Short title; table of contents

(a)

Short title

This Act may be cited as the

SCHIP Reauthorization and Reform Act of 2007

. (b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Requiring outreach and coverage before expansion of eligibility.

Sec. 3. Application of citizenship documentation requirements; increased Federal matching rate for citizenship documentation enforcement under Medicaid and SCHIP.

Sec. 4. Limitations on eligibility based on substantial net assets.

Sec. 5. Clarification of State authorities.

Sec. 6. Easing administrative barriers to State cooperation with employer-sponsored insurance coverage.

Sec. 7. Improving beneficiary choice in SCHIP.

Sec. 8. Allotment distribution formula.

Sec. 9. Five-year reauthorization.

Sec. 10. Enhancing the programmatic focus on children and pregnant women.

Requiring outreach and coverage before expansion of eligibility

(a)

State plan required To specify how it will achieve coverage for 90 percent of targeted low-income children

(1)

In general

Section 2102(a) of the Social Security Act (42 U.S.C. 1397bb(a)) is amended— (A)in paragraph (6), by striking and at the end; (B)in paragraph (7), by striking the period at the end and inserting ; and; and (C)by adding at the end the following new paragraph:

(8)how the eligibility and benefits provided for under the plan for each fiscal year (beginning with fiscal year 2009) will allow for the State's annual funding allotment to cover at least 90 percent of the eligible targeted low-income children in the State.

(2)

Effective date

The amendments made by paragraph (1) shall apply to State child health plans for fiscal years beginning with fiscal year 2009. (b)

Limitation on program expansions until lowest income eligible individuals enrolled

Section 2105(c) of such Act (42 U.S.C. 1397dd(c)) is amended by adding at the end the following new paragraph:

(8)

Limitation on increased coverage of higher income children

For child health assistance furnished in a fiscal year beginning with fiscal year 2008: (A)

No payment for children with family income above 250 percent of poverty line

Payment shall not be made under this section for child health assistance for a targeted low-income child in a family the income of which exceeds 250 percent of the poverty line applicable to a family of the size involved. (B)

Special rules for payment for children with family income above 200 percent of poverty line

In the case of child health assistance for a targeted low-income child in a family the income of which exceeds 200 percent (but does not exceed 250 percent) of the poverty line applicable to a family of the size involved no payment shall be made under this section for such assistance unless the State demonstrates to the satisfaction of the Secretary that— (i)the State has met the 90 percent retrospective coverage test specified in subparagraph (C)(i) for the previous fiscal year; and (ii)the State will meet the 90 percent prospective coverage test specified in subparagraph (C)(ii) for the fiscal year. (C)

90 percent coverage tests

(i)

Retrospective test

The 90 percent retrospective coverage test specified in this clause is, for a State for a fiscal year, that on average during the fiscal year, the State has enrolled under this title or title XIX at least 90 percent of the individuals residing in the State who— (I)are children under 19 years of age (or are pregnant women) and are eligible for medical assistance under title XIX; or (II)are targeted low-income children whose family income does not exceed 200 percent of the poverty line and who are eligible for child health assistance under this title. (ii)

Prospective test

The 90 percent prospective test specified in this clause is, for a State for a fiscal year, that on average during the fiscal year, the State will enroll under this title or title XIX at least 90 percent of the individuals residing in the State who— (I)are children under 19 years of age (or are pregnant women) and are eligible for medical assistance under title XIX; or (II)are targeted low-income children whose family income does not exceed such percent of the poverty line (in excess of 200 percent) as the State elects consistent with this paragraph and who are eligible for child health assistance under this title. (D)

Grandfather

Subparagraphs (A) and (B) shall not apply to the provision of child health assistance— (i)to a targeted low-income child who is enrolled for child health assistance under this title as of September 30, 2007; (ii)to a pregnant woman who is enrolled for assistance under this title as of September 30, 2007, through the completion of the post-partum period following completion of her pregnancy; and (iii)for items and services furnished before October 1, 2008, to an individual who is not a targeted low-income child and who is enrolled for assistance under this title as of September 30, 2007. (E)

Treatment of pregnant women

In this paragraph and sections 2102(a)(8) and 2104(a)(2), the term targeted low-income child includes an individual under age 19, including the period from conception to birth, who is eligible for child health assistance under this title by virtue of the definition of the term child under section 457.10 of title 42, Code of Federal Regulations.

