[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5728 Introduced in House (IH)]








109th CONGRESS
  2d Session
                                H. R. 5728

   To amend titles XIX and XXI of the Social Security Act to provide 
  States with the option to expand or add coverage of pregnant women 
under the Medicaid and State children's health insurance programs, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 29, 2006

   Ms. DeGette (for herself and Mr. Walden of Oregon) 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 
  States with the option to expand or add coverage of pregnant women 
under the Medicaid and State children's health insurance programs, 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 ``Prevent 
Prematurity and Improve Child Health Act of 2006''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. State option to expand or add coverage of certain pregnant 
                            women under medicaid and SCHIP.
Sec. 3. Promoting cessation of tobacco use under the medicaid program.
Sec. 4. Promoting cessation of tobacco use under the maternal and child 
                            health services block grant program.
Sec. 5. State option to provide family planning services and supplies 
                            to individuals with incomes that do not 
                            exceed a State's income eligibility level 
                            for medical assistance.
Sec. 6. State option to extend the postpartum period for provision of 
                            family planning services and supplies.
Sec. 7. State option to provide wrap-around SCHIP coverage to children 
                            who have other health coverage.

SEC. 2. STATE OPTION TO EXPAND OR ADD COVERAGE OF CERTAIN PREGNANT 
              WOMEN UNDER MEDICAID AND SCHIP.

    (a) Medicaid.--
            (1) Authority to expand coverage.--Section 1902(l)(2)(A)(i) 
        of the Social Security Act (42 U.S.C. 1396a(l)(2)(A)(i)) is 
        amended by inserting ``(or such higher percentage as the State 
        may elect for purposes of expenditures for medical assistance 
        for pregnant women described in section 1905(u)(4)(A))'' after 
        ``185 percent''.
            (2) Enhanced matching funds available if certain conditions 
        met.--Section 1905 of the Social Security Act (42 U.S.C. 1396d) 
        is amended--
                    (A) in the fourth sentence of subsection (b), by 
                striking ``or subsection (u)(3)'' and inserting ``, 
                (u)(3), or (u)(4)''; and
                    (B) in subsection (u)--
                            (i) by redesignating paragraph (4) as 
                        paragraph (5); and
                            (ii) by inserting after paragraph (3) the 
                        following new paragraph:
    ``(4) For purposes of the fourth sentence of subsection (b) and 
section 2105(a), the expenditures described in this paragraph are the 
following:
            ``(A) Certain pregnant women.--If the conditions described 
        in subparagraph (B) 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 185 percent of the poverty line, but does not exceed 
        the income eligibility level established under title XXI for a 
        targeted low-income child.
            ``(B) Conditions.--The conditions described in this 
        subparagraph are the following:
                    ``(i) The State plans under this title and title 
                XXI do not provide coverage for pregnant women 
                described in subparagraph (A) with higher family income 
                without covering such pregnant women with a lower 
                family income.
                    ``(ii) The State does not apply an effective income 
                level for pregnant women that is lower than the 
                effective income level (expressed as a percent of the 
                poverty line and considering applicable income 
                disregards) that has been specified under the State 
                plan under subsection (a)(10)(A)(i)(III) or (l)(2)(A) 
                of section 1902, as of January 1, 2006, to be eligible 
                for medical assistance as a pregnant woman.
            ``(C) Definition of poverty line.--In this subsection, the 
        term `poverty line' has the meaning given such term in section 
        2110(c)(5).''.
            (3) Payment from title xxi allotment for medicaid expansion 
        costs; elimination of counting medicaid child presumptive 
        eligibility costs against title xxi allotment.--Section 
        2105(a)(1) of the Social Security Act (42 U.S.C. 1397ee(a)(1)) 
        is amended--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``(or, in the case of expenditures described 
                in subparagraph (B), the Federal medical assistance 
                percentage (as defined in the first sentence of section 
                1905(b)))''; and
                    (B) by striking subparagraph (B) and inserting the 
                following new subparagraph:
                    ``(B) for the provision of medical assistance that 
                is attributable to expenditures described in section 
                1905(u)(4)(A);''.
    (b) SCHIP.--
            (1) Coverage.--Title XXI of the Social Security Act (42 
        U.S.C. 1397aa et seq.) is amended by adding at the end the 
        following new section:

``SEC. 2111. OPTIONAL COVERAGE OF TARGETED LOW-INCOME PREGNANT WOMEN.

