[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2819 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 2819

    To preserve access to Medicaid and the State Children's Health 
 Insurance Program during an economic downturn, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 3, 2008

 Mr. Rockefeller (for himself, Ms. Snowe, and Mr. Kennedy) introduced 
the following bill; which was read twice and referred to the Committee 
                               on Finance

_______________________________________________________________________

                                 A BILL


 
    To preserve access to Medicaid and the State Children's Health 
 Insurance Program during an economic downturn, 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.

    This Act may be cited as the ``Economic Recovery in Health Care Act 
of 2008''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) State and local governments are an integral part of our 
        national economic engine. They provide health care and a wealth 
        of social services to millions of Americans, particularly when 
        the economy is weak.
            (2) During the last economic downturn, the number of 
        uninsured Americans would have been millions more if Medicaid 
        and the State Children's Health Insurance Program (CHIP) had 
        not responded to the twin challenges of an economic downturn 
        and a sharp drop-off in private health insurance coverage.
            (3) In the last year, our unemployment rate has increased 
        to 5.0 percent with nearly 900,000 more Americans without jobs. 
        Because the majority of Americans get their health insurance 
        through their jobs, the loss of a job often results in a 
        simultaneous loss of health insurance coverage.
            (4) Medicaid fills the gap for working families when they 
        lose access to private coverage. For every 1 percent increase 
        in the unemployment rate, Medicaid enrollment increases by 
        2,000,000 to 3,000,000 people.
            (5) States experience enormous budget pressures when the 
        economy slows. By law, 49 States are required to balance their 
        budgets and, in times of economic downturn, this task becomes 
        significantly more difficult.
            (6) According to the National Governors Association, 18 
        States already face budget shortfalls totaling $14,000,000,000 
        in 2008, and 21 States project shortfalls totaling more than 
        $32,000,000,000 in 2009. If the current downturn follows the 
        path of most recessions, between 35 and 40 States will face 
        severe budget shortfalls in 2009.
            (7) A critical factor in helping States sustain Medicaid 
        enrollment during the last economic downturn was the 
        $20,000,000,000 in State fiscal relief that Congress enacted in 
        2003.
            (8) Not only should Congress enact a similar State fiscal 
        relief provision in 2008, but Congress should also delay the 
        implementation of administrative regulations that would reduce 
        Federal Medicaid matching payments at a time when States need 
        greater Federal resources.
            (9) There is no question that health care is economic 
        stimulus.
            (10) Keeping Medicaid and CHIP whole shores up the safety 
        net for vulnerable working families. People who are able to get 
        the health services they need are more likely to be able to 
        continue working and contribute to the economy as it recovers.
            (11) Leading economists have found that targeted State aid 
        would generate increased economic activity of $1.36 for each 
        dollar of cost. The increase in Federal dollars to States 
        generates business activity, jobs, and wages that States would 
        not otherwise see.

SEC. 3. PRESERVING ACCESS TO MEDICAID AND CHIP DURING AN ECONOMIC 
              DOWNTURN.

    (a) Prohibition.--Effective on the date of enactment of this Act, 
notwithstanding any other provision of law, the Secretary of Health and 
Human Services shall not finalize, implement, enforce, or otherwise 
take any action to give effect to the following administrative actions 
(or to any administrative actions relating to the same subject matters 
that are similar to the following administrative actions or that 
reflect the same or similar policies set forth in the following 
administrative actions) prior to April 1, 2009:
            (1) The proposed and final rule entitled ``Medicaid 
        Program; Health-Care Related Taxes'', published, respectively, 
        on March 23, 2007, on pages 13726 through 13734 of volume 72, 
        Federal Register, and on February 22, 2008, on pages 9685 
        through 9699 of volume 73, Federal Register, with the exception 
        of the proposed amendments to sections 433.56(a)(8) and 
        433.68(f)(3)(i) of title 42, Code of Federal Relations.
