes 
        of this section but only if the State has established an income 
        level under section 1902(l)(2)(A)(i) for pregnant women that is 
        at least 185 percent of the income official poverty line 
        described in such section.
    ``(c) References to Terms and Special Rules.--In the case of, and 
with respect to, a State providing for coverage of FamilyCare 
assistance to targeted low-income parents under subsection (a), the 
following special rules apply:
            ``(1) Any reference in this title (other than subsection 
        (b)) to a targeted low-income child is deemed to include a 
        reference to a targeted low-income parent.
            ``(2) Any such reference to child health assistance with 
        respect to such parents is deemed a reference to FamilyCare 
        assistance.
            ``(3) In applying section 2103(e)(3)(B) in the case of a 
        family provided coverage under this section, the limitation on 
        total annual aggregate cost-sharing shall be applied to the 
        entire family.
            ``(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 income level applicable to parents 
        under section 1931, or, in the case of a pregnant woman 
        described in subsection (b)(4), the income level established 
under section 1902(l)(2)(A).''.
                    (B) Additional allotment for states providing 
                familycare.--
                            (i) In general.--Section 2104 of such Act 
                        (42 U.S.C. 1397dd), as amended by section 
                        14(b), is amended by inserting after subsection 
                        (c) the following new subsection:
    ``(d) Additional Allotments for State Providing FamilyCare.--
            ``(1) Appropriation; total allotment.--For the purpose of 
        providing additional allotments to States electing to provide 
        FamilyCare coverage under section 2111, there is appropriated, 
        out of any money in the Treasury not otherwise appropriated--
                    ``(A) for fiscal year 2002, $2,000,000,000;
                    ``(B) for fiscal year 2003, $2,000,000,000;
                    ``(C) for fiscal year 2004, $3,000,000,000;
                    ``(D) for fiscal year 2005, $3,000,000,000;
                    ``(E) for fiscal year 2006, $6,000,000,000;
                    ``(F) for fiscal year 2007, $7,000,000,000;
                    ``(G) for fiscal year 2008, $8,000,000,000;
                    ``(H) for fiscal year 2009, $9,000,000,000;
                    ``(I) for fiscal year 2010, $10,000,000,000; and
                    ``(J) for fiscal year 2011 and each fiscal year 
                thereafter, the amount of the allotment provided under 
                this paragraph for the preceding fiscal year increased 
                by the percentage increase (if any) in the medical care 
                expenditure category of the Consumer Price Index for 
                All Urban Consumers (United States city average).
            ``(2) State and territorial allotments.--
                    ``(A) In general.--In addition to the allotments 
                provided under subsections (b) and (c), subject to 
                paragraph (3), 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 and 
                which has elected to provide coverage under section 
                2111 during the fiscal year--
                            ``(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 
                        section 2104(b) (determined without regard to 
                        section 2104(f)) to 98.95 percent of the total 
                        amount of the allotments under such section for 
                        such States eligible for an allotment under 
                        this subparagraph for such fiscal year; and
                            ``(ii) in the case of a commonwealth or 
                        territory described in section 2104(c)(3), the 
                        same proportion as the proportion of the 
                        commonwealth's or territory's allotment under 
                        section 2104(c) (determined without regard to 
                        section 2104(f)) to 1.05 percent of the total 
                        amount of the allotments under such section for 
                        commonwealths and territories eligible for an 
                        allotment under this subparagraph for such 
                        fiscal year.
                    ``(B) Redistribution of unused allotments.--In 
                applying subsection (f) with respect to additional 
                allotments made available under this subsection, the 
                procedures established under such subsection 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, 2001. 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 
        FamilyCare assistance.''.
                            (ii) Conforming amendments.--Section 2104 
                        of such Act (42 U.S.C. 1397dd), as amended by 
                        section 14(d)(3), is further 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 such 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''.
            (3) Effective date.--The amendments made by this subsection 
        apply to items and services furnished on or after October 1, 
        2000.
    (b) Rules for Implementation Beginning with Fiscal Year 2006.--
            (1) Required coverage of familycare parents.--Section 
        1902(a)(10)(A)(i) of the Social Security Act (42 U.S.C. 
        1396a(a)(10)(A)(i)) is amended--
                    (A) by striking ``or'' at the end of subclause 
                (VI);
                    (B) by striking the semicolon at the end of 
                subclause (VII) and insert ``, or''; and
                    (C) by adding at the end the following new 
                subclause:
                                    ``(VIII) who would be parents 
                                described in subsection (k)(1) if the 
                                income level specified in subsection 
                                (k)(2)(B) were equal to at least 100 
                                percent of the poverty line referred to 
                                in such subsection;''.
            (2) Expansion of availability of enhanced match under 
        medicaid for pre-chip expansions.--Paragraph (4) of section 
        1905(u) of such Act (42 U.S.C. 1396d(u)), as inserted by 
        subsection (a)(1)(C), is amended--
                    (A) by amending clause (ii) of subparagraph (A) to 
                read as follows:
                    ``(ii) Certain pregnant women.--Expenditures for 
                medical assistance for pregnant women under section 
