[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2193 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2193

   To provide for a 5-year SCHIP reauthorization for coverage of low-
 income children, an expansion of child health care insurance coverage 
through tax fairness, and a health care Federalism initiative, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 18, 2007

 Mr. Martinez (for himself, Mr. Voinovich, Mr. DeMint, Mr. Graham, Mr. 
    Cornyn, Mr. Thune, Mr. Sessions, Mr. Inhofe, and Mr. Chambliss) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To provide for a 5-year SCHIP reauthorization for coverage of low-
 income children, an expansion of child health care insurance coverage 
through tax fairness, and a health care Federalism initiative, 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 ``More Children, 
More Choices Act of 2007''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                     TITLE I--SCHIP REAUTHORIZATION

Sec. 101. Requiring outreach and coverage before expansion of 
                            eligibility.
Sec. 102. Application of citizenship documentation requirements; 
                            increased Federal matching rate for 
                            citizenship documentation enforcement under 
                            Medicaid and SCHIP.
Sec. 103. Limitations on eligibility based on substantial net assets.
Sec. 104. Clarification of State authorities.
Sec. 105. Easing administrative barriers to State cooperation with 
                            employer-sponsored insurance coverage.
Sec. 106. Improving beneficiary choice in SCHIP.
Sec. 107. Allotment distribution formula.
Sec. 108. Five-year reauthorization.
Sec. 109. Enhancing the programmatic focus on children and pregnant 
                            women.
Sec. 110. Grants for outreach and enrollment.
     TITLE II--CHILD HEALTH INSURANCE COVERAGE THROUGH TAX FAIRNESS

Sec. 201. Expansion of child health care insurance coverage through tax 
                            fairness.
                TITLE III--STATE HEALTH REFORM PROJECTS

Sec. 301. State health reform projects.
                     TITLE IV--SENSE OF THE SENATE

Sec. 401. Sense of the Senate.

                     TITLE I--SCHIP REAUTHORIZATION

SEC. 101. 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.--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.''.
            (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.

SEC. 102. 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 section 101(b), is amended 
        by adding at the end the following new paragraph:
            ``(9) 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.

SEC. 103. 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.

SEC. 104. 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.''.

SEC. 105. 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 101(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)).''.

SEC. 106. 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 101(a), 104, and 105(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 
        (e).''; and
            (2) by adding at the end the following new subsection:
    ``(e) 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)(10).
            ``(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 105(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) in subsection (c), as amended by sections 101(b) and 
        102(a)(1), by adding at the end the following new paragraph:
            ``(10) 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.--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.
                    ``(E) 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.
                    ``(F) 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).''.

SEC. 107. 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.

SEC. 108. FIVE-YEAR REAUTHORIZATION.

    (a) In General.--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.''.
    (b) Continuation of Additional Allotments to Territories.--Section 
2104(c)(4)(B) of the Social Security Act (42 U.S.C. 1397dd(c)(4)(B)) is 
amended by striking ``fiscal year 2007'' and inserting ``each of fiscal 
years 2007 through 2012''.
    (c) Application to Other SCHIP Funding for Fiscal Year 2008.--
Notwithstanding any other provision of law, if funds are appropriated 
under any law (other than this Act) to provide allotments to States 
under title XXI of the Social Security Act for all (or any portion) of 
fiscal year 2008--
            (1) any amounts that are so appropriated that are not so 
        allotted and obligated before the date of the enactment of this 
        Act are rescinded; and
            (2) any amount provided for such title XXI allotments to a 
        State under this Act (and the amendments made by this Act) for 
        such fiscal year shall be reduced by the amount of such 
        appropriations so allotted and obligated before such date.

SEC. 109. 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.

SEC. 110. GRANTS FOR OUTREACH AND ENROLLMENT.

    (a) Grants.--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. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT.

