II 109th CONGRESS 1st Session S. 2137 IN THE SENATE OF THE UNITED STATES December 16, 2005 Mr. Durbin introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend title XXI of the Social Security Act to make all uninsured children eligible for the State children’s health insurance program, to encourage States to increase the number of children enrolled in the medicaid and State children’s health insurance programs by simplifying the enrollment and renewal procedures for those programs, and for other purposes.

1.

Short title

This Act may be cited as the All Kids Health Insurance Coverage Act of 2005.

2.

Findings

The Senate finds the following: (1)There are more than 9,000,000 children in the United States with no health insurance coverage. (2)Uninsured children, when compared to privately insured children, are— (A)3.5 times more likely to have gone without needed medical, dental, or other health care; (B)4 times more likely to have delayed seeking medical care; (C)5 times more likely to go without needed prescription drugs; and (D)6.5 times less likely to have a regular source of care. (3)Children without health insurance coverage are at a disadvantage in the classroom, as shown by the following studies: (A)The Florida Healthy Kids Annual Report published in 1997, found that children who do not have health care coverage are 25 percent more likely to miss school. (B)A study of the California Health Families program found that children enrolled in public health coverage experienced a 68 percent improvement in school performance and school attendance. (C)A 2002 Building Bridges to Healthy Kids and Better Students study conducted by the Council of Chief State School Officers in Vermont concluded that children who started out without health insurance saw their reading scores more than double after obtaining health care coverage. (4)More than half of uninsured children in the United States are eligible for coverage under either the State Children's Health Insurance Program (SCHIP) or Medicaid, but are not enrolled in those safety net programs. (5)Some States, seeing that the Federal Government is not providing assistance to middle class families who are unable to afford health insurance, are trying to extend health care coverage to some or all children in the State. (6)State efforts to cover all children may not be successful without financial assistance from the Federal Government.

3.

Eligibility of all uninsured children for SCHIP

(a)

In General

Section 2110(b) of the Social Security Act (42 U.S.C. 1397jj(b)) is amended— (1)in paragraph (1)— (A)by striking subparagraph (B); and (B)by redesignating subparagraph (C) as subparagraph (B); (2)in paragraph (2)— (A)by striking include and all that follows through a child who is an and inserting include a child who is an; and (B)by striking the semicolon and all that follows through the period and inserting a period; and (3)by striking paragraph (4). (b)

No Exclusion of Children With Access to High-Cost Coverage

Section 2110(b)(3) of the Social Security Act (42 U.S.C. 1397jj(b)(3)) is amended— (1)in the paragraph heading, by striking rule and inserting rules; (2)by striking A child shall not be considered to be described in paragraph (1)(C) and inserting the following: (A)

Certain non federally funded coverage

A child shall not be considered to be described in paragraph (1)(C) ; and (3)by adding at the end the following: (B)

No exclusion of children with access to high-cost coverage

A State may include a child as a targeted vulnerable child if the child has access to coverage under a group health plan or health insurance coverage and the total annual aggregate cost for premiums, deductibles, cost sharing, and similar charges imposed under the group health plan or health insurance coverage with respect to all targeted vulnerable children in the child’s family exceeds 5 percent of such family’s income for the year involved. . (c)

Conforming Amendments

(1)Titles XIX and XXI of the Social Security Act (42 U.S.C. 1396 et seq.; 1397aa et. seq.) are amended by striking targeted low-income each place it appears and inserting targeted vulnerable. (2)Section 2101(a) of such Act (42 U.S.C. 1397aa(a)) is amended by striking uninsured, low-income and inserting low-income. (3)Section 2102(b)(3)(C) of such Act (42 U.S.C. 1397bb(b)(3)(C)) is amended by inserting , particularly with respect to children whose family income exceeds 200 percent of the poverty line before the semicolon. (4)Section 2102(b)(3)(E), section 2105(a)(1)(D)(ii), paragraphs (1)(C) and (2) of section 2107, and subsections (a)(1) and (d)(1)(B) of section 2108 of such Act (42 U.S.C. 1397bb(b)(3)(E); 1397ee(a)(1)(D)(ii); 1397gg; 1397hh) are amended by striking low-income each place it appears. (5)Section 2110(a)(27) of such Act (42 U.S.C. 1397jj(a)(27)) is amended by striking eligible low-income individuals and inserting targeted vulnerable individuals. (d)

Effective Date

The amendments made by this section take effect on October 1, 2006.

4.