            (2) The proposed rule entitled ``Medicaid Program; Graduate 
        Medical Education'', published on May 23, 2007, on pages 28930 
        through 28936 of volume 72, Federal Register.
            (3) The State Health Official Letter 07-001, dated August 
        17, 2007, issued by the Director of the Center for Medicaid and 
        State Operations in the Centers for Medicare & Medicaid 
        Services regarding certain requirements under the State 
        Children's Health Insurance Program (CHIP) relating to the 
        prevention of the substitution of health benefits coverage for 
        children (commonly referred to as ``crowd-out'') and the 
        enforcement of medical support orders. Any change made on or 
        after August 17, 2007, to a Medicaid or CHIP State plan or 
        waiver to implement, conform to, or otherwise adhere to the 
        requirements or policies in such letter shall not apply prior 
        to April 1, 2009.
            (4) The proposed rule entitled ``Medicaid Program; 
        Clarification of Outpatient Clinic and Hospital Facility 
        Services definition and Upper Payment Limit'', published on 
        September 28, 2007, on pages 55158 through 55166 of volume 72, 
        Federal Register.
            (5) The interim final rule entitled ``Medicaid Program; 
        Optional State Plan Case Management Services'', published on 
        December 4, 2007, on pages 68077 through 68093 of volume 72, 
        Federal Register.
            (6) The proposed rule entitled ``Revisions to Procedures 
        for the Departmental Appeals Board and Other Departmental 
        Hearings'', published on December 28, 2007, on pages 73708 
        through 73720 of volume 72, Federal Register.
    (b) Extension of Prior Moratoria.--
            (1) Moratorium relating to the cost limit for providers 
        operated by units of government and provisions to ensure the 
        integrity of federal-state financial partnership.--Section 
        7002(a)(1) of the U.S. Troop Readiness, Veterans' Care, Katrina 
        Recovery, and Iraq Accountability Appropriations Act of 2007 
        (Public Law 110-28) is amended by striking ``the date that is 1 
        year after the date of enactment of this Act'' and inserting 
        ``April 1, 2009''.
            (2) Moratoria relating to rehabilitation services, school-
        based administration and school-based transportation.--Section 
        206 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 
        (Public Law 110-173) is amended by striking ``June 30, 2008'' 
        and inserting ``April 1, 2009''.

SEC. 4. TEMPORARY, TARGETED STATE FISCAL RELIEF.

    (a) Definitions.--In this section:
            (1) Round one qualifying state.--
                    (A) In general.--Subject to subparagraph (B), the 
                term ``Round One Qualifying State'' means with respect 
                to a State that is 1 of the 50 States or the District 
                of Columbia, a State that has 1 of 28 highest averages 
                of the State rankings for each of the following 3 
                qualifying criteria, based on the most recent data 
                available as of April 1, 2008:
                            (i) Reduction in employment.--The year-to-
                        year reduction in total employment, based on 
                        the average total employment for the State or 
                        District in the 3 most recent months compared 
                        to the average total employment for the State 
                        or District in the same months a year earlier, 
                        as determined based on the most recent monthly 
                        publications of the Current Employer Statistics 
                        Survey of the Bureau of Labor Statistics.
                            (ii) Increase in food stamps 
                        participation.--The year-to-year increase in 
                        food stamps participation, based on average 
                        monthly participation for the State or District 
                        in the 3 most recent months compared to the 
                        average monthly participation for the State or 
                        District in the same months a year earlier, as 
                        determined based on the most recent monthly 
                        publications of Food and Nutrition Service Data 
                        of the Department of Agriculture.
                            (iii) Increase in the foreclosure rate.--
                        The year-to-year increase in the foreclosure 
                        rate for the State or District, based on the 
                        foreclosure rate for the State or District for 
                        the most recent quarter compared to the same 
                        quarter a year earlier, as determined by the 
                        Mortgage Bankers Association's National 
                        Delinquency Survey, as published in most recent 
                        report entitled, ``Recent Foreclosure Trends 
                        Report for all States''.