    ``(a) Outreach and Enrollment Grants; National Campaign.--
            ``(1) In general.--From the amounts appropriated for a 
        fiscal year under subsection (f), subject to paragraph (2), the 
        Secretary shall award grants to eligible entities to conduct 
        outreach and enrollment efforts that are designed to increase 
        the enrollment and participation of eligible children under 
        this title and title XIX.
            ``(2) 10 percent set aside for national enrollment 
        campaign.--An amount equal to 10 percent of such amounts for 
        the fiscal year shall be used by the Secretary for expenditures 
        during the fiscal year to carry out a national enrollment 
        campaign in accordance with subsection (g).
    ``(b) Award of Grants.--
            ``(1) Priority for awarding.--
                    ``(A) In general.--In awarding grants under 
                subsection (a), the Secretary shall give priority to 
                eligible entities that--
                            ``(i) propose to target geographic areas 
                        with high rates of--
                                    ``(I) eligible but unenrolled 
                                children, including such children who 
                                reside in rural areas; or
                                    ``(II) racial and ethnic minorities 
                                and health disparity populations, 
                                including those proposals that address 
                                cultural and linguistic barriers to 
                                enrollment; and
                            ``(ii) submit the most demonstrable 
                        evidence required under paragraphs (1) and (2) 
                        of subsection (c).
                    ``(B) 10 percent set aside for outreach to indian 
                children.--An amount equal to 10 percent of the funds 
                appropriated under subsection (f) for a fiscal year 
                shall be used by the Secretary to award grants to 
                Indian Health Service providers and urban Indian 
                organizations receiving funds under title V of the 
                Indian Health Care Improvement Act (25 U.S.C. 1651 et 
                seq.) for outreach to, and enrollment of, children who 
                are Indians.
            ``(2) 2-year availability.--A grant awarded under this 
        section for a fiscal year shall remain available for 
        expenditure through the end of the succeeding fiscal year.
    ``(c) Application.--An eligible entity that desires to receive a 
grant under subsection (a) shall submit an application to the Secretary 
in such form and manner, and containing such information, as the 
Secretary may decide. Such application shall include--
            ``(1) evidence demonstrating that the entity includes 
        members who have access to, and credibility with, ethnic or 
        low-income populations in the communities in which activities 
        funded under the grant are to be conducted;
            ``(2) evidence demonstrating that the entity has the 
        ability to address barriers to enrollment, such as lack of 
        awareness of eligibility, stigma concerns and punitive fears 
        associated with receipt of benefits, and other cultural 
        barriers to applying for and receiving child health assistance 
        or medical assistance;
            ``(3) specific quality or outcomes performance measures to 
        evaluate the effectiveness of activities funded by a grant 
        awarded under this section; and
            ``(4) an assurance that the eligible entity shall--
                    ``(A) conduct an assessment of the effectiveness of 
                such activities against the performance measures;
                    ``(B) cooperate with the collection and reporting 
                of enrollment data and other information in order for 
                the Secretary to conduct such assessments; and
                    ``(C) in the case of an eligible entity that is not 
                the State, provide the State with enrollment data and 
                other information as necessary for the State to make 
                necessary projections of eligible children and pregnant 
                women.
    ``(d) Supplement, Not Supplant.--Federal funds awarded under this 
section shall be used to supplement, not supplant, non-Federal funds 
that are otherwise available for activities funded under this section.
    ``(e) Definitions.--In this section:
            ``(1) Eligible entity.--The term `eligible entity' means 
        any of the following:
                    ``(A) A State with an approved child health plan 
                under this title.
                    ``(B) A local government.
                    ``(C) An Indian tribe or tribal consortium, a 
                tribal organization, an urban Indian organization 
                receiving funds under title V of the Indian Health Care 
                Improvement Act (25 U.S.C. 1651 et seq.), or an Indian 
                Health Service provider.
                    ``(D) A Federal health safety net organization.
                    ``(E) A State, national, local, or community-based 
                public or nonprofit private organization.
                    ``(F) A faith-based organization or consortia, to 
                the extent that a grant awarded to such an entity is 
                consistent with the requirements of section 1955 of the 
                Public Health Service Act (42 U.S.C. 300x-65) relating 
                to a grant award to non-governmental entities.
                    ``(G) An elementary or secondary school.
                    ``(H) A national, local, or community-based public 
                or nonprofit private organization, including 
                organizations that use community health workers or 
                community-based doula programs.
            ``(2) Federal health safety net organization.--The term 
        `Federal health safety net organization' means--
                    ``(A) a Federally-qualified health center (as 
                defined in section 1905(l)(2)(B));
                    ``(B) a hospital defined as a disproportionate 
                share hospital for purposes of section 1923;
                    ``(C) a covered entity described in section 
                340B(a)(4) of the Public Health Service Act (42 U.S.C. 
                256b(a)(4)); and
                    ``(D) any other entity or consortium that serves 
                children under a federally-funded program, including 
                the special supplemental nutrition program for women, 
                infants, and children (WIC) established under section 
                17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786), 
                the head start and early head start programs under the 
                Head Start Act (42 U.S.C. 9801 et seq.), the school 
                lunch program established under the Richard B. Russell 
                National School Lunch Act, and an elementary or 
                secondary school.
            ``(3) Indians; indian tribe; tribal organization; urban 
        indian organization.--The terms `Indian', `Indian tribe', 
        `tribal organization', and `urban Indian organization' have the 
        meanings given such terms in section 4 of the Indian Health 
        Care Improvement Act (25 U.S.C. 1603).
            ``(4) Community health worker.--The term `community health 
        worker' means an individual who promotes health or nutrition 
        within the community in which the individual resides--
                    ``(A) by serving as a liaison between communities 
                and health care agencies;
                    ``(B) by providing guidance and social assistance 
                to community residents;
                    ``(C) by enhancing community residents' ability to 
                effectively communicate with health care providers;
                    ``(D) by providing culturally and linguistically 
                appropriate health or nutrition education;
                    ``(E) by advocating for individual and community 
                health or nutrition needs; and
                    ``(F) by providing referral and followup services.
    ``(f) Appropriation.--
            ``(1) In general.--There is appropriated, out of any money 
        in the Treasury not otherwise appropriated, for the purpose of 
        awarding grants under this section $100,000,000 for each of 
        fiscal years 2008 through 2012.
            ``(2) Grants in addition to other amounts paid.--Amounts 
        appropriated and paid under the authority of this section shall 
        be in addition to amounts appropriated under section 2104 and 
        paid to States in accordance with section 2105, including with 
        respect to expenditures for outreach activities in accordance 
        with subsections (a)(1)(D)(iii) and (c)(2)(C) of that section.
    ``(g) National Enrollment Campaign.--From the amounts made 
available under subsection (a)(2) for a fiscal year, the Secretary 
shall develop and implement a national enrollment campaign to improve 
the enrollment of underserved child populations in the programs 
established under this title and title XIX. Such campaign may include--
            ``(1) the establishment of partnerships with the Secretary 
        of Education and the Secretary of Agriculture to develop 
        national campaigns to link the eligibility and enrollment 
        systems for the assistance programs each Secretary administers 
        that often serve the same children;
            ``(2) the integration of information about the programs 
        established under this title and title XIX in public health 
        awareness campaigns administered by the Secretary;
            ``(3) increased financial and technical support for 
        enrollment hotlines maintained by the Secretary to ensure that 
        all States participate in such hotlines;
            ``(4) the establishment of joint public awareness outreach 
        initiatives with the Secretary of Education and the Secretary 
        of Labor regarding the importance of health insurance to 
        building strong communities and the economy;
            ``(5) the development of special outreach materials for 
        Native Americans or for individuals with limited English 
        proficiency; and
            ``(6) such other outreach initiatives as the Secretary 
        determines would increase public awareness of the programs 
        under this title and title XIX.''.
    (b) Nonapplication of Administrative Expenditures Cap.--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 to expenditures for outreach 
                and enrollment.--The limitation under subparagraph (A) 
                shall not apply with respect to expenditures for 
                outreach activities under section 2102(c)(1), or for 
                enrollment activities, for children eligible for child 
                health assistance under the State child health plan or 
                medical assistance under the State plan under title 
                XIX.''.

     TITLE II--CHILD HEALTH INSURANCE COVERAGE THROUGH TAX FAIRNESS

SEC. 201. EXPANSION OF CHILD HEALTH CARE INSURANCE COVERAGE THROUGH TAX 
              FAIRNESS.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 36 as section 37 and by inserting 
after section 35 the following new section:

``SEC. 36. CHILD HEALTH INSURANCE COSTS.