    ``(a) Optional Coverage.--Notwithstanding any other provision of 
this title, a State may provide for coverage, through an amendment to 
its State child health plan under section 2102, of pregnancy-related 
assistance for targeted low-income pregnant women in accordance with 
this section, but only if--
            ``(1) the State has established an 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 
        income official poverty line; and
            ``(2) the State meets the conditions described in section 
        1905(u)(4)(B).
    ``(b) Definitions.--For purposes of this title:
            ``(1) Pregnancy-related assistance.--The term `pregnancy-
        related assistance' has the meaning given the term child health 
        assistance in section 2110(a) as if any reference to targeted 
        low-income children were a reference to targeted low-income 
        pregnant women, except that the assistance shall be limited to 
        services related to pregnancy (which include prenatal, 
        delivery, and postpartum services and services described in 
        section 1905(a)(4)(C)) and to other conditions that may 
        complicate pregnancy.
            ``(2) Targeted low-income pregnant woman.--The term 
        `targeted low-income pregnant woman' means a woman--
                    ``(A) during pregnancy and through the end of the 
                month in which the 60-day period (beginning on the last 
                day of her pregnancy) ends;
                    ``(B) whose family income exceeds the effective 
                income level (expressed as a percent of the poverty 
                line and considering applicable income disregards) that 
                has been specified under subsection (a)(10)(A)(i)(III) 
                or (l)(2)(A) of section 1902, as of January 1, 2006, to 
                be eligible for medical assistance as a pregnant woman 
                under title XIX but does not exceed the income 
                eligibility level established under the State child 
                health plan under this title for a targeted low-income 
                child; and
                    ``(C) who satisfies the requirements of paragraphs 
                (1)(A), (1)(C), (2), and (3) of section 2110(b).
    ``(c) References to Terms and Special Rules.--In the case of, and 
with respect to, a State providing for coverage of pregnancy-related 
assistance to targeted low-income pregnant women under subsection (a), 
the following special rules apply:
            ``(1) Any reference in this title (other than in subsection 
        (b)) to a targeted low-income child is deemed to include a 
        reference to a targeted low-income pregnant woman.
            ``(2) Any such reference to child health assistance with 
        respect to such women is deemed a reference to pregnancy-
        related assistance.
            ``(3) Any such reference to a child is deemed a reference 
        to a woman during pregnancy and the period described in 
        subsection (b)(2)(A).
            ``(4) 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 pregnant women.
            ``(5) There shall be no exclusion of benefits for services 
        described in subsection (b)(1) based on any preexisting 
        condition and no waiting period (including any waiting period 
        imposed to carry out section 2102(b)(3)(C)) shall apply.
            ``(6) Subsection (a) of section 2103 (relating to required 
        scope of health insurance coverage) shall not apply insofar as 
        a State limits coverage to services described in subsection 
        (b)(1) and the reference to such section in section 
        2105(a)(1)(C) is deemed not to require, in such case, 
        compliance with the requirements of section 2103(a).
            ``(7) In applying section 2103(e)(3)(B) in the case of a 
        pregnant woman provided coverage under this section, the 
        limitation on total annual aggregate cost-sharing shall be 
        applied to such pregnant woman.
            ``(8) The reference in section 2107(e)(1)(D) to section 
        1920A (relating to presumptive eligibility for children) is 
        deemed a reference to section 1920 (relating to presumptive 
        eligibility for pregnant women).
    ``(d) Automatic Enrollment for Children Born to Women Receiving 
Pregnancy-Related Assistance.--If a child is born to a targeted low-
income pregnant woman who was receiving pregnancy-related assistance 
under this section on the date of the child's birth, the child shall be 
deemed to have applied for child health assistance under the State 
child health plan and to have been found eligible for such assistance 
under such plan or to have applied for medical assistance under title 
XIX and to have been found eligible for such assistance under such 
title, as appropriate, on the date of such birth and to remain eligible 
for such assistance until the child attains 1 year of age. During the 
period in which a child is deemed under the preceding sentence to be 
eligible for child health or medical assistance, the child health or 
medical assistance eligibility identification number of the mother 
shall also serve as the identification number of the child, and all 
claims shall be submitted and paid under such number (unless the State 
issues a separate identification number for the child before such 
period expires).''.
            (2) Additional allotments for providing coverage of 
        pregnant women.--
                    (A) In general.--Section 2104 of the Social 
                Security Act (42 U.S.C. 1397dd) is amended by adding at 
                the end the following new subsection:
    ``(h) Additional Allotments for Providing Coverage of Pregnant 
Women.--
            ``(1) Appropriation; total allotment.--For the purpose of 
        providing additional allotments to States under this title, 
        there is appropriated, out of any money in the Treasury not 
        otherwise appropriated, for each of fiscal years 2007 through 
        2010, $200,000,000.
            ``(2) State and territorial allotments.--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--
                    ``(A) in the case of such a State other than a 
                commonwealth or territory described in subparagraph 
                (B), the same proportion as the proportion of the 
                State's allotment under subsection (b) (determined 
                without regard to subsection (f)) to the total amount 
                of the allotments under subsection (b) for such States 
                eligible for an allotment under this paragraph for such 
                fiscal year; and
                    ``(B) in the case of a commonwealth or territory 
                described in subsection (c)(3), the same proportion as 
                the proportion of the commonwealth's or territory's 
                allotment under subsection (c) (determined without 
                regard to subsection (f)) to the total amount of the 
                allotments under subsection (c) for commonwealths and 
                territories eligible for an allotment under this 
                paragraph for such fiscal year.