                    (B) Commonwealths and territories included.--Such 
                term includes a commonwealth or territory specified in 
                paragraph (4).
            (2) Round two qualifying state.--The term ``Round Two 
        Qualifying State'' means a State that is 1 of the 50 States or 
        the District of Columbia and that--
                    (A) has 1 of 38 highest averages of the State 
                rankings for the 3 qualifying criteria identified in 
                clauses (i), (ii), and (iii) of paragraph (1)(A), based 
                on the most recent data available as of October 1, 
                2008; and
                    (B) is not a Round One Qualifying State.
            (3) FMAP.--The term ``FMAP'' means the Federal medical 
        assistance percentage, as defined in section 1905(b) of the 
        Social Security Act (42 U.S.C. 1396d(b)).
            (4) State.--The term ``State'' means the 50 States, the 
        District of Columbia, the Commonwealth of Puerto Rico, the 
        United States Virgin Islands, Guam, the Commonwealth of the 
        Northern Mariana Islands, and American Samoa.
    (b) Assistance for Round One Qualifying States.--
            (1) Temporary increase of medicaid fmap.--
                    (A) Permitting maintenance of fiscal year 2007 fmap 
                for last 2 calendar quarters of fiscal year 2008.--
                Subject to subparagraphs (E), (F), (G), and (H), if the 
                FMAP determined without regard to this paragraph for a 
                Round One Qualifying State for fiscal year 2008 is less 
                than the FMAP as so determined for fiscal year 2007, 
                the FMAP for the State for fiscal year 2007 shall be 
                substituted for the State's FMAP for the third and 
                fourth calendar quarters of fiscal year 2008, before 
                the application of this paragraph.
                    (B) Permitting maintenance of fiscal year 2008 fmap 
                for first 3 quarters of fiscal year 2009.--Subject to 
                subparagraphs (E), (F), (G), and (H), if the FMAP 
                determined without regard to this paragraph for a Round 
                One Qualifying State for fiscal year 2009 is less than 
                the FMAP as so determined for fiscal year 2008, the 
                FMAP for the State for fiscal year 2008 shall be 
                substituted for the State's FMAP for the first, second, 
                and third calendar quarters of fiscal year 2009, before 
                the application of this paragraph.
                    (C) General 1.667 percentage points increase for 
                last 2 calendar quarters of fiscal year 2008 and first 
                3 calendar quarters of fiscal year 2009.--Subject to 
                subparagraphs (E), (F), (G), and (H), for each Round 
                One Qualifying State for the third and fourth calendar 
                quarters of fiscal year 2008 and for the first, second, 
                and third calendar quarters of fiscal year 2009, the 
                FMAP (taking into account the application of 
                subparagraphs (A) and (B)) shall be increased by 1.667 
                percentage points.
                    (D) Increase in cap on medicaid payments to 
                territories.--Subject to subparagraphs (E), (F), (G), 
                and (H), with respect to the third and fourth calendar 
                quarters of fiscal year 2008 and the first, second, and 
                third calendar quarters of fiscal year 2009, the 
                amounts otherwise determined for the Commonwealth of 
                Puerto Rico, the United States Virgin Islands, Guam, 
                the Commonwealth of the Northern Mariana Islands, and 
                American Samoa under subsections (f) and (g) of section 
                1108 of the Social Security Act (42 U.S.C. 1308) shall 
                each be increased by an amount equal to 3.334 percent 
                of such amounts.
                    (E) Scope of application.--The increases in the 
                FMAP for a Round One Qualifying State and the increases 
                in the cap amounts under subparagraph (D) under this 
                paragraph shall apply only for purposes of title XIX of 
                the Social Security Act and shall not apply with 
                respect to--
                            (i) disproportionate share hospital 
                        payments described in section 1923 of such Act 
                        (42 U.S.C. 1396r-4);
                            (ii) payments under title IV or XXI of such 
                        Act (42 U.S.C. 601 et seq. and 1397aa et seq.); 
                        or
                            (iii) any payments under XIX of such Act 
                        that are based on the enhanced FMAP described 
                        in section 2105(b) of such Act (42 U.S.C. 