    ``(a) In General.--In the case of an eligible taxpayer, there shall 
be allowed as a credit against the tax imposed by this subtitle an 
amount equal to the amount paid by the taxpayer during the taxable year 
for qualified health insurance for any dependent child of such 
taxpayer.
    ``(b) Limitations.--
            ``(1) In general.--The amount allowed as a credit under 
        subsection (a) to an eligible taxpayer for the taxable year 
        shall not exceed the sum of the monthly limitations for 
        coverage months during such taxable year for the individual 
        referred to in subsection (a) for whom such taxpayer paid 
        during the taxable year any amount for coverage under qualified 
        health insurance.
            ``(2) Monthly limitation.--The monthly limitation for an 
        individual for each coverage month of such individual during 
        the taxable year is the amount equal to \1/12\th of $1,400.
            ``(3) Coverage month.--For purposes of this subsection--
                    ``(A) In general.--The term `coverage month' means, 
                with respect to an individual, any month if--
                            ``(i) as of the first day of such month 
                        such individual is covered by qualified health 
                        insurance, and
                            ``(ii) the premium for coverage under such 
                        insurance for such month is paid by an eligible 
                        taxpayer.
                    ``(B) Medicare and medicaid.--Such term shall not 
                include any month with respect to an individual if, as 
                of the first day of such month, such individual--
                            ``(i) is entitled to any benefits under 
                        title XVIII of the Social Security Act, or
                            ``(ii) is a participant in the program 
                        under title XIX or XXI of such Act.
                    ``(C) Certain other coverage.--Such term shall not 
                include any month during a taxable year with respect to 
                an individual if, at any time during such year, any 
                benefit is provided to such individual under chapter 89 
                of title 5, United States Code.
                    ``(D) Insufficient presence in united states.--Such 
                term shall not include any month during a taxable year 
                with respect to an individual if such individual is 
                present in the United States on fewer than 183 days 
                during such year (determined in accordance with section 
                7701(b)(7)).
            ``(4) Indexing.--For each taxable year beginning after 
        December 31, 2008, the dollar amount in paragraph (2) (as 
        adjusted for the preceding taxable year by reason of this 
        paragraph) shall be increased or decreased by the percentage 
        change in the average cost of private health insurance for 
        family coverage for such taxable year as compared to such 
        preceding taxable year as computed by the Office of the Actuary 
        of the Centers for Medicare and Medicaid Services, rounded to 
        the nearest whole dollar amount.
    ``(c) Qualified Health Insurance.--For purposes of this section--
            ``(1) In general.--The term `qualified health insurance' 
        means insurance which constitutes medical care as defined in 
        section 213(d) without regard to--
                    ``(A) paragraph (1)(C) thereof, and
                    ``(B) so much of paragraph (1)(D) thereof as 
                relates to qualified long-term care insurance 
                contracts.
            ``(2) Exclusion of certain other contracts.--Such term 
        shall not include insurance if a substantial portion of its 
        benefits are excepted benefits (as defined in section 9832(c)).
    ``(d) Eligible Taxpayer; Dependent; Child.--For purposes of this 
section--
            ``(1) Eligible taxpayer.--The term `eligible taxpayer' 
        means any taxpayer whose income exceeds 200 percent but not 300 
        percent of the poverty level applicable to a family of the size 
        involved, as determined in accordance with criteria established 
        by the Director of the Office of Management and Budget.
            ``(2) Dependent.--The term `dependent' has the meaning 
        given such term by section 152. An individual to whom section 
        152(e) applies shall be treated as a dependent of the custodial 
        parent for a coverage month unless the custodial and 
        noncustodial parent provide otherwise.
            ``(3) Child.--The term `child' means a qualifying child (as 
        defined in section 152(c).
    ``(e) Special Rules.--
            ``(1) Coordination with medical deduction, etc.--Any amount 
        paid by an eligible taxpayer for insurance to which subsection 
        (a) applies shall not be taken into account in computing the 
        amount allowable to such taxpayer as a credit under section 35, 
        as a deduction under section 213(a) or 162(l), or as an 
        exclusion from gross income under section 106 or 125.
            ``(2) Denial of credit to dependents.--No credit shall be 
        allowed under this section to any individual with respect to 
        whom a deduction under section 151 is allowable to another 
        taxpayer for a taxable year beginning in the calendar year in 
        which such individual's taxable year begins.
            ``(3) Married couples must file joint return.--
                    ``(A) In general.--If an eligible taxpayer is 
                married at the close of the taxable year, the credit 
                shall be allowed under subsection (a) only if the 
                taxpayer and his spouse file a joint return for the 
                taxable year.
                    ``(B) Marital status; certain married individuals 
                living apart.--Rules similar to the rules of paragraphs 
                (3) and (4) of section 21(e) shall apply for purposes 
                of this paragraph.
            ``(4) Verification of coverage, etc.--No credit shall be 
        allowed under this section with respect to any individual 
        unless such individual's coverage (and such related information 
        as the Secretary may require) is verified in such manner as the 
        Secretary may prescribe.
            ``(5) Insurance which covers other individuals; treatment 
        of payments.--Rules similar to the rules of paragraphs (7) and 
        (8) of section 35(g) shall apply for purposes of this section.
            ``(6) Election not to claim credit.--This section shall not 
        apply to an eligible taxpayer for any taxable year if such 
        taxpayer elects to have this section not apply for such taxable 
        year.
    ``(f) Coordination With Advance Payments.--With respect to any 
taxable year, the amount which would (but for this subsection) be 
allowed as a credit to an eligible taxpayer under subsection (a) shall 
be reduced (but not below zero) by the aggregate amount paid on behalf 
of such taxpayer under section 7527A for months beginning in such 
taxable year.''.
    (b) Information Reporting.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 of the Internal Revenue Code of 1986 (relating to 
        information concerning transactions with other persons) is 
        amended by inserting after section 6050V the following new 
        section:

``SEC. 6050W. RETURNS RELATING TO PAYMENTS FOR QUALIFIED HEALTH 
              INSURANCE.

    ``(a) In General.--Any person who, in connection with a trade or 
business conducted by such person, receives payments during any 
calendar year from any individual for coverage of such individual or 
any other individual under qualified health insurance (as defined in 
section 36(c)), shall make the return described in subsection (b) (at 
such time as the Secretary may by regulations prescribe) with respect 
to each individual from whom such payments were received.
    ``(b) Form and Manner of Returns.--A return is described in this 
subsection if such return--
            ``(1) is in such form as the Secretary may prescribe, and
            ``(2) contains--
                    ``(A) the name, address, and TIN of the individual 
                from whom payments described in subsection (a) were 
                received,
                    ``(B) the name, address, and TIN of each individual 
                who was provided by such person with coverage under 
                qualified health insurance (as so defined) by reason of 
                such payments and the period of such coverage, and
                    ``(C) such other information as the Secretary may 
                reasonably prescribe.
    ``(c) Statements To Be Furnished to Individuals With Respect to 
Whom Information Is Required.--Every person required to make a return 
under subsection (a) shall furnish to each individual whose name is 
required under subsection (b)(2)(A) to be set forth in such return a 
written statement showing--
            ``(1) the name and address of the person required to make 
        such return and the phone number of the information contact for 
        such person,
            ``(2) the aggregate amount of payments described in 
        subsection (a) received by the person required to make such 
        return from the individual to whom the statement is required to 
        be furnished, and
            ``(3) the information required under subsection (b)(2)(B) 
        with respect to such payments.
The written statement required under the preceding sentence shall be 
furnished on or before January 31 of the year following the calendar 
year for which the return under subsection (a) is required to be made.
    ``(d) Returns Which Would Be Required To Be Made by 2 or More 
Persons.--Except to the extent provided in regulations prescribed by 
the Secretary, in the case of any amount received by any person on 
behalf of another person, only the person first receiving such amount 
shall be required to make the return under subsection (a).''.
            (2) Assessable penalties.--
                    (A) Subparagraph (B) of section 6724(d)(1) of such 
                Code (relating to definitions) is amended by 
                redesignating clauses (xv) through (xx) as clauses 
                (xvi) through (xxi), respectively, and by inserting 
                after clause (xi) the following new clause:
                            ``(xv) section 6050W (relating to returns 
                        relating to payments for qualified health 
                        insurance),''.
                    (B) Paragraph (2) of section 6724(d) of such Code 
                is amended by striking the period at the end of 
                subparagraph (CC) and inserting ``, or'' and by adding 
                at the end the following new subparagraph:
                    ``(DD) section 6050W(c) (relating to returns 
                relating to payments for qualified health 
                insurance).''.
            (3) Clerical amendment.--The table of sections for subpart 
        B of part III of subchapter A of chapter 61 of such Code is 
        amended by inserting after the item relating to section 6050V 
        the following new item:

``Sec. 6050W. Returns relating to payments for qualified health 
                            insurance.''.
    (c) Advance Payment of Credit for Purchasers of Qualified Health 
Insurance.--
            (1) In general.--Chapter 77 of the Internal Revenue Code of 
        1986 (relating to miscellaneous provisions) is amended by 
        adding at the end the following new section:

``SEC. 7529. ADVANCE PAYMENT OF HEALTH INSURANCE CREDIT FOR PURCHASERS 
              OF QUALIFIED HEALTH INSURANCE.

    ``(a) General Rule.--In the case of an eligible individual, the 
Secretary shall make payments to the provider of such individual's 
qualified health insurance equal to such individual's qualified health 
insurance credit advance amount with respect to such provider.
    ``(b) Eligible Individual.--For purposes of this section, the term 
`eligible individual' means any individual--
            ``(1) who purchases qualified health insurance (as defined 
        in section 36(c)), and
            ``(2) for whom a qualified health insurance credit 
        eligibility certificate is in effect.
    ``(c) Qualified Health Insurance Credit Eligibility Certificate.--
For purposes of this section, a qualified health insurance credit 
eligibility certificate is a statement furnished by an individual to 
the Secretary which--
            ``(1) certifies that the individual will be eligible to 
        receive the credit provided by section 36 for the taxable year,
            ``(2) estimates the amount of such credit for such taxable 
        year, and
            ``(3) provides such other information as the Secretary may 
        require for purposes of this section.
    ``(d) Qualified Health Insurance Credit Advance Amount.--For 
purposes of this section, the term `qualified health insurance credit 
advance amount' means, with respect to any provider of qualified health 
insurance, the Secretary's estimate of the amount of credit allowable 
under section 36 to the individual for the taxable year which is 
attributable to the insurance provided to the individual by such 
provider.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the purposes of this section.''.
            (2) Clerical amendment.--The table of sections for chapter 
        77 of such Code is amended by adding at the end the following 
        new item:

``Sec. 7529. Advance payment of health insurance credit for purchasers 
                            of qualified health insurance.''.
    (d) Conforming Amendments.--
            (1) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting before the period ``, or 
        from section 36 of such Code''.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by striking the last item and inserting the 
        following new items:

``Sec. 36. Health insurance costs.
``Sec. 37. Overpayments of tax.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

                TITLE III--STATE HEALTH REFORM PROJECTS

SEC. 301. STATE HEALTH REFORM PROJECTS.

