[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2071 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 2071

 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 HOUSE OF REPRESENTATIVES

                              May 4, 2005

 Mr. Dingell (for himself, Mr. Waxman, Mr. Brown of Ohio, Mr. Pallone, 
    Mr. George Miller of California, Mr. Van Hollen, Mr. Holt, Ms. 
  Schakowsky, Mr. Gene Green of Texas, Mr. Kildee, Ms. Jackson-Lee of 
 Texas, Mr. Menendez, Mr. Reyes, Mr. Meehan, Mr. Hinchey, Mr. Lantos, 
 Mr. Nadler, Mr. Grijalva, Mr. Farr, Mr. Berry, Mr. Olver, Mr. Owens, 
 Mrs. McCarthy, Mr. Tierney, Ms. Woolsey, Mr. McNulty, Mr. Schiff, Ms. 
Corrine Brown of Florida, Mr. Butterfield, Mr. Hastings of Florida, Mr. 
 Murtha, Mr. Michaud, Mr. Ruppersberger, Mr. Lynch, Mr. Cummings, Ms. 
 Norton, Mr. Moran of Virginia, Mrs. Maloney, Mr. Baca, Ms. Kilpatrick 
   of Michigan, Mr. Higgins, Mr. Serrano, Ms. Herseth, Ms. Wasserman 
   Schultz, Mr. Andrews, Ms. Baldwin, Mr. Crowley, Mr. Cleaver, Ms. 
 Pelosi, Mr. Clay, Mr. Stupak, Ms. DeGette, Mr. Pascrell, Ms. McCollum 
  of Minnesota, Mr. Honda, Mr. Strickland, Ms. Berkley, Mrs. Davis of 
   California, Mr. Jackson of Illinois, Ms. Slaughter, Ms. Millender-
McDonald, Mrs. Capps, Mr. Carnahan, Ms. Linda T. Sanchez of California, 
Ms. Roybal-Allard, Ms. Solis, Mr. Cuellar, Mr. Ross, Ms. Matsui, Mr. Al 
  Green of Texas, Mr. Scott of Virginia, Mr. Salazar, Ms. Hooley, Mr. 
Israel, Mr. Ryan of Ohio, Mr. Lewis of Georgia, Mr. Kind, Mr. Oberstar, 
Mr. Kennedy of Rhode Island, Mr. Doggett, Mr. Gonzalez, Mr. Hoyer, Mr. 
    McGovern, Mr. Kucinich, Mr. Ortiz, Mr. Boucher, Mr. Markey, Mr. 
Hinojosa, Ms. Schwartz of Pennsylvania, Mr. Larson of Connecticut, Mr. 
Emanuel, Ms. Carson, Mr. McDermott, Mr. Stark, and Mr. Moore of Kansas) 
 introduced the following bill; which was referred to the Committee on 
                          Energy and Commerce

_______________________________________________________________________

                                 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 
2005''.
    (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. Allowing States to simplify rules for families.
Sec. 8. Revision and simplification of the transitional medical 
                            assistance program (TMA).
Sec. 9. Limitations on conflicts of interest.
Sec. 10. Demonstration programs to improve medicaid and CHIP outreach 
                            to homeless individuals and families.
Sec. 11. Additional CHIP revisions.
Sec. 12. Increased federal reimbursement for language services under 
                            the medicaid program and title XXI.