                1902(l)(1)(A) in a family the income of which exceeds 
                the 133 percent of the income official poverty line.''; 
                and
                    (B) by adding at the end the following new 
                subparagraphs:
            ``(B) Parents with income above 100 percent of poverty but 
        below january 1, 2000 income level.--The expenditures described 
        in this subparagraph are expenditures for medical assistance 
        made available for any parents described in section 
        1902(a)(10)(A)(i)(VIII), whose income exceeds 100 percent of 
        the income official poverty line applicable to a family of the 
        size involved but does not exceed the applicable income level 
        established under this title (under section 1931 or otherwise) 
        for a parent in a family of the size involved as of January 1, 
        2000.
            ``(C) Children in families with income above medicaid 
        mandatory level not previously described.--The expenditures 
        described in this subparagraph are expenditures (other than 
        expenditures described in paragraph (2) or (3)) for medical 
        assistance made available to any child who is eligible for 
        assistance under section 1902(a)(10)(A) and the income of whose 
        family exceeds the minimum income level required under 
        subsection 1902(l)(2) for a child of the age involved (treating 
        any child who is 19 or 20 years of age as being 18 years of 
        age).''.
            (3) Offset of additional expenditures for enhanced match 
        for pre-chip expansion; elimination of offset for required 
        coverage of familycare parents.--
                    (A) In general.--Section 1905(u)(5) of such Act (42 
                U.S.C. 1396d(u)(5)), as added by subsection (a)(1)(E), 
                is amended--
                            (i) by amending subparagraph (A) to read as 
                        follows:
            ``(A) Regular fmap for expenditures for pregnant women with 
        income above 133 percent of poverty.--The portion of the 
        payments made for expenditures described in paragraph 
        (4)(A)(ii) that represents the amount that would have been paid 
        if the enhanced FMAP had not been substituted for the Federal 
        medical assistance percentage.''; and
                            (ii) by adding at the end the following new 
                        subparagraphs:
            ``(B) FamilyCare parents under 100 percent of poverty.--
        Payments for expenditures described in paragraph (4)(A)(i) in 
        the case of parents whose income does not exceed 100 percent of 
        the income official poverty line applicable to a family of the 
        size involved.
            ``(C) Regular fmap for expenditures for parents with income 
        above 100 percent of poverty but below january 1, 2000 income 
        level.--The portion of the payments made for expenditures 
        described in paragraph (4)(B) that represents the amount that 
        would have been paid if the enhanced FMAP had not been 
        substituted for the Federal medical assistance percentage.
            ``(D) Regular fmap for expenditures for certain children in 
        families with income above medicaid mandatory level.--The 
        portion of the payments made for expenditures described in 
        paragraph (4)(C) that represents the amount that would have 
        been paid if the enhanced FMAP had not been substituted for the 
        Federal medical assistance percentage.''.
                    (B) Conforming amendments.--Subparagraph (C) of 
                section 2105(a)(1) of such Act, as inserted by section 
                14(a)(3) and as amended by subsection (a)(1)(D), is 
                amended to read as follows:
                    ``(C) Certain familycare parents and others.--
                Expenditures for medical assistance that is 
                attributable to expenditures described in section 
                1905(u)(4), except as provided in section 
                1905(u)(5).''.
            (3) Effective date.--The amendments made by this subsection 
        apply as of October 1, 2005, to fiscal years beginning on or 
        after such date and to expenditures under the State plan on and 
        after such date.
    (c) Making Title XXI Base Allotments Permanent.--Section 2104(a) of 
such Act (42 U.S.C. 1397dd(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (9);
            (2) by striking the period at the end of paragraph (10) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(11) for fiscal year 2008 and each fiscal year 
        thereafter, the amount of the allotment provided under this 
        subsection for the preceding fiscal year increased by the 
        percentage increase (if any) in the medical care expenditure 
        category of the Consumer Price Index for All Urban Consumers 
        (United States city average).''.
    (d) Optional Application of Presumptive Eligibility Provisions to 
Parents.--Section 1920A of such Act (42 U.S.C. 1396r-1a) is amended by 
adding at the end the following new subsection:
    ``(e) In accordance with regulations, 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 of a child 
with respect to whom such a period is provided under this section.''.
    (e) Conforming Amendments.--
            (1) Eligibility categories.--Section 1905(a) of such Act 
        (42 U.S.C. 1396d(a)) is amended, in the matter before paragraph 
        (1)--
                    (A) by striking ``or'' at the end of clause (xi);
                    (B) by inserting ``or'' at the end of clause (xii); 
                and
                    (C) by inserting after clause (xii) the following 
                new clause:
            ``(xiii) who are parents described (or treated as if 
        described) in section 1902(k)(1),''.
            (2) Income limitations.--Section 1903(f)(4) of such Act (42 
        U.S.C. 1396b(f)(4))--
                    (A) effective October 1, 2005, by inserting 
                ``1902(a)(10)(A)(i)(VIII),'' after 
                ``1902(a)(10)(A)(i)(VII),''; and
                    (B) by inserting ``1902(a)(10)(A)(ii)(XVII), 
                1902(a)(10)(A)(ii)(XVIII),'' after 
                ``1902(a)(10)(A)(ii)(XVI),''.
            (3) Conforming amendment relating to no waiting period for 
        certain women.--Section 2102(b)(1)(B) of such 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 new clause:
                            ``(iii) may not apply a waiting period 
                        (including a waiting period to carry out 
                        paragraph (3)(C)) in the case of targeted low-
                        income women who are pregnant.''.