    (a) Purpose; Establishment of State Health Care Expansion and 
Improvement Program.--The purposes of the programs approved under this 
section shall include, but not be limited to--
            (1) achieving the goals of increased health coverage and 
        access;
            (2) ensuring that patients receive high-quality, 
        appropriate health care;
            (3) improving the efficiency of health care spending; and
            (4) testing alternative reforms, such as building on the 
        public or private health systems, or creating new systems, to 
        achieve the objectives of this Act.
    (b) Applications by States, Local Governments, and Tribes.--
            (1) Entities that may apply.--
                    (A) In general.--A State, in consultation with 
                local governments, Indian tribes, and Indian 
                organizations involved in the provision of health care, 
                may apply for a State health care expansion and 
                improvement program for the entire State (or for 
                regions of the State) under paragraph (2).
                    (B) Regional groups.--A regional entity consisting 
                of more than one State may apply for a multi-State 
                health care expansion and improvement program for the 
                entire region involved under paragraph (2).
                    (C) Definition.--In this Act, the term ``State'' 
                means the 50 States, the District of Columbia, and the 
                Commonwealth of Puerto Rico. Such term shall include a 
                regional entity described in subparagraph (B).
            (2) Submission of application.--In accordance with this 
        section, each State desiring to implement a State health care 
        expansion and improvement program may submit an application to 
        the State Health Innovation Commission under subsection (c) 
        (referred to in this section as the ``Commission'') for 
        approval.
            (3) Local government applications.--
                    (A) In general.--Where a State declines to submit 
                an application under this section, a unit of local 
                government of such State, or a consortium of such units 
                of local governments, may submit an application 
                directly to the Commission for programs or projects 
                under this subsection. Such an application shall be 
                subject to the requirements of this section.
                    (B) Other applications.--Subject to such additional 
                guidelines as the Secretary may prescribe, a unit of 
                local government, Indian tribe, or Indian health 
                organization may submit an application under this 
                section, whether or not the State submits such an 
                application, if such unit of local government can 
                demonstrate unique demographic needs or a significant 
                population size that warrants a substate program under 
                this subsection.
    (c) State Health Innovation Commission.--
            (1) In general.--Within 90 days after the date of the 
        enactment of this Act, the Secretary shall establish a State 
        Health Innovation Commission that shall--
                    (A) be comprised of--
                            (i) the Secretary;
                            (ii) four State governors to be appointed 
                        by the National Governors Association on a 
                        bipartisan basis;
                            (iii) two members of a State legislature to 
                        be appointed by the National Conference of 
                        State Legislators on a bipartisan basis;
                            (iv) two county officials to be appointed 
                        by the National Association of Counties on a 
                        bipartisan basis;
                            (v) two mayors to be appointed by the 
                        United States Conference of Mayors and the 
                        National League of Cities on a joint and 
                        bipartisan basis;
                            (vi) two individuals to be appointed by the 
                        Speaker of the House of Representatives;
                            (vii) two individuals to be appointed by 
                        the minority leader of the House of 
                        Representatives;
                            (viii) two individuals to be appointed by 
                        the majority leader of the Senate;
                            (ix) two individuals to be appointed by the 
                        minority leader of the Senate; and
                            (x) two individuals who are members of 
                        federally-recognized Indian tribes to be 
                        appointed on a bipartisan basis by the National 
                        Congress of American Indians;
                    (B) upon approval of \2/3\ of the members of the 
                Commission, provide the States with a variety of reform 
                options for their applications, such as tax credit 
                approaches, expansions of public programs such as 
                medicaid and the State Children's Health Insurance 
                Program, the creation of purchasing pooling 
                arrangements similar to the Federal Employees Health 
                Benefits Program, individual market purchasing options, 
                single risk pool or single payer systems, health 
                savings accounts, a combination of the options 
                described in this clause, or other alternatives 
                determined appropriate by the Commission, including 
                options suggested by States, Indian tribes, or the 
                public;
                    (C) establish, in collaboration with a qualified 
                and independent organization such as the Institute of 
                Medicine, minimum performance measures and goals with 
                respect to coverage, quality, and cost of State 
                programs, as described under subsection (d)(1);
                    (D) conduct a thorough review of the grant 
                application from a State and carry on a dialogue with 
                all State applicants concerning possible modifications 
                and adjustments;
                    (E) submit the recommendations and legislative 
                proposal described in subsection (d)(4)(B);
                    (F) be responsible for monitoring the status and 
                progress achieved under program or projects granted 
                under this section;
                    (G) report to the public concerning progress made 
                by States with respect to the performance measures and 
                goals established under this Act, the periodic progress 
                of the State relative to its State performance measures 
                and goals, and the State program application 
                procedures, by region and State jurisdiction;
                    (H) promote information exchange between States and 
                the Federal Government; and
                    (I) be responsible for making recommendations to 
                the Secretary and the Congress, using equivalency or 
                minimum standards, for minimizing the negative effect 
                of State program on national employer groups, provider 
                organizations, and insurers because of differing State 
                requirements under the programs.
            (2) Period of appointment; representation requirements; 
        vacancies.--Members shall be appointed for a term of 5 years. 
        In appointing such members under paragraph (1)(A), the 
        designated appointing individuals shall ensure the 
        representation of urban and rural areas and an appropriate 
        geographic distribution of such members. Any vacancy in the 
        Commission shall not affect its powers, but shall be filled in 
        the same manner as the original appointment.
            (3) Chairperson, meetings.--
                    (A) Chairperson.--The Commission shall select a 
                Chairperson from among its members.
                    (B) Quorum.--A majority of the members of the 
                Commission shall constitute a quorum, but a lesser 
                number of members may hold hearings.
                    (C) Meetings.--Not later than 30 days after the 
                date on which all members of the Commission have been 
                appointed, the Commission shall hold its first meeting. 
                The Commission shall meet at the call of the 
                Chairperson.
            (4) Powers of the commission.--
                    (A) Negotiations with states.--The Commission may 
                conduct detailed discussions and negotiations with 
                States submitting applications under this section, 
                either individually or in groups, to facilitate a final 
                set of recommendations for purposes of subsection 
                (d)(4)(B). Such negotiations shall include 
                consultations with Indian tribes, and be conducted in a 
                public forum.
                    (B) Hearings.--The Commission may hold such 
                hearings, sit and act at such times and places, take 
                such testimony, and receive such evidence as the 
                Commission considers advisable to carry out the 
                purposes of this subsection.
                    (C) Meetings.--In addition to other meetings the 
                Commission may hold, the Commission shall hold an 
                annual meeting with the participating States under this 
                section for the purpose of having States report 
                progress toward the purposes in subsection (a)(1) and 
                for an exchange of information.
                    (D) Information.--The Commission may secure 
                directly from any Federal department or agency such 
                information as the Commission considers necessary to 
                carry out the provisions of this subsection. Upon 
                request of the Chairperson of the Commission, the head 
                of such department or agency shall furnish such 
                information to the Commission if the head of the 
                department or agency involved determines it 
                appropriate.
                    (E) Postal services.--The Commission may use the 
                United States mails in the same manner and under the 
                same conditions as other departments and agencies of 
                the Federal Government.
            (5) Personnel matters.--
                    (A) Compensation.--Each member of the Commission 