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 or resources 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 or 
        resource level (if any) 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 vary such level consistent 
with the various income levels established under subsection (l)(2) in 
order to ensure, to the maximum extent possible, that such individuals 
shall be 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 or otherwise insured.
    ``(D) In this subsection, the term `parent' includes an individual 
treated as a caretaker for purposes of carrying out section 1931.
    ``(E) In this subsection, the term `effective income level' means 
the income level expressed as a percent of the poverty line and 
considering applicable income disregards.
    ``(2) The State shall provide for coverage of a parent described in 
paragraph (1) or section 2111 of a child who is covered under this 
title or title XXI under the same title as the title as such child is 
covered. 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 cover all such 
parents under section 2111 or under this title.''.
                    (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)(A)''; 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) and section 2105(a)(1):
            ``(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 
                clauses (iii) and (iv) are met, expenditures for 
                medical assistance for parents described in section 
                1902(k)(1) and for parents who would be described in 
                such section but for the fact that they are eligible 
                for medical assistance under section 1931 or under a 
                waiver approved under section 1115.
                    ``(ii) Certain pregnant women.--If the conditions 
                described in clause (v) 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, 2006.
                    ``(iii) Conditions relating to ensuring children's 
                coverage for enhanced match 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) Such State child health plan 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) Effective for determinations of 
                        eligibility made on or after the date that is 1 
                        year after the date of the enactment of this 
                        clause, the application and renewal procedures 
                        for individuals under 19 years of age (or such 
                        higher age as the State has elected under 
                        section 1902(l)(1)(D)) for medical assistance 
                        under section 1902(a)(10)(A) are not be more 
                        restrictive or burdensome than such procedures 
                        used for children with higher income under the 
                        State child health plan under title XXI.
                    ``(iv) Conditions relating to minimum coverage for 
                parents for enhanced match for parents.--The conditions 
                described in this clause are the following:
                            ``(I) 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, 
                        2005, to be eligible for medical assistance as 
                        a parent under this title.
                            ``(II) 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.
                    ``(v) Conditions for enhanced match 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 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, 2005, 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).
                    ``(vi) 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) Appropriation from title xxi allotment for 
                certain medicaid expansion costs.--Section 2105(a) of 
                the Social Security Act (42 U.S.C. 1397ee(a)) is 
                amended--
                            (i) in paragraph (1), by redesignating 
                        subparagraphs (B) through (D) as subparagraphs 
                        (C) through (E), respectively, and by inserting 
                        after subparagraph (A) the following new 
                        subparagraph:
                    ``(B) for medical assistance that is attributable 
                to expenditures described in section 1905(u)(4)(A);''; 
                and
                            (ii) in paragraph (2), by adding at the end 
                        the following new subparagraph:
                    ``(E) Fifth, for expenditures for items described 
                in paragraph (1)(E).''.
                    (E) Increasing enhanced fmap to 100 percent for 
                fiscal years 2006 and 2007 for coverage of parents.--
                Section 2105(b) of such Act (42 U.S.C. 1397ee(b)) is 
                amended by adding at the end the following new 
                sentence: ``Notwithstanding the previous sentence, the 
                `enhanced FMAP' shall be 100 percent with respect to 
                medical assistance under title XIX for expenditures 
                described in section 1905(u)(4)(A)(i), but only for 
                such assistance furnished during fiscal year 2006 and 
                fiscal year 2007.''.
            (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.