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

    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 new 
subparagraph:
                    ``(C) Automatic eligibility of children born to a 
                parent being provided familycare.--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.''.

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 new paragraph:
    ``(4)(A) A State may elect (in a plan amendment under this title) 
to provide medical assistance under this title, notwithstanding 
sections 401(a), 402(b), 403, and 421 of the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996, for aliens who are 
lawfully residing in the United States (including battered aliens 
described in section 431(c) of such Act) 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 (as defined by the State) of children (described in 
        such clause or otherwise) who are eligible for medical 
        assistance under the plan.
    ``(B) In the case of a State that has elected to provide medical 
assistance to a category of aliens under subparagraph (A), no action 
may be brought under an affidavit of support against any sponsor of 
such an alien on the basis of provision of assistance to such 
category.''.
    (b) Title XXI.--Section 2107(e)(1) of such Act (42 U.S.C. 
1397gg(e)(1)) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Section 1903(v)(4) (relating to optional 
                coverage of categories of permanent resident alien 
                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.''.
    (c) Effective Date.--The amendments made by this section take 
effect on October 1, 2000, and apply to medical assistance and child 
health assistance furnished on or after such date.

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 such 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 such 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 1902(l)(5) of such Act (42 U.S.C. 
                1396a(l)(5)), as added by section 7(a)(2), is amended 
                by inserting ``(or such higher age as the State has 
                elected under paragraph (1)(D))'' after ``19 years of 
                age''.
                    (D) Section 1920A(b)(1) of such 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''.
                    (E) Section 1928(h)(1) of such 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.
                    (F) Section 1932(a)(2)(A) of such 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 such 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))''.
    (c) Effective Date.--The amendments made by this section take 
effect on October 1, 2000, and apply to medical assistance and child 
health assistance provided on or after such date.