            ``(3) Use of additional allotment.--Additional allotments 
        provided under this subsection are not available for amounts 
        expended before October 1, 2006. 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 
        pregnancy-related assistance for targeted low-income pregnant 
        women.
            ``(4) No payments unless election to expand coverage of 
        pregnant women.--No payments may be made to a State under this 
        title from an allotment provided under this subsection unless 
        the State provides pregnancy-related assistance for targeted 
        low-income pregnant women under this title, or provides medical 
        assistance for pregnant women under title XIX, whose family 
        income 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.''.
                    (B) Conforming amendments.--Section 2104 of the 
                Social Security Act (42 U.S.C. 1397dd) is amended--
                            (i) in subsection (a), in the matter 
                        preceding paragraph (1), by inserting ``subject 
                        to subsection (h),'' after ``under this 
                        section,'';
                            (ii) in subsection (b)(1), by inserting 
                        ``and subsection (h)'' after ``Subject to 
                        paragraph (4)''; and
                            (iii) in subsection (c)(1), by inserting 
                        ``subject to subsection (h),'' after ``for a 
                        fiscal year,''.
            (3) Additional conforming amendments.--
                    (A) 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 ``or 
                        pregnancy-related services'' after ``preventive 
                        services''; and
                            (ii) by inserting before the period at the 
                        end the following: ``or for pregnancy-related 
                        services''.
                    (B) No waiting period.--Section 2102(b)(1)(B) (42 
                U.S.C. 1397bb(b)(1)(B)) is amended--
                            (i) in clause (i), by striking ``, and'' at 
                        the end and inserting a semicolon;
                            (ii) in clause (ii), by striking the period 
                        at the end and inserting ``; and''; and
                            (iii) 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 a targeted 
                        low-income pregnant woman.''.
    (c) Authority for States That Provide Medicaid or SCHIP Coverage 
for Pregnant Women With Income Above 185 Percent of the Poverty Line To 
Use Portion of SCHIP Funds for Medicaid Expenditures.--Section 2105(g) 
of the Social Security Act (42 U.S.C. 1397ee(g)) is amended--
            (1) in the subsection heading, by inserting ``and certain 
        pregnancy coverage expansion states'' after ``qualifying 
        states'';
            (2) by adding at the end the following:
            ``(4) Special authority for certain pregnancy coverage 
        expansion states.--
                    ``(A) In general.--In the case of a State that, as 
                of the date of enactment of the Prevent Prematurity and 
                Improve Child Health Act of 2006, has an income 
                eligibility standard under title XIX or this title 
                (under section 1902(a)(10)(A) or under a statewide 
                waiver in effect under section 1115 with respect to 
                title XIX or this title) that is at least 185 percent 
                of the poverty line with respect to pregnant women, the 
                State may elect to use not more than 20 percent of any 
                allotment under section 2104 for any fiscal year 
                (insofar as it is available under subsections (e) and 
                (g) of such section) for payments under title XIX in 
                accordance with subparagraph (B), instead of for 
                expenditures under this title.
                    ``(B) Payments to states.--
                            ``(i) In general.--In the case of a State 
                        described in subparagraph (A) that has elected 
                        the option described in that subparagraph, 
                        subject to the availability of funds under such 
                        subparagraph and, if applicable, paragraph 
                        (1)(A), with respect to the State, the 
                        Secretary shall pay the State an amount each 
                        quarter equal to the additional amount that 
                        would have been paid to the State under title 
                        XIX with respect to expenditures described in 
                        clause (ii) if the enhanced FMAP (as determined 
                        under subsection (b)) had been substituted for 
                        the Federal medical assistance percentage (as 
                        defined in section 1905(b)).
                            ``(ii) Expenditures described.--For 
                        purposes of this subparagraph, the expenditures 
                        described in this clause are expenditures, made 
                        after the date of the enactment of this 
                        paragraph and during the period in which funds 
                        are available to the State for use under 
                        subparagraph (A), for medical assistance under 
                        title XIX for pregnant women whose family 
                        income is at least 185 percent of the poverty 
                        line.
                            ``(iii) No impact on determination of 
                        budget neutrality for waivers.--In the case of 
                        a State described in subparagraph (A) that uses 
                        amounts paid under this paragraph for 
                        expenditures described in clause (ii) that are 
                        incurred under a waiver approved for the State, 
                        any budget neutrality determinations with 
                        respect to such waiver shall be determined 
                        without regard to such amounts paid.''; and
            (3) in paragraph (3), by striking ``and (2)'' and inserting 
        ``(2), and (4)''.
    (d) Other Amendments to Medicaid.--
            (1) Eligibility of a newborn.--Section 1902(e)(4) of the 
        Social Security Act (42 U.S.C. 1396a(e)(4)) is amended in the 
        first sentence by striking ``so long as the child is a member 
        of the woman's household and the woman remains (or would remain 
        if pregnant) eligible for such assistance''.
            (2) Application of qualified entities 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 after paragraph (2) the following flush sentence:
    ``The term `qualified provider' includes a qualified entity as 
defined in section 1920A(b)(3).''.
    (e) Effective Date.--The amendments made by this section apply to 
items and services furnished on or after October 1, 2006, without 
regard to whether regulations implementing such amendments have been 
promulgated.