                        1397ee(b)).
                    (F) State eligibility.--
                            (i) In general.--Subject to clause (ii), a 
                        Round One Qualifying State is eligible for an 
                        increase in its FMAP under subparagraph (C) or 
                        an increase in a cap amount under subparagraph 
                        (D) only if the eligibility under its State 
                        plan under title XIX of the Social Security Act 
                        (including any waiver under such title or under 
                        section 1115 of such Act (42 U.S.C. 1315)) is 
                        no more restrictive than the eligibility under 
                        such plan (or waiver) as in effect on December 
                        31, 2007.
                            (ii) State reinstatement of eligibility 
                        permitted.--A Round One Qualifying State that 
                        has restricted eligibility under its State plan 
                        under title XIX of the Social Security Act 
                        (including any waiver under such title or under 
                        section 1115 of such Act (42 U.S.C. 1315)) 
                        after December 31, 2007, is eligible for an 
                        increase in its FMAP under subparagraph (C) or 
                        an increase in a cap amount under subparagraph 
                        (D) in the first calendar quarter (and 
                        subsequent calendar quarters) in which the 
                        State has reinstated eligibility that is no 
                        more restrictive than the eligibility under 
                        such plan (or waiver) as in effect on December 
                        31, 2007.
                            (iii) Rule of construction.--Nothing in 
                        clause (i) or (ii) shall be construed as 
                        affecting a Round One Qualifying State's 
                        flexibility with respect to benefits offered 
                        under the State medicaid program under title 
                        XIX of the Social Security Act (42 U.S.C. 1396 
                        et seq.) (including any waiver under such title 
                        or under section 1115 of such Act (42 U.S.C. 
                        1315)).
                    (G) Requirement for certain states.--In the case of 
                a Round One Qualifying State that requires political 
                subdivisions within the State to contribute toward the 
                non-Federal share of expenditures under the State 
                Medicaid plan required under section 1902(a)(2) of the 
                Social Security Act (42 U.S.C. 1396a(a)(2)), the Round 
                One Qualifying State shall not require that such 
                political subdivisions pay a greater percentage of the 
                non-Federal share of such expenditures for the third 
                and fourth calendar quarters of fiscal year 2008 and 
                the first, second, and third calendar quarters of 
                fiscal year 2009, than the percentage that would have 
                been required by the State under such plan on December 
                31, 2007.
                    (H) Requirements.--A Round One Qualifying State--
                            (i) may not use the additional Federal 
                        funds paid to the State as a result of this 
                        paragraph for purposes of increasing any 
                        reserve or rainy day fund maintained by the 
                        State; and
                            (ii) shall expend the additional Federal 
                        funds paid to the State as a result of this 
                        paragraph within 1 year of the date on which 
                        the State receives such funds.
            (2) Targeted grants to round one qualifying states.--
                    (A) Appropriation.--There is authorized to be 
                appropriated and is appropriated for making payments to 
                Round One Qualifying States under this paragraph--
                            (i) $2,500,000,000 for fiscal year 2008; 
                        and
                            (ii) $2,500,000,000 for fiscal year 2009.
                    (B) Payments.--
                            (i) Fiscal year 2008.--From the amount 
                        appropriated under subparagraph (A)(i) for 
                        fiscal year 2008, the Secretary of the Treasury 
                        shall, not later than the later of the date 
                        that is 45 days after the date of enactment of 
                        this Act or the date that a Round One 
                        Qualifying State provides the certification 
                        required by subparagraph (E) for fiscal year 
                        2008, pay each such State the amount determined 
                        for the State for fiscal year 2008 under 
                        subparagraph (C).