                who is not an officer or employee of the Federal 
                Government or of a State or local government shall be 
                compensated at a rate equal to the daily equivalent of 
                the annual rate of basic pay prescribed for level IV of 
                the Executive Schedule under section 5315 of title 5, 
                United States Code, for each day (including travel 
                time) during which such member is engaged in the 
                performance of the duties of the Commission. All 
                members of the Commission who are officers or employees 
                of the United States shall serve without compensation 
                in addition to that received for their services as 
                officers or employees of the United States.
                    (B) Travel expenses.--The members of the Commission 
                shall be allowed travel expenses, including per diem in 
                lieu of subsistence, at rates authorized for employees 
                of agencies under subchapter I of chapter 57 of title 
                5, United States Code, while away from their homes or 
                regular places of business in the performance of 
                services for the Commission.
                    (C) Staff.--The Chairperson of the Commission may, 
                without regard to the civil service laws and 
                regulations, appoint and terminate an executive 
                director and such other additional personnel as may be 
                necessary to enable the Commission to perform its 
                duties. The employment of an executive director shall 
                be subject to confirmation by the Commission.
                    (D) Detail of government employees.--Any Federal 
                Government employee may be detailed to the Commission 
                without reimbursement, and such detail shall be without 
                interruption or loss of civil service status or 
                privilege.
                    (E) Temporary and intermittent services.--The 
                Chairperson of the Commission may procure temporary and 
                intermittent services under section 3109(b) of title 5, 
                United States Code, at rates for individuals which do 
                not exceed the daily equivalent of the annual rate of 
                basic pay prescribed for level V of the Executive 
                Schedule under section 5316 of such title.
            (6) Funding.--For the purpose of carrying out this 
        subsection, there are authorized to be appropriated $3,000,000 
        for fiscal year 2007 and each fiscal year thereafter.
    (d) Requirements for Programs.--
            (1) State plan.--A State that seeks to receive a grant 
        under subsection (f) to operate a program under this section 
        shall prepare and submit to the Commission, as part of the 
        application under subsection (b), a State health care plan that 
        shall have as its goal improvements in coverage, quality and 
        costs. To achieve such goal, the State plan shall comply with 
        the following:
                    (A) Coverage.--With respect to coverage, the State 
                plan shall--
                            (i) provide and describe the manner in 
                        which the State will ensure that an increased 
                        number of individuals residing within the State 
                        will have expanded access to health care 
                        coverage with a specific 5-year target for 
                        reduction in the number of uninsured 
                        individuals through either private or public 
                        program expansion, or both, in accordance with 
                        the options established by the Commission;
                            (ii) describe the number and percentage of 
                        current uninsured individuals who will achieve 
                        coverage under the State health program;
                            (iii) describe the minimum benefits package 
                        that will be provided to all classes of 
                        beneficiaries under the State health program;
                            (iv) identify Federal, State, or local and 
                        private programs that currently provide health 
                        care services in the State and describe how 
                        such programs could be coordinated with the 
                        State health program, to the extent 
                        practicable; and
                            (v) provide for improvements in the 
                        availability of appropriate health care 
                        services that will increase access to care in 
                        urban, rural, and frontier areas of the State 
                        with medically underserved populations or where 
                        there is an inadequate supply of health care 
                        providers.
                    (B) Quality.--With respect to quality, the State 
                plan shall--
                            (i) provide a plan to improve health care 
                        quality in the State, including increasing 
                        effectiveness, efficiency, timeliness, patient 
                        focused, equity while reducing health 
                        disparities, and medical errors; and
                            (ii) contain appropriate results-based 
                        quality indicators established by the 
                        Commission that will be addressed by the State 
                        as well as State-specific quality indicators.
                    (C) Costs.--With respect to costs, the State plan 
                shall--
                            (i) provide that the State will develop and 
                        implement systems to improve the efficiency of 
                        health care, including a specific 5-year target 
                        for reducing administrative costs (including 
                        paperwork burdens);
                            (ii) describe the public and private sector 
                        financing to be provided for the State health 
                        program;
                            (iii) estimate the amount of Federal, 
                        State, and local expenditures, as well as, the 
                        costs to business and individuals under the 
                        State health program;
                            (iv) describe how the State plan will 
                        ensure the financial solvency of the State 
                        health program; and
                            (v) provide that the State will prepare and 
                        submit to the Secretary and the Commission such 
                        reports as the Secretary or Commission may 
                        require to carry out program evaluations.
                    (D) Health information technology.--With respect to 
                health information technology, the State plan shall 
                provide methodology for the appropriate use of health 
                information technology to improve infrastructure, such 
                as improving the availability of evidence-based medical 
                and outcomes data to providers and patients, as well as 
                other health information (such as electronic health 
                records, electronic billing, and electronic 
                prescribing).
            (2) Technical assistance.--The Secretary shall, if 
        requested, provide technical assistance to States to assist 
        such States in developing applications and plans under this 
        section, including technical assistance by private sector 
        entities if determined appropriate by the Commission.
            (3) Initial review.--With respect to a State application 
        for a grant under subsection (b), the Secretary and the 
        Commission shall complete an initial review of such State 
        application within 60 days of the receipt of such application, 
        analyze the scope of the proposal, and determine whether 
        additional information is needed from the State. The Commission 
        shall advise the State within such period of the need to submit 
        additional information.
            (4) Final determination.--
                    (A) In general.--Not later than 90 days after 
                completion of the initial review under paragraph (3), 
                the Commission shall determine whether to submit a 
                State proposal to Congress for approval.
                    (B) Voting.--
                            (i) In general.--The determination to 
                        submit a State proposal to Congress under 
                        subparagraph (A) shall be approved by \2/3\ of 
                        the members of the Commission who are eligible 
                        to participate in such determination subject to 
                        clause (ii).
                            (ii) Eligibility.--A member of the 
                        Commission shall not participate in a 
                        determination under subparagraph (A) if--
                                    (I) in the case of a member who is 
                                a Governor, such determination relates 
                                to the State of which the member is the 
                                Governor; or
                                    (II) in the case of member not 
                                described in subclause (I), such 
                                determination relates to the geographic 
                                area of a State of which such member 
                                serves as a State or local official.
                    (C) Submission.--Not later than 90 days prior to 
                October 1 of each fiscal year, the Commission shall 
                submit to Congress a list, in the form of a legislative 
                proposal, of the State applications that the Commission 
                recommends for approval under this section.
                    (D) Approval.--With respect to a fiscal year, a 
                State proposal that has been recommended under 
                subparagraph (B) shall be deemed to be approved, and 
                subject to the availability of appropriations, Federal 
                funds shall be provided to such program, unless a joint 
                resolution has been enacted disapproving such proposal 
                as provided for in subsection (e). Nothing in the 
                preceding sentence shall be construed to include the 
                approval of State proposals that involve waivers or 
                modifications in applicable Federal law.