    ``(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, health care 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 health care 
        assistance for pregnant women, 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 to the maximum extent possible, that 
        such individuals shall be 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) Health care assistance for pregnant women.--The term 
        `health care assistance for pregnant women' 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.
            ``(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, 2006, shall be 
                substituted for July 1, 1997; and
                    ``(C) in paragraph (4), January 1, 2006, shall be 
                substituted for March 31, 1997.
            ``(5) Targeted low-income pregnant woman.--The term 
        `targeted low-income pregnant woman' has the meaning given the 
        term targeted low-income child in section 2110(b) as if any 
        reference to a child were a reference to a woman during 
        pregnancy and through the end of the month in which the 60-day 
        period beginning on the last day of her pregnancy ends; 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, 2006, shall be 
                substituted for July 1, 1997; and
                    ``(C) in paragraph (4), January 1, 2006, shall be 
                substituted for March 31, 1997.
    ``(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 health care 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 health care assistance for 
                pregnant women.
            ``(3) In applying section 2103(e)(3)(B) in the case of a 
        family (consisting of a parent and one or more children) 
        provided coverage under this section or a pregnant woman 
        provided coverage under this section without covering other 
        family members, the limitation on total annual aggregate cost-
        sharing shall be applied to such entire family or such pregnant 
        woman, respectively.
            ``(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.''.
                    (B) Additional allotment for states providing 
                familycare.--
                            (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 Providing FamilyCare.--
            ``(1) Appropriation; total allotment.--For the purpose of 
        providing additional allotments to States to provide FamilyCare 
        coverage under section 2111, there is appropriated, out of any 
        money in the Treasury not otherwise appropriated--
                    ``(A) for fiscal year 2006, $7,000,000,000;
                    ``(B) for fiscal year 2007, $7,000,000,000;
                    ``(C) for fiscal year 2008, $3,000,000,000;
                    ``(D) for fiscal year 2009, $3,000,000,000;
                    ``(E) for fiscal year 2010, $6,000,000,000;
                    ``(F) for fiscal year 2011, $7,000,000,000;
                    ``(G) for fiscal year 2012, $8,000,000,000;
                    ``(H) for fiscal year 2013, $9,000,000,000; and
                    ``(I) for fiscal year 2014 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 
                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 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 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 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) 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, 2005. 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 
        health care 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 health care 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''.
            (3) Effective date.--The amendments made by this subsection 
        apply to items and services furnished on or after October 1, 
        2005, whether or not regulations implementing such amendments 
        have been issued.
    (b) Rules for Implementation Beginning With Fiscal Year 2007.--
            (1) Expansion of availability of enhanced match under 
        medicaid for pre-chip expansions.--Paragraph (4) of section 
        1905(u) of the Social Security 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, 
                but only if the income level established under section 
                1902(l)(2) (or under a Statewide waiver under section 
                1115) for pregnant women is 185 percent of the income 
                official poverty line.''; and
                    (B) by adding at the end the following:
            ``(B) 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) (other than under 
        clause (i)) and the income of whose family exceeds the minimum 
        income level required under subsection 1902(l)(2) (or, if 
        higher, the minimum level required under section 1931 for that 
        State) for a child of the age involved (treating any child who 
        is 19 or 20 years of age as being 18 years of age).''.
            (2) Offset of additional expenditures for enhanced match 
        for pre-chip expansion.--Section 1905 of the Social Security 
        Act (42 U.S.C. 1396d) is amended--
                    (A) in the fourth sentence of subsection (b), by 
                inserting ``(except in the case of expenditures 
                described in subsection (u)(5))'' after ``do not 
                exceed'';
                    (B) in subsection (u), by inserting after paragraph 
                (4) (as inserted by subparagraph (C)), the following:
    ``(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 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.
            ``(B) FamilyCare parents.--Payments for expenditures 
        described in paragraph (4)(A)(i).
            ``(C) 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)(B) 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 (B) of 
                section 2105(a)(1) of the Social Security Act, as 
                amended by subsection (a)(1)(D), is amended to read as 
                follows:
                    ``(B) 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, 2006, to fiscal years beginning on or 
        after such date and to expenditures under the State plan on and 
        after such date, whether or not regulations implementing such 
        amendments have been issued.
    (c) Making Title XXI Base Allotments Permanent.--Section 2104(a) of 
the Social Security 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:
            ``(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) GAO Study.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study regarding funding under title XXI of the 
        Social Security Act that examines--
                    (A) the adequacy of overall funding under such 
                title;
                    (B) the formula for determining allotments and for 
                redistribution of unspent funds under such title; and
                    (C) the effect of waiting lists and caps on 
                enrollment under such title.
            (2) Report.--Not later than July 1, 2007, the Comptroller 
        General shall submit a report on the study conducted under 
        paragraph (1). Such report shall include recommendations 
        regarding a better mechanism for determining State allotments 
        and redistribution of unspent funds under such title in order 
        to ensure all eligible families in need can access coverage 
        through such title.
    (e) 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--
                    (A) effective October 1, 2006, by inserting 
                ``1902(a)(10)(A)(i)(VIII),'' after 
                ``1902(a)(10)(A)(i)(VII),''; and
                    (B) 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.