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 new 
                paragraph:
    ``(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)(XVIII), 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 if the 
        State does not apply such a standard under such child health 
        plan with respect to such individuals;
            ``(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 the 
        same verification policies, forms, and frequency as 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.
    (b) Additional Entities Qualified To Determine Medicaid Presumptive 
Eligibility for Low-income Children.--
            (1) In general.--Section 1920A(b)(3)(A)(i) of such Act (42 
        U.S.C. 1396r-1a(b)(3)(A)(i)) is amended--
                    (A) by striking ``or (II)'' and inserting ``, 
                (II)''; and
                    (B) by inserting ``eligibility of a child for 
                medical assistance under the State plan under this 
                title, or eligibility of a child for child health 
                assistance under the program funded under title XXI, 
                (III) is an elementary school or secondary school, as 
                such terms are defined in section 14101 of the 
                Elementary and Secondary Education Act of 1965 (20 
                U.S.C. 8801), an elementary or secondary school 
                operated or supported by the Bureau of Indian Affairs, 
                a State child support enforcement agency, a child care 
                resource and referral agency, an organization that is 
                providing emergency food and shelter under a grant 
                under the Stewart B. McKinney Homeless Assistance Act, 
                or a State office or entity involved in enrollment in 
                the program under this title, under part A of title IV, 
                under title XXI, or that determines eligibility for any 
                assistance or benefits provided under any program of 
                public or assisted housing that receives Federal funds, 
                including the program under section 8 or any other 
                section of the United States Housing Act of 1937 (42 
                U.S.C. 1437 et seq.), or (IV) any other entity the 
                State so deems, as approved by the Secretary'' before 
                the semicolon.
            (2) Technical amendments.--Section 1920A of such Act (42 
        U.S.C. 1396r-1a) is amended--
                    (A) in subsection (b)(3)(A)(ii), by striking 
                ``paragraph (1)(A)'' and inserting ``paragraph 
                (2)(A)''; and
                    (B) in subsection (c)(2), in the matter preceding 
                subparagraph (A), by striking ``subsection (b)(1)(A)'' 
                and inserting ``subsection (b)(2)(A)''.
            (3) Application to presumptive eligibility for pregnant 
        women under medicaid.--Section 1920(b) of such 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).''.
            (4) Application under title xxi.--
                    (A) In general.--Section 2107(e)(1) of such Act (42 
                U.S.C. 1397gg(e)(1)), as amended by section 5(b), is 
                amended by adding at the end the following new 
                subparagraph:
                    ``(E) Sections 1920 and 1920A (relating to 
                presumptive eligibility).''.
                    (B) Exception from limitation on administrative 
                expenses.--Section 2105(c)(2) of such Act (42 U.S.C. 
                1397ee(c)(2)) is amended by adding at the end the 
                following new subparagraph:
                    ``(C) Exception for presumptive eligibility 
                expenditures.--The limitation under subparagraph (A) on 
expenditures shall not apply to expenditures attributable to the 
application of section 1920A (pursuant to section 2107(e)(1)(E)), 
regardless of whether the child is determined to be ineligible for the 
program under this title or title XIX.''.
    (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 
                new paragraph:
            ``(66) provide, by not later than the first day of the 
        first month that begins more than 1 year after the date of the 
        enactment of this paragraph and 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.--Section 2102(b)(3) (42 
        U.S.C. 1397bb(b)(3)) is amended by redesignating subparagraphs 
        (D) and (E) as subparagraphs (E) and (F), respectively, and by 
        inserting after subparagraph (C) the following new 
        subparagraph:
                    ``(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;''.
            (3) Effective date.--The amendments made by paragraphs (1) 
        and (2) apply to individuals who lose eligibility under the 
        medicaid program under title XIX, or under a State child health 
        insurance plan under title XXI, respectively, of the Social 
        Security Act on or after the date that is 60 days after the 
        date of the enactment of this Act.
    (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 new clause:
    ``(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.) (commonly referred to as the `medicaid program') 
and of child health assistance under title XXI of such Act (commonly 
referred to as `CHIP'), including information on how to obtain an 
application for assistance under such program.
    ``(II) Information on the medicaid program and CHIP under subclause 
(I) shall be provided on a form separate from the application form for 
free and reduced price lunches under clause (i).''.