            (5) Program or project period.--A State program or project 
        may be approved for a period of 5 years and may be extended for 
        subsequent 5-year periods upon approval by the Commission and 
        the Secretary, based upon achievement of targets, except that a 
        shorter period may be requested by a State and granted by the 
        Secretary.
    (e) Expedited Congressional Consideration.--
            (1) Introduction and committee consideration.--
                    (A) Introduction.--The legislative proposal 
                submitted pursuant to subsection (d)(4)(B) shall be in 
                the form of a joint resolution (in this subsection 
                referred to as the ``resolution''). Such resolution 
                shall be introduced in the House of Representatives by 
                the Speaker, and in the Senate, by the majority leader, 
                immediately upon receipt of the language and shall be 
                referred to the appropriate committee of Congress. If 
                the resolution is not introduced in accordance with the 
                preceding sentence, the resolution may be introduced in 
                either House of Congress by any member thereof.
                    (B) Committee consideration.--A resolution 
                introduced in the House of Representatives shall be 
                referred to the Committee on Ways and Means of the 
                House of Representatives. A resolution introduced in 
                the Senate shall be referred to the Committee on 
                Finance of the Senate. Not later than 15 calendar days 
                after the introduction of the resolution, the committee 
                of Congress to which the resolution was referred shall 
                report the resolution or a committee amendment thereto. 
                If the committee has not reported such resolution (or 
                an identical resolution) at the end of 15 calendar days 
                after its introduction or at the end of the first day 
                after there has been reported to the House involved a 
                resolution, whichever is earlier, such committee shall 
                be deemed to be discharged from further consideration 
                of such reform bill and such reform bill shall be 
                placed on the appropriate calendar of the House 
                involved.
            (2) Expedited procedure.--
                    (A) Consideration.--Not later than 5 days after the 
                date on which a committee has been discharged from 
                consideration of a resolution, the Speaker of the House 
                of Representatives, or the Speaker's designee, or the 
                majority leader of the Senate, or the leader's 
                designee, shall move to proceed to the consideration of 
                the committee amendment to the resolution, and if there 
                is no such amendment, to the resolution. It shall also 
                be in order for any member of the House of 
                Representatives or the Senate, respectively, to move to 
                proceed to the consideration of the resolution at any 
                time after the conclusion of such 5-day period. All 
                points of order against the resolution (and against 
                consideration of the resolution) are waived. A motion 
                to proceed to the consideration of the resolution is 
                highly privileged in the House of Representatives and 
                is privileged in the Senate and is not debatable. The 
                motion is not subject to amendment, to a motion to 
                postpone consideration of the resolution, or to a 
                motion to proceed to the consideration of other 
                business. A motion to reconsider the vote by which the 
                motion to proceed is agreed to or not agreed to shall 
                not be in order. If the motion to proceed is agreed to, 
                the House of Representatives or the Senate, as the case 
                may be, shall immediately proceed to consideration of 
                the resolution without intervening motion, order, or 
                other business, and the resolution shall remain the 
                unfinished business of the House of Representatives or 
                the Senate, as the case may be, until disposed of.
                    (B) Consideration by other house.--If, before the 
                passage by one House of the resolution that was 
                introduced in such House, such House receives from the 
                other House a resolution as passed by such other 
                House--
                            (i) the resolution of the other House shall 
                        not be referred to a committee and may only be 
                        considered for final passage in the House that 
                        receives it under clause (iii);
                            (ii) the procedure in the House in receipt 
                        of the resolution of the other House, with 
                        respect to the resolution that was introduced 
                        in the House in receipt of the resolution of 
                        the other House, shall be the same as if no 
                        resolution had been received from the other 
                        House; and
                            (iii) notwithstanding clause (ii), the vote 
                        on final passage shall be on the reform bill of 
                        the other House.
                Upon disposition of a resolution that is received by 
                one House from the other House, it shall no longer be 
                in order to consider the resolution bill that was 
                introduced in the receiving House.
                    (C) Consideration in conference.--Immediately upon 
                a final passage of the resolution that results in a 
                disagreement between the two Houses of Congress with 
                respect to the resolution, conferees shall be appointed 
                and a conference convened. Not later than 10 days after 
                the date on which conferees are appointed, the 
                conferees shall file a report with the House of 
                Representatives and the Senate resolving the 
                differences between the Houses on the resolution. 
                Notwithstanding any other rule of the House of 
                Representatives or the Senate, it shall be in order to 
                immediately consider a report of a committee of 
                conference on the resolution filed in accordance with 
                this subclause. Debate in the House of Representatives 
                and the Senate on the conference report shall be 
                limited to 10 hours, equally divided and controlled by 
                the Speaker of the House of Representatives and the 
                minority leader of the House of Representatives or 
                their designees and the majority and minority leaders 
                of the Senate or their designees. A vote on final 
                passage of the conference report shall occur 
                immediately at the conclusion or yielding back of all 
                time for debate on the conference report.
            (3) Rules of the senate and house of representatives.--This 
        subsection is enacted by Congress--
                    (A) as an exercise of the rulemaking power of the 
                Senate and House of Representatives, respectively, and 
                is deemed to be part of the rules of each House, 
                respectively, but applicable only with respect to the 
                procedure to be followed in that House in the case of a 
                resolution, and it supersedes other rules only to the 
                extent that it is inconsistent with such rules; and
                    (B) with full recognition of the constitutional 
                right of either House to change the rules (so far as 
                they relate to the procedure of that House) at any 
                time, in the same manner, and to the same extent as in 
                the case of any other rule of that House.
            (4) Limitation.--The amount of Federal funds provided with 
        respect to any State proposal that is deemed approved under 
        subsection (d)(3) shall not exceed the cost provided for such 
        proposals within the concurrent resolution on the budget as 
        enacted by Congress for the fiscal year involved.
    (f) Funding.--
            (1) In general.--The Secretary shall provide a grant to a 
        State that has an application approved under subsection (b) to 
        enable such State to carry out an innovative State health 
        program in the State.
            (2) Amount of grant.--The amount of a grant provided to a 
        State under paragraph (1) shall be determined based upon the 
        recommendations of the Commission, subject to the amount 
        appropriated under subsection (k).
            (3) Performance-based funding allocation and 
        prioritization.--In awarding grants under paragraph (1), the 
        Secretary shall--
                    (A) fund a diversity of approaches as provided for 
                by the Commission in subsection (c)(1)(B);
                    (B) give priority to those State programs that the 
                Commission determines have the greatest opportunity to 
                succeed in providing expanded health insurance coverage 
                and in providing children, youth, and other vulnerable 
                populations with improved access to health care items 
                and services; and
                    (C) link allocations to the State to the meeting of 
                the goals and performance measures relating to health 
                care coverage, quality, and health care costs 
                established under this Act through the State project 
                application process.
            (4) Maintenance of effort.--A State, in utilizing the 
        proceeds of a grant received under paragraph (1), shall 
        maintain the expenditures of the State for health care coverage 
        purposes for the support of direct health care delivery at a 
        level equal to not less than the level of such expenditures 
        maintained by the State for the fiscal year preceding the 
        fiscal year for which the grant is received.
            (5) Report.--At the end of the 5-year period beginning on 
        the date on which the Secretary awards the first grant under 
        paragraph (1), the State Health Innovation Advisory Commission 
        established under subsection (c) shall prepare and submit to 
        the appropriate committees of Congress, a report on the 
        progress made by States receiving grants under paragraph (1) in 