(c)

Standardization of income determinations

(1)

In general

Section 2110(d) of such Act (42 U.S.C. 1397jj) is amended by adding at the end the following new subsection:

(d)

Standardization of income determinations

(1)

In general

In determining family income under this title (including in the case of a State child health plan that provides health benefits coverage in the manner described in section 2101(a)(2)), a State shall base such determination on gross income (including amounts that would be included in gross income if they were not exempt from income taxation) and may only take into consideration such income disregards as the Secretary shall develop and specify on a uniform national basis. (2)

Construction

Nothing in paragraph (1) shall be construed as preventing the Secretary from approving, under section 1115 as applied to this title under section 2107(e)(2)(A), a waiver that provides for the application of alternative income disregards on an experimental or demonstration basis.

(2)

Effective date

(A)Subject to subparagraph (B), the amendment made by paragraph (1) shall apply to determinations (and redeterminations) of income made on or after April 1, 2008. (B)In the case of a State child health plan under title XXI 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 requirement imposed by the amendment made by paragraph (1), the State child health plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement 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.

Application of citizenship documentation requirements; increased Federal matching rate for citizenship documentation enforcement under Medicaid and SCHIP

(a)

Application of requirements

(1)

In general

Section 2105(c) of the Social Security Act (42 U.S.C. 1397dd(c)), as amended by sections 2(b) and 3(c), is amended by adding at the end the following new paragraph:

(10)

Application of citizenship documentation requirements

(A)

In general

Subject to subparagraph (B), no payment may be made under this section to a State with respect to amounts expended for child health assistance for an individual who declares under section 1137(d)(1)(A) to be a citizen or national of the United States for purposes of establishing eligibility for benefits under this title, unless the requirement of section 1903(x) is met. (B)

Treatment of pregnant women

For purposes of applying subparagraph (A) in the case of a pregnant woman who qualifies for child health assistance by virtue of the application of section 457.10 of title 42, Code of Federal Regulations, the requirement of such section shall be deemed to be satisfied by the presentation of documentation of personal identity described in section 274A(b)(1)(D) of the Immigration and Nationality Act or any other documentation of personal identity of such other type as the Secretary finds, by regulation, provides a reliable means of identification.

(2)

Effective date

The amendment made by paragraph (1) shall apply to eligibility determinations and redeterminations made on or after April 1, 2008. (b)

Temporary increase in Federal matching rate for administrative costs under Medicaid and SCHIP

— (1)

Medicaid

(A)

In general

With respect to administrative costs incurred on or after July 1, 2006, and before October 1, 2008, in implementing the amendments made by section 6036 of the Deficit Reduction Act of 2005 (Public Law 109–171), 75 percent shall be substituted for 50 per centum in section 1903(a)(7) of the Social Security Act (42 U.S.C. 1396b(a)(7)). (B)

Retroactive adjustment

The Secretary of Health and Human Services shall take such steps as may be necessary to provide for the adjustment of payments under section 1903(a) of the Social Security Act (42 U.S.C. 1396b(a)) to take into account the application of subparagraph (A) for periods before the date of the enactment of this Act. (2)

SCHIP

With respect to administrative costs incurred on or after April 1, 2008, and before October 1, 2008 in implementing the amendment made by subsection (a)(1), the enhanced FMAP applied under section 2105(a)(1)(D)(iv) of the Social Security Act (42 U.S.C. 1397d(a)(1)(D)(iv)) shall not be less than 75 percent.

Limitations on eligibility based on substantial net assets

(a)

In general

Section 2110(b) of the Social Security Act (42 U.S.C. 1397jj(b)) is amended— (1)in paragraph (1), by striking paragraph (2) and inserting paragraphs (2) and (5); and (2)by adding at the end the following new paragraph:

(5)

Disqualification for individuals in families with substantial net assets

An individual in a family is not eligible for child health assistance under this title if the individual’s family has net assets (including the equity interest in any home) that exceeds $500,000 or unless there is provided a document (in such a form and manner as the Secretary shall specify) signed under penalty of perjury by an applicant for child health assistance on behalf of the individual that the net assets of the individual’s family (including the equity interest in the any home) does not exceed $500,000. The Secretary may increase the dollar amount specified in the previous sentence from year to year beginning with 2013 based on the percentage increase in the consumer price index for all urban consumers (all items; United States city average), rounded to the nearest $1,000.

(b)

Effective date

The amendments made by subsection (a) shall apply to eligibility determinations and redeterminations made on or after April 1, 2008.