SEC. 8. IMPROVING WELFARE-TO-WORK TRANSITION UNDER THE MEDICAID 
              PROGRAM.

    (a) Making Provision Permanent.--
            (1) In general.--Subsection (f) of section 1925 of the 
        Social Security Act (42 U.S.C. 1396r-6) is repealed.
            (2) Conforming amendment.--Section 1902(e)(1) of such Act 
        (42 U.S.C. 1396a(e)(1)) is repealed.
    (b) State Option of Initial 12-Month Eligibility.--Section 1925 of 
such Act (42 U.S.C. 1396r-6) is amended--
            (1) in subsection (a), by adding at the end the following 
        new paragraph:
            ``(5) Option of 12-month initial eligibility period.--A 
        State may elect to treat any reference in this subsection to a 
        6-month period (or 6 months) as a reference to a 12-month 
        period (or 12 months). In the case of such an election, 
        subsection (b) shall not apply.''; and
            (2) in subsection (b)(1), by inserting ``and subsection 
        (a)(5)'' after ``paragraph (3)''.
    (c) Simplification Options.--
            (1) Removal of administrative reporting requirements for 
        additional 6-month extension.--Section 1925(b)(2) of such Act 
        (42 U.S.C. 1396r-6(b)(2)) is amended--
                    (A) by striking subparagraph (B);
                    (B) in subparagraph (A)(i)--
                            (i) by striking ``(I)'' and all that 
                        follows through ``(II)'' and inserting ``(i)'';
                            (ii) by striking ``, and (III)'' and 
                        inserting ``and (ii)''; and
                            (iii) by redesignating such subparagraph as 
                        subparagraph (A) (with appropriate 
                        indentation); and
                    (C) in subparagraph (A)(ii)--
                            (i) by striking ``notify the family of the 
                        reporting requirement under subparagraph 
                        (B)(ii) and'' and inserting ``provide the 
                        family with notification of''; and
                            (ii) by redesignating such subparagraph as 
                        subparagraph (B) (with appropriate 
                        indentation).
            (2) Removal of requirement for previous receipt of medical 
        assistance.--Section 1925(a)(1) of such Act (42 U.S.C. 1396r-
        6(a)(1)) is amended--
                    (A) by redesignating the matter after 
                ``Requirement.--'' as a subparagraph (A) with the 
heading ``In general.--'' and with appropriate indentation; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(B) State option to waive requirement for 
                previous receipt of medical assistance.--A State may 
                elect to apply subparagraph (A) to any family whose 
                eligibility for assistance under section 1931 would 
                otherwise terminate because of hours of, or income 
                from, employment, without regard to the period of 
                previous receipt of assistance or aid.''.
            (3) Permitting increase or waiver of 185 percent of poverty 
        earning limit.--Section 1925(b)(3)(A)(iii)(III) of such Act (42 
        U.S.C. 1396r-6(b)(3)(A)(iii)(III)) is amended--
                    (A) by inserting ``(at its option)'' after ``the 
                State''; and
                    (B) by inserting ``(or such higher percent as the 
                State may specify)'' after ``185 percent''.
            (4) Exemption for states covering needy families up to 185 
        percent of poverty.--Section 1925 of such Act (42 U.S.C. 1396r-
        6), as amended by subsection (a), is amended--
                    (A) in each of subsections (a)(1) and (b)(1), by 
                inserting ``but subject to subsection (f),'' after 
                ``Notwithstanding any other provision of this title,''; 
                and
                    (B) by adding at the end the following new 
                subsection:
    ``(f) Exemption for State Covering Needy Families Up to 185 Percent 
of Poverty.--
            ``(1) In general.--At State option, the provisions of this 
        section shall not apply to a State that uses the authority 
        under section 1931(b)(2)(C) to make medical assistance 
        available under the State plan under this title, at a minimum, 
        to all individuals described in section 1931(b)(1) in families 
        with gross incomes (determined without regard to work-related 
        child care expenses of such individuals) at or below 185 
        percent of the income official poverty line (as defined by the 
        Office of Management and Budget, and revised annually in 
        accordance with section 673(2) of the Omnibus Budget 
        Reconciliation Act of 1981) applicable to a family of the size 
        involved.
            ``(2) Application to other provisions of this title.--The 
        State plan of a State described in paragraph (1) shall be 
        deemed to meet the requirements of sections 
        1902(a)(10)(A)(i)(I) and 1902(e)(1).''.
    (d) Effective Date.--The amendments made by this section take 
effect on October 1, 2000.