    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 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:
    ``(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 caretaker 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 permanent resident alien children and 
                parents), but only if the State has elected to apply 
                such section to that category of children under title 
                XIX.''.
    (c) Effective Date.--The amendments made by this section take 
effect on October 1, 2005, and apply to medical assistance and child 
health assistance furnished on or after such date, whether or not 
regulations implementing such amendments have been issued.

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))''.
    (c) Effective Date.--The amendments made by this section take 
effect on January 1, 2006, and apply to medical assistance and child 
health assistance provided on or after such date, whether or not 
regulations implementing such amendments have been issued.

SEC. 7. ALLOWING STATES TO SIMPLIFY RULES FOR FAMILIES.

    (a) Presumptive Eligibility.--
            (1) 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).''.
            (2) 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 of a child with respect to whom such a period 
is provided under this section.''.
            (3) Application under title xxi.--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) 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 continuous eligibility for 
        children under this title in a manner that is no less generous 
        than the 12-months continuous eligibility provided under 
        section 1902(e)(12) 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 continuous 
        eligibility for parents under this title in a manner that is no 
        less generous than the 12-months continuous eligibility 
        provided under such section for parents described in such 
        section under title XIX.''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on July 1, 2006, whether or not regulations 
        implementing such amendments have been issued.
    (c) 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).''.

SEC. 8. REVISION AND SIMPLIFICATION OF THE TRANSITIONAL MEDICAL 
              ASSISTANCE PROGRAM (TMA).