Clarification of State authorities

Section 2102 of the Social Security Act (42 U.S.C. 1397bb) is amended by adding at the end the following new subsection:

(d)

Clarification of State authorities

Nothing in this title shall be construed as preventing a State, under its child health plan, from doing any of the following: (1)

Use of waiting periods to prevent crowd out

From using waiting periods and other tools to prevent crowding out private-sector insurance coverage. (2)

Use of private providers and plans

From cooperating or contracting with private sector providers and plans in order to provide care to targeted low-income children. (3)

Use of state funds for ineligible individuals

From providing medical benefits for individuals who are not targeted low-income children with State funds.

Easing administrative barriers to State cooperation with employer-sponsored insurance coverage

(a)

Requiring some coverage for employer-sponsored insurance

(1)

In general

Section 2102(a) of the Social Security Act (42 U.S.C. 1397b(a)), as amended by section 2(a), is amended— (A)in paragraph (7), by striking and at the end; (B)in paragraph (8), by striking the period at the end and inserting ; and; and (C)by adding at the end the following new paragraph:

(9)effective for plan years beginning on or after October 1, 2008, how the plan will provide for child health assistance with respect to targeted low-income children covered under a group health plan.

(2)

Effective date

The amendment made by paragraph (1) shall apply beginning with fiscal year 2009. (b)

Federal financial participation for employer-sponsored insurance

Section 2105 of such Act (42 U.S.C. 1397d) is amended— (1)in subsection (a)(1)(C), by inserting before the semicolon at the end the following: and, subject to paragraph (3)(C), in the form of payment of the premiums for coverage under a group health plan that includes coverage of targeted low-income children and benefits supplemental to such coverage; and (2)paragraph (3) of subsection (c) is amended to read as follows:

(3)

Purchase of employer-sponsored insurance

(A)

In general

Payment may be made to a State under subsection (a)(1)(C), subject to the provisions of this paragraph, for the purchase of family coverage under a group health plan that includes coverage of targeted low-income children unless such coverage would otherwise substitute for coverage that would be provided to such children but for the purchase of family coverage. (B)

Waiver of certain provisions

With respect to coverage described in subparagraph (A)— (i)notwithstanding section 2102, no minimum benefits requirement (other than those otherwise applicable with respect to services referred to in section 2102(a)(7)) under this title shall apply; and (ii)no limitation on beneficiary cost-sharing otherwise applicable under this title or title XIX shall apply. (C)

Required provision of supplemental benefits

If the coverage described in subparagraph (A) does not provide coverage for the services referred to in section 2102(a)(7), the State child health plan shall provide coverage of such services as supplemental benefits. (D)

Limitation on FFP

The amount of the payment under paragraph (1)(C) for coverage described in subparagraph (A) (and supplemental benefits under subparagraph (C) for individuals so covered) during a fiscal year may not exceed the product of— (i)the national per capita expenditure under this title (taking into account both Federal and State expenditures) for the previous fiscal year (as determined by the Secretary using the best available data); (ii)the enhanced FMAP for the State and fiscal year involved; and (iii)the number of targeted low-income children for whom such coverage is provided. (E)

Voluntary enrollment

A State child health plan— (i)may not require a targeted low-income child to enroll in coverage described in subparagraph (A) in order to obtain child health assistance under this title; (ii)before providing such child health assistance for such coverage of a child, shall make available (which may be through an Internet website or other means) to the parent or guardian of the child information on the coverage available under this title, including benefits and cost-sharing; and (iii)shall provide at least one opportunity per fiscal year for beneficiaries to switch coverage under this title from coverage described in subparagraph (A) to the coverage that is otherwise made available under this title. (F)

Information on coverage options

A State child health plan shall— (i)describe how the State will notify potential beneficiaries of coverage described in subparagraph (A); (ii)provide such notification in writing at least during the initial application for enrollment under this title and during redeterminations of eligibility if the individual was enrolled before October 1, 2008; and (iii)post a description of these coverage options on any official website that may be established by the State in connection with the plan. (G)

Semiannual verification of coverage

If coverage described in subparagraph (A) is provided under a group health plan with respect to a targeted low-income child, the State child health plan shall provide for the collection, at least once every six months, of proof from the plan that the child is enrolled in such coverage. (H)