Increase in Federal financial participation under SCHIP and medicaid for States with simplified enrollment and renewal procedures for children

(a)

SCHIP

Section 2105(c)(2) of the Social Security Act (42 U.S.C. 1397ee(c)(2)) is amended by adding at the end the following: (C)

Nonapplication of limitation and increase in federal payment for states with simplified enrollment and renewal procedures

(i)

In general

Notwithstanding subsection (a)(1) and subparagraph (A)— (I)the limitation under subparagraph (A) on expenditures for items described in subsection (a)(1)(D) shall not apply with respect to expenditures incurred to carry out any of the outreach strategies described in clause (ii), but only if the State carries out the same outreach strategies for children under title XIX; and (II)the enhanced FMAP for a State for a fiscal year otherwise determined under subsection (b) shall be increased by 5 percentage points (without regard to the application of the 85 percent limitation under that subsection) with respect to such expenditures. (ii)

Outreach strategies described

For purposes of clause (i), the outreach strategies described in this clause are the following: (I)

Presumptive eligibility

The State provides for presumptive eligibility for children under this title and under title XIX. (II)

Adoption of 12-month continuous eligibility

The State provides that eligibility for children shall not be redetermined more often than once every year under this title or under title XIX. (III)

Elimination of asset test

The State does not apply any asset test for eligibility under this title or title XIX with respect to children. (IV)

Passive renewal

The State provides for the automatic renewal of the eligibility of children for assistance under this title and under title XIX if the family of which such a child is a member does not report any changes to family income or other relevant circumstances, subject to verification of information from State databases. . (b)

Medicaid

(1)

In general

Section 1902(l) of the Social Security Act (42 U.S.C. 1396a(l)) is amended— (A)in paragraph (3), by inserting subject to paragraph (5), after Notwithstanding subsection (a)(17),; and (B)by adding at the end the following: (5)(A)Notwithstanding the first sentence of section 1905(b), with respect to expenditures incurred to carry out any of the outreach strategies described in subparagraph (B) for individuals under 19 years of age who are eligible for medical assistance under subsection (a)(10)(A), the Federal medical assistance percentage is equal to the enhanced FMAP described in section 2105(b) and increased under section 2105(c)(2)(C)(i)(II), but only if the State carries out the same outreach strategies for children under title XXI. (B)For purposes of subparagraph (A), the outreach strategies described in this subparagraph are the following: (i)

Presumptive eligibility

The State provides for presumptive eligibility for such individuals under this title and title XXI. (ii)

Adoption of 12-month continuous eligibility

The State provides that eligibility for such individuals shall not be redetermined more often than once every year under this title or under title XXI. (iii)

Elimination of asset test

The State does not apply any asset test for eligibility under this title or title XXI with respect to such individuals. (iv)

Passive renewal

The State provides for the automatic renewal of the eligibility of such individuals for assistance under this title and under title XXI if the family of which such an individual is a member does not report any changes to family income or other relevant circumstances, subject to verification of information from State databases. . (2)

Conforming amendment

The first sentence of section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) is amended by striking section 1933(d) and inserting sections 1902(l)(5) and 1933(d). (c)

Effective Date

The amendments made by this section take effect on October 1, 2006.

5.

Limitation on payments to States that have an enrollment cap but have not exhausted the state’s available allotments

(a)

In General

Section 2105 of the Social Security Act (42 U.S.C. 1397ee) is amended by adding at the end the following: (h)

Limitation on Payments to States That Have an Enrollment Cap but Have Not Exhausted the State’s Available Allotments

(1)

In general

Notwithstanding any other provision of this section, payment shall not be made to a State under this section if the State has an enrollment freeze, enrollment cap, procedures to delay consideration of, or not to consider, submitted applications for child health assistance, or a waiting list for the submission or consideration of such applications or for such assistance, and the State has not fully expended the amount of all allotments available with respect to a fiscal year for expenditure by the State, including allotments for prior fiscal years that remain available for expenditure during the fiscal year under subsection (c) or (g) of section 2104 or that were redistributed to the State under subsection (f) or (g) of section 2104. (2)

Rule of construction

Paragraph (1) shall not be construed as prohibiting a State from establishing regular open enrollment periods for the submission of applications for child health assistance. . (b)

Effective Date

The amendments made by this section take effect on October 1, 2006.

6.

Additional enhancement to FMAP to promote expansion of coverage to all uninsured children under Medicaid and SCHIP

(a)

In general

Title XXI (42 U.S.C. 1397aa et seq.) is amended by adding at the end the following:

2111.