    (a) Making Reporting Requirements Optional; Option of Extended 
Eligibility.--
            (1) Option for making reporting requirements optional.--
        Section 1925(b) of the Social Security Act (42 U.S.C. 1396r-
        6(b)) is amended--
                    (A) in paragraph (1), by inserting ``, at the 
                option of a State,'' after ``and which'';
                    (B) in paragraph (2)(A), by inserting ``Subject to 
                subparagraph (C)--'' after ``(A) Notices.--'';
                    (C) in paragraph (2)(B), by inserting ``Subject to 
                subparagraph (C)--'' after ``(B) Reporting 
                requirements.--'';
                    (D) by adding at the end the following new 
                subparagraph:
                    ``(C) State option to waive notice and reporting 
                requirements.--A State may waive some or all of the 
                reporting requirements under clauses (i) and (ii) of 
                subparagraph (B). Insofar as it waives such a reporting 
                requirement, the State need not provide for a notice 
                under subparagraph (A) relating to such requirement.''; 
                and
                    (E) in paragraph (3)(A)(iii), by inserting ``the 
                State has not waived under paragraph (2)(C) the 
                reporting requirement with respect to such month under 
                paragraph (2)(B) and if'' after ``6-month period if''.
            (2) State option to extend eligibility for low-income 
        individuals for up to 12 additional months.--Section 1925 of 
        such Act (42 U.S.C. 1396r-6) is further amended--
                    (A) by redesignating subsections (c) through (f) as 
                subsections (d) through (g); and
                    (B) by inserting after subsection (b) the following 
                new subsection:
    ``(c) State Option of Up to 12 Months of Additional Eligibility.--
            ``(1) In general.--Notwithstanding any other provision of 
        this title, each State plan approved under this title may 
        provide, at the option of the State, that the State shall offer 
        to each family which received assistance during the entire 6-
        month period under subsection (b) and which meets the 
        applicable requirement of paragraph (2), in the last month of 
        the period the option of extending coverage under this 
        subsection for the succeeding period not to exceed 12 months.
            ``(2) Income restriction.--The option under paragraph (1) 
        shall not be made available to a family for a succeeding period 
        unless the State determines that the family's average gross 
        monthly earnings (less such costs for such child care as is 
        necessary for the employment of the caretaker relative) as of 
        the end of the 6-month period under subsection (b) does not 
        exceed 185 percent of the 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.
            ``(3) Application of extension rules.--The provisions of 
        paragraphs (2), (3), (4), and (5) of subsection (b) shall apply 
        to the extension provided under this subsection in the same 
        manner as they apply to the extension provided under subsection 
        (b)(1), except that for purposes of this subsection--
                    ``(A) any reference to a 6-month period under 
                subsection (b)(1) is deemed a reference to the 
                extension period provided under paragraph (1) and any 
                deadlines for any notices or reporting and the premium 
                payment periods shall be modified to correspond to the 
                appropriate calendar quarters of coverage provided 
                under this subsection; and
                    ``(B) any reference to a provision of subsection 
                (a) or (b) is deemed a reference to the corresponding 
                provision of subsection (b) or of this subsection, 
                respectively.''.
    (b) State Option To Waive Receipt of Medicaid for 3 of Previous 6 
Months To Qualify for TMA.--Section 1925(a)(1) of such Act (42 U.S.C. 
1396r-6(a)(1)) is amended by adding at the end the following: ``A State 
may, at its option, also apply the previous sentence in the case of a 
family that was receiving such aid for fewer than 3 months, or that had 
applied for and was eligible for such aid for fewer than 3 months, 
during the 6 immediately preceding months described in such 
sentence.''.
    (c) Elimination of Sunset for TMA.--
            (1) Subsection (g) of section 1925 of such Act (42 U.S.C. 
        1396r-6), as redesignated under subsection (a)(2), is repealed.
            (2) Section 1902(e)(1) of such Act (42 U.S.C. 1396a(e)(1)) 
        is amended by striking ``(A) Nothwithstanding'' and all that 
        follows through ``During such period, for'' in subparagraph (B) 
        and inserting ``For''.
    (d) CMS Report on Enrollment and Participation Rates Under TMA.--
Section 1925 of such Act, as amended by subsections (a)(2) and (c)(1), 
is amended by adding at the end the following new subsection:
    ``(g) Additional Provisions.--
            ``(1) Collection and reporting of participation 
        information.--Each State shall--
                    ``(A) collect and submit to the Secretary, in a 
                format specified by the Secretary, information on 
                average monthly enrollment and average monthly 
                participation rates for adults and children under this 
                section; and
                    ``(B) make such information publicly available.
        Such information shall be submitted under subparagraph (A) at 
        the same time and frequency in which other enrollment 
        information under this title is submitted to the Secretary. 
        Using such information, the Secretary shall submit to Congress 
        annual reports concerning such rates.''.
    (e) Coordination of Work.--Section 1925(g) of such Act, as added by 
subsection (d), is amended by adding at the end the following new 
paragraph:
            ``(2) Coordination with administration for children and 
        families.--The Administrator of the Centers for Medicare & 
        Medicaid Services, in carrying out this section, shall work 
        with the Assistant Secretary for the Administration for 
        Children and Families to develop guidance or other technical 
        assistance for States regarding best practices in guaranteeing 
        access to transitional medical assistance under this 
        section.''.
    (f) Elimination of TMA Requirement for States That Extend Coverage 
to Children and Parents Through 185 Percent of Poverty.--
            (1) In general.--Section 1925 of such Act is further 
        amended by adding at the end the following new subsection:
    ``(h) Provisions Optional for States That Extend Coverage to 
Children and Parents Through 185 Percent of Poverty.--A State may (but 
is not required to) meet the requirements of subsections (a) and (b) if 
it provides for medical assistance under section 1931 to families 
(including both children and caretaker relatives) the average gross 
monthly earning of which (less such costs for such child care as is 
necessary for the employment of a caretaker relative) is at or below a 
level that is at least 185 percent of the 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) Conforming amendments.--Such section is further 
        amended, in subsections (a)(1) and (b)(1), by inserting ``, but 
        subject to subsection (h),'' after ``Notwithstanding any other 
        provision of this title,'' each place it appears.
    (g) Extending Use of Outstationed Workers To Accept Applications 
for Transitional Medical Assistance.--Section 1902(a)(55) of such Act 
(42 U.S.C. 1396a(a)(55)) is amended by inserting ``and under section 
1931'' after ``(a)(10)(A)(ii)(IX)''.
    (h) Effective Dates.--(1) Except as provided in this subsection, 
the amendments made by this section shall apply to calendar quarters 
beginning on or after the date of the enactment of this Act, without 
regard to whether or not final regulations to carry out such amendments 
have been promulgated by such date.
    (2) In the case of a State plan for medical assistance under title 
XIX of the Social Security Act which the Secretary of Health and Human 
Services determines requires State legislation (other than legislation 
appropriating funds) in order for the plan to meet the additional 
requirements imposed by the amendments made by this section, the State 
plan shall not be regarded as failing to comply with the requirements 
of such title solely on the basis of its failure to meet these 
additional requirements before the first day of the first calendar 
quarter beginning after the close of the first regular session of the 
State legislature that begins after the date of the enactment of this 
Act. For purposes of the previous sentence, in the case of a State that 
has a 2-year legislative session, each year of such session shall be 
deemed to be a separate regular session of the State legislature.