                            (ii) Fiscal year 2009.--From the amount 
                        appropriated under subparagraph (A)(ii) for 
                        fiscal year 2009, the Secretary of the Treasury 
                        shall, not later than the later of October 1, 
                        2008, or the date that a Round One Qualifying 
                        State provides the certification required by 
                        subparagraph (E) for fiscal year 2009, pay each 
                        such State the amount determined for the State 
                        for fiscal year 2009 under subparagraph (C).
                    (C) Payments based on population.--
                            (i) In general.--Subject to clause (ii), 
                        the amount appropriated under subparagraph (A) 
                        for each of fiscal years 2008 and 2009 shall be 
                        used to pay each Round One Qualifying State an 
                        amount equal to the relative population 
                        proportion amount described in clause (iii) for 
                        such fiscal year.
                            (ii) Minimum payment.--
                                    (I) In general.--No Round One 
                                Qualifying State shall receive a 
                                payment under this paragraph for a 
                                fiscal year that is less than--
                                            (aa) in the case of a Round 
                                        One Qualifying State that is 1 
                                        of the 50 States or the 
                                        District of Columbia, \1/2\ of 
                                        1 percent of the amount 
                                        appropriated for such fiscal 
                                        year under subsection (a); and
                                            (bb) in the case of the 
                                        Commonwealth of Puerto Rico, 
                                        the United States Virgin 
                                        Islands, Guam, the Commonwealth 
                                        of the Northern Mariana 
                                        Islands, or American Samoa, \1/
                                        10\ of 1 percent of the amount 
                                        appropriated for such fiscal 
                                        year under subsection (a).
                                    (II) Pro rata adjustments.--The 
                                Secretary of the Treasury shall adjust 
                                on a pro rata basis the amount of the 
                                payments to Round One Qualifying States 
                                determined under this paragraph without 
                                regard to this subclause to the extent 
                                necessary to comply with the 
                                requirements of subclause (I).
                            (iii) Relative population proportion 
                        amount.--The relative population proportion 
                        amount described in this clause is the product 
                        of--
                                    (I) the amount described in 
                                subparagraph (A) for a fiscal year; and
                                    (II) the relative State population 
                                proportion (as defined in clause (iv)).
                            (iv) Relative state population proportion 
                        defined.--For purposes of clause (iii)(II), the 
                        term ``relative State population proportion'' 
                        means, with respect to a Round One Qualifying 
                        State, the amount equal to the quotient of--
                                    (I) the population of the State (as 
                                reported in the most recent decennial 
                                census); and
                                    (II) the total population of all 
                                such States (as reported in the most 
                                recent decennial census).
                    (D) Use of payment.--
                            (i) In general.--Subject to clause (ii), a 
                        Round One Qualifying State shall use the funds 
                        provided under a payment made under this 
                        paragraph for a fiscal year to--
                                    (I) provide essential government 
                                services;
                                    (II) cover the costs to the State 
                                of complying with any Federal 
                                intergovernmental mandate (as defined 
                                in section 421(5) of the Congressional 
                                Budget Act of 1974) to the extent that 
                                the mandate applies to the State, and 
                                the Federal Government has not provided 
                                funds to cover the costs; or
                                    (III) compensate for a decline in 
                                Federal funding to the State.
                            (ii) Requirements.--A Round One Qualifying 
                        State--
                                    (I) may only use funds provided 
                                under a payment made under this 
                                paragraph for types of expenditures 
                                permitted under the most recently 
                                approved budget for the State;
                                    (II) may not use the additional 
                                Federal funds paid to the State as a 
                                result of this paragraph for purposes 
                                of increasing any reserve or rainy day 
                                fund maintained by the State; and
                                    (III) shall expend the additional 
                                Federal funds paid to the State as a 
                                result of this paragraph within 1 year 
                                of the date on which the State receives 
                                such funds.
                    (E) Certification.--In order to receive a payment 
                under this section for a fiscal year, a Round One 
                Qualifying State shall provide the Secretary of the 
                Treasury with a certification that the State's proposed 
                uses of the funds are consistent with subparagraph (D).