        meeting the goals of expanded coverage, improved quality, and 
        cost containment through performance measures established 
        during the 5-year period of the grant. Such report shall 
        contain the recommendation of the Commission concerning any 
        future action that Congress should take concerning health care 
        reform, including whether or not to extend the program 
        established under this subsection.
    (g) Monitoring and Evaluation.--
            (1) Annual reports and participation by states.--Each State 
        that has received a program approval shall--
                    (A) submit to the Commission an annual report based 
                on the period representing the respective State's 
                fiscal year, detailing compliance with the requirements 
                established by the Commission and the Secretary in the 
                approval and in this section; and
                    (B) participate in the annual meeting under 
                subsection (c)(4)(B).
            (2) Evaluations by commission.--The Commission, in 
        consultation with a qualified and independent organization such 
        as the Institute of Medicine, shall prepare and submit to the 
        Committee on Finance and the Committee on Health, Education, 
        Labor, and Pensions of the Senate and the Committee on Energy 
        and Commerce, the Committee on Education and Labor, and the 
        Committee on Ways and Means of the House of Representatives 
        annual reports that shall contain--
                    (A) a description of the effects of the reforms 
                undertaken in States receiving approvals under this 
                section;
                    (B) a description of the recommendations of the 
                Commission and actions taken based on these 
                recommendations;
                    (C) an evaluation of the effectiveness of such 
                reforms in--
                            (i) expanding health care coverage for 
                        State residents;
                            (ii) improving the quality of health care 
                        provided in the States; and
                            (iii) reducing or containing health care 
                        costs in the States;
                    (D) recommendations regarding the advisability of 
                increasing Federal financial assistance for State 
                ongoing or future health program initiatives, including 
                the amount and source of such assistance; and
                    (E) as required by the Commission or the Secretary 
                under subsection (f)(5), a periodic, independent 
                evaluation of the program.
    (h) Noncompliance.--
            (1) Corrective action plans.--If a State is not in 
        compliance with a requirement of this section, the Secretary 
        shall develop a corrective action plan for such State.
            (2) Termination.--For good cause and in consultation with 
        the Commission, the Secretary may revoke any program granted 
        under this section. Such decisions shall be subject to a 
        petition for reconsideration and appeal pursuant to regulations 
        established by the Secretary.
    (i) Relationship to Federal Programs.--
            (1) In general.--Nothing in this Act, or in section 1115 of 
        the Social Security Act (42 U.S.C. 1315) shall be construed as 
        authorizing the Secretary, the Commission, a State, or any 
        other person or entity to alter or affect in any way the 
        provisions of title XIX of such Act (42 U.S.C. 1396 et seq.) or 
        the regulations implementing such title.
            (2) Maintenance of effort.--No payment may be made under 
        this section if the State adopts criteria for benefits, income, 
        and resource standards and methodologies for purposes of 
        determining an individual's eligibility for medical assistance 
        under the State plan under title XIX that are more restrictive 
        than those applied as of the date of enactment of this Act.
    (j) Miscellaneous Provisions.--
            (1) Application of certain requirements.--
                    (A) Restriction on application of preexisting 
                condition exclusions.--
                            (i) In general.--Subject to subparagraph 
                        (B), a State shall not permit the imposition of 
                        any preexisting condition exclusion for covered 
                        benefits under a program or project under this 
                        section.
                            (ii) Group health plans and group health 
                        insurance coverage.--If the State program or 
                        project provides for benefits through payment 
                        for, or a contract with, a group health plan or 
                        group health insurance coverage, the program or 
                        project may permit the imposition of a 
                        preexisting condition exclusion but only 
                        insofar and to the extent that such exclusion 
                        is permitted under the applicable provisions of 
                        part 7 of subtitle B of title I of the Employee 
                        Retirement Income Security Act of 1974 and 
                        title XXVII of the Public Health Service Act.
                    (B) Compliance with other requirements.--Coverage 
                offered under the program or project shall comply with 
                the requirements of subpart 2 of part A of title XXVII 
                of the Public Health Service Act insofar as such 
                requirements apply with respect to a health insurance 
                issuer that offers group health insurance coverage.
            (2) Prevention of duplicative payments.--
                    (A) Other health plans.--No payment shall be made 
                to a State under this section for expenditures for 
                health assistance provided for an individual to the 
                extent that a private insurer (as defined by the 
                Secretary by regulation and including a group health 
                plan (as defined in section 607(1) of the Employee 
                Retirement Income Security Act of 1974), a service 
                benefit plan, and a health maintenance organization) 
                would have been obligated to provide such assistance 
                but for a provision of its insurance contract which has 
                the effect of limiting or excluding such obligation 
                because the individual is eligible for or is provided 
                health assistance under the plan.
                    (B) Other federal governmental programs.--Except as 
                provided in any other provision of law, no payment 
                shall be made to a State under this section for 
                expenditures for health assistance provided for an 
                individual to the extent that payment has been made or 
                can reasonably be expected to be made promptly (as 
                determined in accordance with regulations) under any 
                other federally operated or financed health care 
                insurance program, other than an insurance program 
                operated or financed by the Indian Health Service, as 
                identified by the Secretary. For purposes of this 
                paragraph, rules similar to the rules for overpayments 
                under section 1903(d)(2) of the Social Security Act 
                shall apply.
            (3) Application of certain general provisions.--The 
        following sections of the Social Security Act shall apply to 
        States under this section in the same manner as they apply to a 
        State under such title XIX:
                    (A) Title xix provisions.--
                            (i) Section 1902(a)(4)(C) (relating to 
                        conflict of interest standards).
                            (ii) Paragraphs (2), (16), and (17) of 
                        section 1903(i) (relating to limitations on 
                        payment).
                            (iii) Section 1903(w) (relating to 
                        limitations on provider taxes and donations).
                            (iv) Section 1920A (relating to presumptive 
                        eligibility for children).
                    (B) Title xi provisions.--
                            (i) Section 1116 (relating to 
                        administrative and judicial review), but only 
                        insofar as consistent with this title.
                            (ii) Section 1124 (relating to disclosure 
                        of ownership and related information).
                            (iii) Section 1126 (relating to disclosure 
                        of information about certain convicted 
                        individuals).
                            (iv) Section 1128A (relating to civil 
                        monetary penalties).
                            (v) Section 1128B(d) (relating to criminal 
                        penalties for certain additional charges).
                            (vi) Section 1132 (relating to periods 
                        within which claims must be filed).
            (4) Relation to other laws.--
                    (A) HIPAA.--Health benefits coverage provided under 
                a State program or project under this section shall be 
                treated as creditable coverage for purposes of part 7 
                of subtitle B of title I of the Employee Retirement 
                Income Security Act of 1974, title XXVII of the Public 
                Health Service Act, and subtitle K of the Internal 
                Revenue Code of 1986.
                    (B) ERISA.--Nothing in this section shall be 
                construed as affecting or modifying section 514 of the 
                Employee Retirement Income Security Act of 1974 (29 
                U.S.C. 1144) with respect to a group health plan (as 
                defined in section 2791(a)(1) of the Public Health 
                Service Act (42 U.S.C. 300gg-91(a)(1))).
    (k) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section, such sums as may be necessary 
in each fiscal year. Amounts appropriated for a fiscal year under this 
subsection and not expended may be used in subsequent fiscal years to 
carry out this section.

                     TITLE IV--SENSE OF THE SENATE

SEC. 401. SENSE OF THE SENATE.

    It is the sense of the Senate that any increases in Federal budget 
outlays resulting from this Act be fully offset by reductions in 
Federal budget outlays, and that any reductions in Federal revenues 
resulting from this Act be fully offset.
                                 <all>