SEC. 9. 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 section 5(b), 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).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenditures made on or after July 1, 2006, whether or not 
regulations implementing such amendments have been issued.

SEC. 10. 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 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 2006, out of any funds in the 
Treasury not otherwise appropriated, $10,000,000, to remain available 
until expended.

SEC. 11. ADDITIONAL CHIP 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) 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) in determining cost-effectiveness, 
                        the Secretary shall measure against family 
                        coverage costs to the extent that a State has 
                        expanded coverage to parents pursuant to 
                        section 2111;
                            ``(ii) subject to clause (iii), 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
                            ``(iii) coverage under such subparagraph 
                        shall not be considered to violate clause (ii) 
                        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.''.
    (c) Effective Date.--The amendments made by this section apply as 
of January 1, 2006, whether or not regulations implementing such 
amendments have been issued.

SEC. 12. INCREASED FEDERAL REIMBURSEMENT FOR LANGUAGE SERVICES UNDER 
              THE MEDICAID PROGRAM AND TITLE XXI.

    (a) Medicaid.--Section 1903(a)(3) of the Social Security Act (42 
U.S.C. 1396b(a)(3)) is amended--
            (1) in subparagraph (D), by striking ``plus'' at the end 
        and inserting ``and''; and
            (2) by adding at the end the following:
                    ``(E) 90 percent of the sums expended with respect 
                to costs incurred during such quarter as are 
                attributable to the provision of language services, 
                including oral interpretation, translations of written 
                materials, and other language services, for individuals 
                with limited English proficiency who apply for, or 
                receive, medical assistance under the State plan; 
                plus''.
    (b) SCHIP.--Section 2105(a)(1) of the Social Security Act (42 
U.S.C.1397ee(a)) is amended--
            (1) in the matter preceding subparagraph (A), by inserting 
        ``or, in the case of expenditures described in subparagraph 
        (D)(iv), 90 percent'' after ``enhanced FMAP''; and
            (2) in subparagraph (D)--
                    (A) in clause (iii), by striking ``and'' at the 
                end;
                    (B) be redesignating clause (iv) as clause (v); and
                    (C) by inserting after clause (iii) the following:
                            ``(iv) for expenditures attributable to the 
                        provision of language services, including oral 
                        interpretation, translations of written 
                        materials, and other language services, for 
                        individuals with limited English proficiency 
                        who apply for, or receive, child health 
                        assistance under the plan; and''.
    (c) Effective Date.--The amendments made by this section take 
effect on January 1, 2006.
                                 <all>