SEC. 3. PROMOTING CESSATION OF TOBACCO USE UNDER THE MEDICAID PROGRAM.

    (a) Dropping Exception From Medicaid Prescription Drug Coverage for 
Tobacco Cessation Medications.--Section 1927(d)(2) of the Social 
Security Act (42 U.S.C. 1396r-8(d)(2)) is amended--
            (1) by striking subparagraph (E);
            (2) by redesignating subparagraphs (F) through (J) as 
        subparagraphs (E) through (I), respectively; and
            (3) in subparagraph (F) (as redesignated by paragraph (2)), 
        by inserting before the period at the end the following: ``, 
        except agents approved by the Food and Drug Administration for 
        purposes of promoting, and when used to promote, tobacco 
        cessation''.
    (b) Requiring Coverage of Tobacco Cessation Counseling Services for 
Pregnant Women.--Section 1905 of the Social Security Act (42 U.S.C. 
1396d(a)(4)) is amended--
            (1) in subsection (a)(4)--
                    (A) by striking ``and'' before ``(C)''; and
                    (B) by inserting before the semicolon at the end 
                the following new subparagraph: ``; and (D) counseling 
                for cessation of tobacco use (as defined in subsection 
                (x)) for pregnant women''; and
            (2) by adding at the end the following:
    ``(x)(1) For purposes of this title, the term `counseling for 
cessation of tobacco use' means therapy and counseling for cessation of 
tobacco use for pregnant women who use tobacco products or who are 
being treated for tobacco use that is furnished--
            ``(A) by or under the supervision of a physician; or
            ``(B) by any other health care professional who--
                    ``(i) is legally authorized to furnish such 
                services under State law (or the State regulatory 
                mechanism provided by State law) of the State in which 
                the services are furnished; and
                    ``(ii) is authorized to receive payment for other 
                services under this title or is designated by the 
                Secretary for this purpose.
    ``(2) Subject to paragraph (3), such term is limited to--
            ``(A) therapy and counseling services recommended in 
        `Treating Tobacco Use and Dependence: A Clinical Practice 
        Guideline', published by the Public Health Service in June 
        2000, or any subsequent modification of such Guideline; and
            ``(B) such other therapy and counseling services that the 
        Secretary recognizes to be effective.
    ``(3) Such term shall not include coverage for drugs or biologicals 
that are not otherwise covered under this title.''.
    (c) Removal of Cost-Sharing for Tobacco Cessation Counseling 
Services for Pregnant Women.--Section 1916 of the Social Security Act 
(42 U.S.C. 1396o) is amended in each of subsections (a)(2)(B) and 
(b)(2)(B) by inserting ``, and counseling for cessation of tobacco use 
(as defined in section 1905(x))'' after ``complicate the pregnancy''.
    (d) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after the date that is 1 year after 
the date of enactment of this Act.