SEC. 9. 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 such 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''.
    (c) Effective Date.--The amendments made by this section apply to 
eligibility determinations made on or after October 1, 2000.

SEC. 10. 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), 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 to carry out this 
section. Amounts appropriated under this subsection shall remain 
available until expended.
    (g) State Defined.--For purposes of this section, the term 
``State'' has the meaning given such term for purposes of title XIX of 
the Social Security Act.

SEC. 11. 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 new paragraph:
            ``(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 such 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 
                new paragraph:
            ``(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 such Act (42 U.S.C. 
        1397gg(e)(1)), as amended by sections 5(b) and 7(c)(3), is 
        further amended by adding at the end the following new 
        subparagraph:
                    ``(F) Section 1902(a)(67) (relating to prohibition 
                of affiliation with debarred individuals).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenditures made on or after the date of the enactment of 
this Act.

SEC. 12. INCREASE IN CHIP ALLOTMENT FOR EACH OF FISCAL YEARS 2002 
              THROUGH 2004.

    Paragraphs (5), (6), and (7) of Section 2104(a) of the Social 
Security Act (42 U.S.C. 1397dd(a)) are amended by striking 
``$3,150,000,000'' each place it appears and inserting 
``$4,150,000,000''.

SEC. 13. DEMONSTRATION PROGRAMS TO IMPROVE MEDICAID AND CHIP 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 such Act (42 
        U.S.C. 1397aa et seq.).
            (3) TANF.--The program under part of A of title IV of such 
        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, out of any funds in the Treasury not otherwise 
appropriated, $10,000,000, to remain available until expended.

SEC. 14. AUTHORITY TO PAY MEDICAID EXPANSION COSTS FROM TITLE XXI 
              APPROPRIATION.