Rule of construction

Nothing in this section is to be construed to prohibit a State from— (i)offering wrap around benefits in order for a group health plan to meet any State-established minimum benefit requirements; (ii)establishing a cost-effectiveness test to qualify for coverage under such a plan; (iii)establishing limits on beneficiary cost-sharing under such a plan; (iv)paying all or part of a beneficiary’s cost-sharing requirements under such a plan; (v)paying less than the full cost of the employee’s share of the premium under such a plan, including prorating the cost of the premium to pay for only what the State determines is the portion of the premium that covers targeted low-income children; (vi)using State funds to pay for benefits above the Federal upper limit established under subparagraph (C); (vii)allowing beneficiaries enrolled in group health plans from changing plans to another coverage option available under this title at any time; or (viii)providing any guidance or information it deems appropriate in order to help beneficiaries make an informed decision regarding the option to enroll in coverage described in subparagraph (A). (I)

Group health plan defined

In this paragraph, the term group health plan has the meaning given such term in section 2791(a)(1) of the Public Health Service Act (42 U.S.C. 300gg–91(a)(1)).

Improving beneficiary choice in SCHIP

(a)

Requiring offering of alternative coverage options

Section 2102 of the Social Security Act (42 U.S.C. 1397b), as amended by sections 2(a) and 6(a), is amended— (1)in subsection (a)— (A)in paragraph (8), by striking and at the end; (B)in paragraph (9), by striking the period at the end and inserting ; and; and (C)by adding at the end the following new paragraph:

(10)effective for plan years beginning on or after October 1, 2008, how the plan will provide for child health assistance with respect to targeted low-income children through alternative coverage options in accordance with subsection (d).

; and

(2)by adding at the end the following new subsection:

(d)

Alternative coverage options

(1)

In general

Effective October 1, 2008, a State child health plan shall provide for the offering of any qualified alternative coverage that a qualified entity seeks to offer to targeted low-income children through the plan in the State. (2)

Application of uniform financial limitation for all alternative coverage options

With respect to all qualified alternative coverage offered in a State, the State child health plan shall establish a uniform dollar limitation on the per capita monthly amount that will be paid by the State to the qualified entity with respect to such coverage provided to a targeted low-income child. Such limitation may not be less than 90 percent of the per capita monthly payment made for coverage offered under the State child health plan that is not in the form of an alternative coverage option. Nothing in this paragraph shall be construed— (A)as requiring a State to provide for the full payment of premiums for qualified alternative coverage; (B)as preventing a State from charging additional premiums to cover the difference between the cost of qualified alternative coverage and the amount of such payment limitation; (C)as preventing a State from using its own funds to provide a dollar limitation that exceeds the Federal financial participation as limited under section 2105(c)(8). (3)

Qualified alternative coverage defined

In this section, the term qualified alternative coverage means health insurance coverage that— (A)meets the coverage requirements of section 2103 (other than cost-sharing requirements of such section); and (B)is offered by a qualified insurer, and not directly by the State. (4)

Qualified insurer defined

In this section, the term qualified insurer means, with respect to a State, an entity that is licensed to offer health insurance coverage in the State.

(b)

Federal financial participation for qualified alternative coverage

Section 2105 of such Act (42 U.S.C. 1397d) is amended— (1)in subsection (a)(1)(C), as amended by section 6(b), by inserting before the semicolon at the end the following: and, subject to paragraph (8)(C), in the form of payment of the premiums for coverage for qualified alternative coverage; and (2)by adding at the end of subsection (c) the following new paragraph:

(8)

Purchase of qualified alternative coverage

(A)

In general

Payment may be made to a State under subsection (a)(1)(C), subject to the provisions of this paragraph, for the purchase of qualified alternative coverage. (B)

Waiver of certain provisions

With respect to coverage described in subparagraph (A), no limitation on beneficiary cost-sharing otherwise applicable under this title or title XIX shall apply. (C)

Limitation on FFP

The amount of the payment under paragraph (1)(C) for coverage described in subparagraph (A) during a fiscal year in the aggregate for all such coverage in the State may not exceed the product of— (i)the national per capita expenditure under this title (taking into account both Federal and State expenditures) for the previous fiscal year (as determined by the Secretary using the best available data); (ii)the enhanced FMAP for the State and fiscal year involved; and (iii)the number of targeted low-income children for whom such coverage is provided. (D)

Voluntary enrollment

Information on coverage options

Rule of construction

Nothing in this section is to be construed to prohibit a State from— (i)establishing limits on beneficiary cost-sharing under such alternative coverage; (ii)paying all or part of a beneficiary’s cost-sharing requirements under such coverage; (iii)paying less than the full cost of a child’s share of the premium under such coverage, insofar as the premium for such coverage exceeds the limitation established by the State under subparagraph (C); (iv)using State funds to pay for benefits above the Federal upper limit established under subparagraph (C); or (v)providing any guidance or information it deems appropriate in order to help beneficiaries make an informed decision regarding the option to enroll in coverage described in subparagraph (A).