SEC. 4. PROMOTING CESSATION OF TOBACCO USE UNDER THE MATERNAL AND CHILD 
              HEALTH SERVICES BLOCK GRANT PROGRAM.

    (a) Quality Maternal and Child Health Services Includes Tobacco 
Cessation Counseling and Medications.--
            (1) In general.--Section 501 of the Social Security Act (42 
        U.S.C. 701) is amended by adding at the end the following new 
        subsection:
    ``(d) For purposes of this title, counseling for cessation of 
tobacco use (as defined in section 1905(x)), drugs and biologicals used 
to promote smoking cessation, and the inclusion of antitobacco messages 
in health promotion counseling shall be considered to be part of 
quality maternal and child health services.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date that is 1 year after the date of 
        enactment of this Act.
    (b) Evaluation of National Core Performance Measures.--
            (1) In general.--The Administrator of the Health Resources 
        and Services Administration shall assess the current national 
        core performance measures and national core outcome measures 
        utilized under the Maternal and Child Health Block Grant under 
        title V of the Social Security Act (42 U.S.C. 701 et seq.) for 
        purposes of expanding such measures to include some of the 
        known causes of low birthweight and prematurity, including the 
        percentage of infants born to pregnant women who smoked during 
        pregnancy.
            (2) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Administrator of the Health 
        Resources and Services Administration shall submit to the 
        appropriate committees of Congress a report concerning the 
        results of the evaluation conducted under paragraph (1).

SEC. 5. STATE OPTION TO PROVIDE FAMILY PLANNING SERVICES AND SUPPLIES 
              TO INDIVIDUALS WITH INCOMES THAT DO NOT EXCEED A STATE'S 
              INCOME ELIGIBILITY LEVEL FOR MEDICAL ASSISTANCE.

    (a) In General.--Title XIX of the Social Security Act (42 U.S.C. 
1396 et seq.) is amended--
            (1) by redesignating section 1938 as section 1939; and
            (2) by inserting after section 1937 the following new 
        section:

    ``state option to provide family planning services and supplies

                              ``In General

    ``Sec. 1938. (a) Subject to subsections (b) and (c), a State may 
elect (through a State plan amendment) to make medical assistance 
described in section 1905(a)(4)(C) available to any individual whose 
family income does not exceed the greater of--
            ``(1) 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; or
            ``(2) the eligibility income level (expressed as a 
        percentage of such poverty line) that has been specified under 
        a waiver authorized by the Secretary or under section 
        1902(r)(2)), as of October 1, 2006, for an individual to be 
        eligible for medical assistance under the State plan.

                            ``Comparability

    ``(b) Medical assistance described in section 1905(a)(4)(C) that is 
made available under a State plan amendment under subsection (a) 
shall--
            ``(1) not be less in amount, duration, or scope than the 
        medical assistance described in that section that is made 
        available to any other individual under the State plan; and
            ``(2) be provided in accordance with the restrictions on 
        deductions, cost sharing, or similar charges imposed under 
        section 1916(a)(2)(D).

      ``Option to Extend Coverage During a Post-Eligibility Period

    ``(c)
            ``(1) Initial Period.--A State plan amendment made under 
        subsection (a) may provide that any individual who was 
        receiving medical assistance described in section 1905(a)(4)(C) 
        as a result of such amendment, and who becomes ineligible for 
        such assistance because of hours of, or income from, 
        employment, may remain eligible for such medical assistance 
        through the end of the 6-month period that begins on the first 
        day the individual becomes so ineligible.
            ``(2) Additional Extension.--A State plan amendment made 
        under subsection (a) may provide that any individual who has 
        received medical assistance described in section 1905(a)(4)(C) 
        during the entire 6-month period described in paragraph (1) may 
        be extended coverage for such assistance for a succeeding 6-
        month period.''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
medical assistance provided on and after October 1, 2006.

SEC. 6. STATE OPTION TO EXTEND THE POSTPARTUM PERIOD FOR PROVISION OF 
              FAMILY PLANNING SERVICES AND SUPPLIES.

    (a) In General.--Section 1902(e)(5) of the Social Security Act (42 
U.S.C. 1396a(e)(5)) is amended--
            (1) by striking ``eligible under the plan, as though'' and 
        inserting ``eligible under the plan--
            ``(A) as though'';
            (2) by striking the period and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
            ``(B) for medical assistance described in section 
        1905(a)(4)(C) for so long as the family income of such woman 
        does not exceed the maximum income level established by the 
        State for the woman to be eligible for medical assistance under 
        the State plan (as a result of pregnancy or otherwise).''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
medical assistance provided on and after October 1, 2006.