    (a) Authority To Pay Medicaid Expansion Costs From Title XXI 
Appropriation.--Section 2105(a) of the Social Security Act (42 U.S.C. 
1397ee(a)) is amended--
            (1) in paragraph (1)--
                    (A) by inserting ``Child health assistance under 
                this title.--Expenditures'' before ``for child health 
                assistance'';
                    (B) by striking ``; and'' at the end and inserting 
                a period; and
                    (C) by redesignating such paragraph as subparagraph 
                (D) and indenting appropriately;
            (2) in paragraph (2)--
                    (A) in subparagraph (A), by striking ``for 
                payment'';
                    (B) by inserting ``Assistance and administrative 
                expenditures subject to limit.--Expenditures'' before 
                ``only to the extent'';
                    (C) by redesignating subparagraphs (A) through (D) 
                as clauses (i) through (iv), respectively, and 
                indenting appropriately; and
                    (D) by redesignating such paragraph as subparagraph 
                (E) and indenting appropriately;
            (3) by striking ``(a) In General.--'' and all that follows 
        up to subparagraph (D), as so redesignated, and inserting the 
        following:
    ``(a) Allowable Expenditures.--
            ``(1) In general.--Subject to the succeeding provisions of 
        this section, the Secretary shall pay to each State with a plan 
approved under this title, from its allotment under section 2104, an 
amount for each quarter equal to the enhanced FMAP (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))) of the following expenditures in the quarter:
                    ``(A) Child health assistance under medicaid.--
                Expenditures for child health assistance under the plan 
                for targeted low-income children in the form of 
                providing medical assistance for expenditures described 
                in the fourth sentence of section 1905(b).
                    ``(B) Medicaid presumptive eligibility for 
                children.--Expenditures for the provision of medical 
                assistance on behalf of a child during a presumptive 
                eligibility period under section 1920A.
                    ``(C) Reserved.--[reserved].''; and
            (4) by adding at the end the following new paragraphs:
            ``(2) Order of payments.--Payments under a subparagraph of 
        paragraph (1) from a State's allotment for expenditures 
        described in each such subparagraph shall be made on a 
        quarterly basis in the order of such subparagraph in such 
        paragraph.
            ``(3) No duplicative payment.--In the case of expenditures 
        for which payment is made under paragraph (1), no payment shall 
        be made under title XIX.''.
    (b) Elimination of Requirement To Reduce Title XXI Allotment by 
Medicaid Expansion Costs.--Section 2104 of such Act (42 U.S.C. 1397dd) 
is amended by striking subsection (d).
    (c) Authority To Transfer Title XXI Appropriations to Title XIX 
Appropriation Account as Reimbursement for Medicaid Expenditures for 
Medicaid Expansion Services.--Notwithstanding any other provision of 
law, all amounts appropriated under title XXI of the Social Security 
Act and allotted to a State pursuant to subsection (b) or (c) of 
section 2104 of such Act (42 U.S.C. 1397dd) for fiscal years 1998 
through 2000 (including any amounts that, but for this provision, would 
be considered to no longer be available) and not expended in providing 
child health assistance or related services for which payment may be 
made pursuant to subparagraph (D) or (E) of section 2105(a)(1) of such 
Act (42 U.S.C. 1397ee(a)(1)), as redesignated by subsection (a), shall 
be available to reimburse the Grants to States for Medicaid account in 
an amount equal to the total payments made to such State under section 
1903(a) of such Act (42 U.S.C. 1396b(a)) for expenditures in such years 
for medical assistance described in subparagraphs (A) and (B) of 
section 2105(a)(1) of such Act (42 U.S.C. 1397ee(a)(1)), as so amended.
    (d) Conforming Amendments.--
            (1) Section 1905(b).--Section 1905(b) of such Act (42 
        U.S.C. 1396d(b)) is amended in the fourth sentence by striking 
        ``the State's allotment under section 2104 (not taking into 
        account reductions under section 2104(d)(2)) for the fiscal 
        year reduced by the amount of any payments made under section 
        2105 to the State from such allotment for such fiscal year'' 
        and inserting ``the State's allotment under section 2104''.
            (2) Section 1905(u).--Section 1905(u)(1)(B) of such Act (42 
        U.S.C. 1396d(u)(1)(B)) is amended by striking ``and section 
        2104(d)'' and inserting ``and section 2105(a)(1)''.
            (3) Section 2104.--Section 2104 of such Act (42 U.S.C. 
        1397dd), as amended by subsection (b), is further amended--
                    (A) in subsection (b)(1), by striking ``and 
                subsection (d)''; and
                    (B) in subsection (c)(1), by striking ``subject to 
                subsection (d),''.
            (4) Section 2105(c).--Section 2105(c) of such Act (42 
        U.S.C. 1397ee(c)) is amended--
                    (A) in paragraph (2)(A), by striking all that 
                follows ``Except as provided in this paragraph,'' and 
                inserting ``the amount of payment that may be made 
                under subsection (a) for a fiscal year for expenditures 
                for items described in paragraph (1)(E) of such 
                subsection shall not exceed 10 percent of the total 
                amount of expenditures for which payment is made under 
                paragraph (1) of such subsection (other than 
                subparagraph (B)).'';
                    (B) in paragraph (2)(B), by striking ``described in 
                subsection (a)(2)'' and inserting ``described in 
                subsection (a)(1)(E)''; and
                    (C) in paragraph (6)(B), by striking ``Except as 
                otherwise provided by law,'' and inserting ``Except as 
                provided in subparagraph (A) or (B) of subsection 
                (a)(1) or any other provision of law,''.
            (5) Section 2110(a).--Section 2110(a) of such Act (42 
        U.S.C. 1397jj) is amended by striking ``section 2105(a)(2)(A)'' 
        and inserting ``section 2105(a)(1)(E)(i)''.
    (e) Technical Amendment.--Section 2105(d)(2)(B)(ii) of such Act (42 
U.S.C. 1397ee(d)(2)(B)(ii)) is amended by striking ``enhanced FMAP 
under section 1905(u)'' and inserting ``enhanced FMAP under the fourth 
sentence of section 1905(b)''.
    (f) Effective Date.--The amendments made by this section shall be 
effective as if included in the enactment of the Balanced Budget Act of 
1997.
                                 <all>