    (c) Assistance for Round Two Qualifying States.--
            (1) Temporary increase of medicaid fmap.--
                    (A) Permitting maintenance of fiscal year 2008 fmap 
                for first 3 quarters of fiscal year 2009.--Subject to 
                subparagraph (C), if the FMAP determined without regard 
                to this paragraph for a Round Two Qualifying State for 
                fiscal year 2009 is less than the FMAP as so determined 
                for fiscal year 2008, the FMAP for the State for fiscal 
                year 2008 shall be substituted for the State's FMAP for 
                the first, second, and third calendar quarters of 
                fiscal year 2009, before the application of this 
                paragraph.
                    (B) General 1.667 percentage points increase for 
                first 3 calendar quarters of fiscal year 2009.--Subject 
                to subparagraph (C), for each Round Two Qualifying 
                State for the first, second, and third calendar 
                quarters of fiscal year 2009, the FMAP (taking into 
                account the application of subparagraph (A)) shall be 
                increased by 1.667 percentage points.
                    (C) Application of requirements for round one 
                qualifying states.--Subparagraphs (E), (F), (G), and 
                (H) of subsection (b)(1) apply to a Round Two 
                Qualifying State receiving an increase in its FMAP 
                under subparagraph (B) in the same manner as such 
                subparagraphs apply to a Round One Qualifying State 
                under such subsection.
            (2) Targeted grants to round two qualifying states.--
                    (A) Appropriation.--There is authorized to be 
                appropriated and is appropriated for making payments to 
                Round Two Qualifying States under this paragraph, 
                $1,000,000,000 for fiscal year 2009.
                    (B) Payments.--From the amount appropriated under 
                subparagraph (A) for fiscal year 2009, the Secretary of 
                the Treasury shall, not later than the later of October 
                1, 2008, or the date that a Round Two Qualifying State 
                provides the certification required by subparagraph (E) 
                of subsection (b)(2) for fiscal year 2009, pay each 
                such State the amount determined for the State for 
                fiscal year 2009 under subparagraph (C).
                    (C) Payments based on population.--
                            (i) In general.--Subject to clause (ii), 
                        the amount appropriated under subparagraph (A) 
                        for fiscal year 2009 shall be used to pay each 
                        Round Two Qualifying State an amount equal to 
                        the relative population proportion amount 
                        described in clause (iii) for such fiscal year.
                            (ii) Minimum payment.--
                                    (I) In general.--No Round Two 
                                Qualifying State shall receive a 
                                payment under this paragraph for fiscal 
                                year 2009 that is less than \1/2\ of 1 
                                percent of the amount appropriated for 
                                such fiscal year under subsection (a).
                                    (II) Pro rata adjustments.--The 
                                Secretary of the Treasury shall adjust 
                                on a pro rata basis the amount of the 
                                payments to Round Two Qualifying States 
                                determined under this paragraph without 
                                regard to this subclause to the extent 
                                necessary to comply with the 
                                requirements of subclause (I).
                            (iii) Relative population proportion 
                        amount.--The relative population proportion 
                        amount described in this clause is the product 
                        of--
                                    (I) the amount described in 
                                subparagraph (A) for a fiscal year; and
                                    (II) the relative State population 
                                proportion (as defined in clause (iv)).
                            (iv) Relative state population proportion 
                        defined.--For purposes of clause (iii)(II), the 
                        term ``relative State population proportion'' 
                        means, with respect to a Round Two Qualifying 
                        State, the amount equal to the quotient of--
                                    (I) the population of the State (as 
                                reported in the most recent decennial 
                                census); and
                                    (II) the total population of all 
                                such States (as reported in the most 
                                recent decennial census).
                    (D) Application of requirements for round one 
                qualifying states.--Subparagraphs (D) and (E) of 
                subsection (b)(2) apply to a Round Two Qualifying State 
                receiving a payment under subparagraph (B) in the same 
                manner as such subparagraphs apply to a Round One 
                Qualifying State under such subsection.
    (d) Repeal.--Effective as of October 1, 2009, this section is 
repealed.
                                 <all>