SEC. 7. STATE OPTION TO PROVIDE WRAP-AROUND SCHIP COVERAGE TO CHILDREN 
              WHO HAVE OTHER HEALTH COVERAGE.

    (a) In General.--
            (1) SCHIP.--
                    (A) State option to provide wrap-around coverage.--
                Section 2110(b) of the Social Security Act (42 U.S.C. 
                1397jj(b)) is amended--
                            (i) in paragraph (1)(C), by inserting ``, 
                        subject to paragraph (5),'' after ``under title 
                        XIX or''; and
                            (ii) by adding at the end the following:
            ``(5) State option to provide wrap-around coverage.--A 
        State may waive the requirement of paragraph (1)(C) that a 
        targeted low-income child may not be covered under a group 
        health plan or under health insurance coverage, if the State 
        satisfies the conditions described in subsection (c)(8). The 
        State may waive such requirement in order to provide--
                    ``(A) services for a child with special health care 
                needs; or
                    ``(B) all services.
        In waiving such requirement, a State may limit the application 
        of the waiver to children whose family income does not exceed a 
        level specified by the State, so long as the level so specified 
        does not exceed the maximum income level otherwise established 
        for other children under the State child health plan .''.
                    (B) Conditions described.--Section 2105(c) of the 
                Social Security Act (42 U.S.C. 1397ee(c)) is amended by 
                adding at the end the following:
            ``(8) Conditions for provision of wrap-around coverage.--
        For purposes of section 2110(b)(5), the conditions described in 
        this paragraph are the following:
                    ``(A) Income eligibility.--The State child health 
                plan (whether implemented under title XIX or this 
                XXI)--
                            ``(i) has the highest income eligibility 
                        standard permitted under this title as of 
                        January 1, 2006;
                            ``(ii) subject to subparagraph (B), does 
                        not limit the acceptance of applications for 
                        children; and
                            ``(iii) provides benefits to all children 
                        in the State who apply for and meet eligibility 
                        standards.
                    ``(B) No waiting list imposed.--With respect to 
                children whose family income is at or below 200 percent 
                of the poverty line, the State does not impose any 
                numerical limitation, waiting list, or similar 
                limitation on the eligibility of such children for 
                child health assistance under such State plan.
                    ``(C) No more favorable treatment.--The State child 
                health plan may not provide more favorable coverage of 
                dental services to the children covered under section 
                2110(b)(5) than to children otherwise covered under 
                this title.''.
                    (C) State option to waive waiting period.--Section 
                2102(b)(1)(B) of the Social Security Act (42 U.S.C. 
                1397bb(b)(1)(B)), as amended by section 2(b)(3)(B), is 
                amended--
                            (i) in clause (ii), by striking ``, and'' 
                        at the end and inserting a semicolon;
                            (ii) in clause (iii), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new clause:
                            ``(iv) at State option, may not apply a 
                        waiting period in the case of a child described 
                        in section 2110(b)(5), if the State satisfies 
                        the requirements of section 2105(c)(8).''.
            (2) Application of enhanced match under medicaid.--Section 
        1905 of the Social Security Act (42 U.S.C. 1396d), as amended 
        by section 2(a)(2), is amended--
                    (A) in subsection (b), in the fourth sentence, by 
                striking ``or (u)(4)'' and inserting ``(u)(4), or 
                (u)(5)''; and
                    (B) in subsection (u)--
                            (i) by redesignating paragraph (5) as 
                        paragraph (6); and
                            (ii) by inserting after paragraph (4) the 
                        following:
            ``(5) For purposes of subsection (b), the expenditures 
        described in this paragraph are expenditures for items and 
        services for children described in section 2110(b)(5), but only 
        in the case of a State that satisfies the requirements of 
        section 2105(c)(8).''.
            (3) Application of secondary payor provisions.--Section 
        2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)) 
        is amended by redesignating subparagraphs (B) through (D) as 
        subparagraphs (C) through (E) and by inserting after 
        subparagraph (A) the following new subparagraph:
                    ``(B) Section 1902(a)(25) (relating to coordination 
                of benefits and secondary payor provisions) with 
                respect to children covered under a waiver described in 
                section 2110(b)(5).''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on January 1, 2006, and shall apply to child health 
assistance and medical assistance provided on or after that date.
                                 <all>