Additional enhancement to FMAP to promote expansion of coverage to all uninsured children under medicaid and SCHIP

(a)

In general

Notwithstanding subsection (b) of section 2105 (and without regard to the application of the 85 percent limitation under that subsection), the enhanced FMAP with respect to expenditures in a quarter for providing child health assistance to uninsured children whose family income exceeds 200 percent of the poverty line, shall be increased by 5 percentage points. (b)

Uninsured child defined

(1)

In general

For purposes of subsection (a), subject to paragraph (2), the term uninsured child means an uncovered child who has been without creditable coverage for a period determined by the Secretary, except that such period shall not be less than 6 months. (2)

Special rule for newborn children

In the case of a child 12 months old or younger, the period determined under paragraph (1) shall be 0 months and such child shall be considered uninsured upon birth. (3)

Special rule for children losing medicaid or SCHIP coverage due to increased family income

In the case of a child who, due to an increase in family income, becomes ineligible for coverage under title XIX or this title during the period beginning on the date that is 12 months prior to the date of enactment of the All Kids Health Insurance Coverage Act of 2005 and ending on the date of enactment of such Act, the period determined under paragraph (1) shall be 0 months and such child shall be considered uninsured upon the date of enactment of the All Kids Health Insurance Coverage Act of 2005. (4)

Monitoring and adjustment of period required to be uninsured

The Secretary shall— (A)monitor the availability and retention of employer-sponsored health insurance coverage of dependent children; and (B)adjust the period determined under paragraph (1) as needed for the purpose of promoting the retention of private or employer-sponsored health insurance coverage of dependent children and timely access to health care services for such children.

. (b)

Cost-sharing for children in families with high family income

Section 2103(e)(3) of the Social Security Act (42 U.S.C. 1397cc(e)(3)) is amended by adding at the end the following new subparagraph: (C)

Children in families with high family income

(i)

In general

For children not described in subparagraph (A) whose family income exceeds 400 percent of the poverty line for a family of the size involved, subject to paragraphs (1)(B) and (2), the State shall impose a premium that is not less than the cost of providing child health assistance to children in such families, and deductibles, cost sharing, or similar charges shall be imposed under the State child health plan (without regard to a sliding scale based on income), except that the total annual aggregate cost-sharing with respect to all such children in a family under this title may not exceed 5 percent of such family's income for the year involved. (ii)

Inflation adjustment

The dollar amount specified in clause (i) shall be increased, beginning with fiscal year 2008, from year to year based on the percentage increase in the consumer price index for all urban consumers (all items; United States city average). Any dollar amount established under this clause that is not a multiple of $100 shall be rounded to the nearest multiple of $100. . (c)

Additional allotments for states providing coverage to all uninsured children in the state

(1)

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 States providing coverage to all uninsured children in the State

(1)

Appropriation; total allotment

For the purpose of providing additional allotments to States to provide coverage of all uninsured children (as defined in section 2111(b)) in the State under the State child health plan, there is appropriated, out of any money in the Treasury not otherwise appropriated— (A)for fiscal years 2007, 2008, and 2009, $3,000,000,000; (B)for fiscal year 2010, $5,000,000,000; and (C)for fiscal year 2011, $7,000,000,000. (2)

State and territorial allotments

(A)

In general

In addition to the allotments provided under subsections (b) and (c), subject to subparagraph (B) and 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 that provides coverage of all uninsured children (as so defined) in the State approved under this title— (i)in the case of such a State other than a commonwealth or territory described in subsection (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)

Minimum allotment

(i)

In general

No allotment to a State for a fiscal year under this subsection shall be less than 50 percent of the amount of the allotment to the State determined under subsections (b) and (c) for the preceding fiscal year. (ii)

Pro rata reductions

The Secretary shall make such pro rata reductions to the allotments determined under this subsection as are necessary to comply with the requirements of clause (i). (C)

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 uninsured children (as defined in section 2111(b)). (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 child health assistance for all uninsured children (as so defined) in the State, including such children whose family income exceeds 200 percent of the poverty line. . (2)

Conforming amendments

Section 2104 of the Social Security Act (42 U.S.C. 1397dd) is amended— (A)in subsection (a), by inserting subject to subsection (d), after under this section,; (B)in subsection (b)(1), by inserting and subsection (d) after Subject to paragraph (4); and (C)in subsection (c)(1), by inserting subject to subsection (d), after for a fiscal year,. (d)

Effective date

The amendments made by this section take effect on October 1, 2006.

7.

Repeal of the scheduled phaseout of the limitations on personal exemptions and itemized deductions

(a)

In general

The Internal Revenue Code of 1986 is amended— (1)by striking subparagraphs (E) and (F) of section 151(d)(3), and (2)by striking subsections (f) and (g) of section 68. (b)

Effective Date

The amendments made by this section shall apply to taxable years beginning after December 31, 2005. (c)

Application of EGTRRA sunset

The amendments made by this section shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 to the same extent and in the same manner as the provision of such Act to which such amendment relates.