Allotment distribution formula

(a)

Allotments to 50 States and the District of Columbia

(1)

In general

Section 2104(b) of the Social Security Act (42 U.S.C. 1397dd(b)) is amended— (A)in paragraph (1), by striking the same proportion and all that follows and inserting the product of the number of SCHIP targeted children, as determined under paragraph (2) for the second preceding fiscal year, the State and Federal per capita SCHIP expenditures for the second preceding fiscal year, as determined under such paragraph, and the enhanced FMAP for the State for the second preceding fiscal year.; (B)by amending paragraph (2) to read as follows:

(2)

Number of SCHIP targeted children and pregnant women and national per capita SCHIP expenditures

(A)

In general

By not later than September 30 of each year (beginning with 2007), the Secretary (in consultation with the Director of the Bureau of the Census and using the best available data for the fiscal year ending in the previous year) shall determine and publish in the Federal Register— (i)the average number of low-income targeted children (described in subparagraph (B)) for any month during such preceding fiscal year; and (ii)the combined State and Federal per capita SCHIP expenditures (described in subparagraph (C)) for such preceding fiscal year. (B)

Low-income SCHIP targeted children

Low-income targeted children described in this subparagraph with respect to a subsection (b) State are children (including pregnant women described in section 2105(c)(8)(E)) residing in the State who are not covered under a group health plan or health insurance coverage (as defined for purposes of section 2110(b)(1)(C)) and whose family income— (i)exceeds the lesser of— (I)the Medicaid applicable income level (as defined in section 2110(b)(4)); or (II)150 percent of the poverty line; but (ii)does not 200 percent of the poverty line. (C)

State and Federal per capita SCHIP expenditures

The State and Federal per capita SCHIP expenditures for a fiscal year is equal to— (i)the aggregate Federal and State expenditures made that are attributable to allotments under this title for subsection (b) States for the fiscal year; divided by (ii)the average total number of targeted low-income children (including pregnant women described in section 2105(c)(8)(E)) for whom health assistance was made available from such allotments for such fiscal year.

; and

(C)by striking paragraphs (3) and (4) and inserting the following:

(3)

Subsection (b) State defined

In this subsection, the term subsection (b) State means one of the 50 States or the District of Columbia. (4)

Proportional reduction if total allotments exceed amount available

If the Secretary estimates that the total of the allotments under this subsection for a fiscal year (in combination with allotments made under subsection (c)) will exceed the aggregate amount available for allotments for such fiscal year under subsection (a), the Secretary shall reduce the amount of each allotment under this subsection in a pro-rata manner so that such total does not exceed the aggregate amount available for allotments.

(2)

Effective date

The amendment made by paragraph (1) shall apply to allotments for fiscal years beginning with fiscal year 2008. (b)

No redistribution of unused allotments

(1)

In general

Section 2104(f) of such Act (42 U.S.C. 1397dd) is amended to read as follows:

(f)

No redistribution of unused allotments

There shall be no redistribution of allotments from States that are not expended within the period of availability under subsection (e).

(2)

Effective date

The amendment made by paragraph (1) shall apply to allotments for fiscal years beginning with fiscal year 2005.

Five-year reauthorization

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 a semicolon; and (3)by adding at the end the following new paragraphs:

(11)for fiscal year 2008, $7,000,000,000; (12)for fiscal year 2009, $7,000,000,000; (13)for fiscal year 2010, $7,000,000,000; (14)for fiscal year 2011, $7,500,000,000; and (15)for fiscal year 2012, $8,000,000,000.

10.

Enhancing the programmatic focus on children and pregnant women

(a)

In general

Section 2107(f) of the Social Security Act (42 U.S.C. 1397gg(f)) is amended by striking childless. (b)

Effective date

The amendment made by subsection (a) shall take effect on the date of the enactment of this Act but shall not apply to projects, including extensions, amendments, or renewals to such projects, that are in effect or have been approved on the date of the enactment of this Act.