[Congressional Record Volume 149, Number 41 (Thursday, March 13, 2003)]
[Senate]
[Pages S3738-S3740]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN (for himself, Mr. Jeffords, Mrs. Murray, Mr. 
        Leahy, and Ms. Cantwell):
  S. 621. A bill to amend title XXI of the Social Security Act to allow 
qualifying States to use allotments under the State children's health 
insurance program for expenditures under the Medicaid program; to the 
Committee on Finance.
  Mr. BINGAMAN. Mr. President, I rise today to introduce legislation 
with Senators Jeffords, Murray, Leahy, and Cantwell entitled the 
``Children's Health Equity Act of 2003.'' This bill addresses an 
inequity that was created during the establishment of the State 
Children's Health Insurance Program, CHIP, that unfairly penalized 
certain States that had done the right thing and had expanded Medicaid 
coverage to children prior to the enactment of the bill.
  While the Congress recognized this fact for some States and 
``grandfathered'' in their expansions so those States could use the new 
CHIP funding for the children of their respective States, the 
legislation failed to do so for others, including New Mexico, Vermont, 
and Washington, among others. This had the effect of penalizing a 
certain group of States for having done the right thing.
  The ``Children's Health Equity Act of 2003'' addresses this inequity 
by allowing those States, which had expanded coverage to children up to 
185 percent of poverty by April 15, 1997, before the enactment of CHIP, 
to be allowed to also utilize their CHIP allotments for coverage of 
those children covered by Medicaid above 133 percent of poverty--
putting them on a more level field with all other States in the 
country.
  As you know, in 1997 Congress and President Clinton agreed to 
establish the State Children's Health Insurance Program, CHIP, and 
provide $48 billion over ten years as an incentive to States to provide 
health care coverage to uninsured, low-income children up 200 percent 
of poverty or beyond.
  During the negotiations of the Balanced Budget Act, BBA, of 1997, 
Congress and the Administration properly recognized that certain States 
were already undertaking Medicaid or separate State-run expansions of 
coverage to children up to 185 percent of poverty or above and that 
they would be allowed to use the new CHIP funding for those purposes. 
The final bill specifically allowed the States of Florida, New York, 
and Pennsylvania to convert their separate State-run programs into CHIP 
expansions and States that had expanded coverage to children through 
Medicaid after March 31, 1997, were also allowed to use CHIP funding 
for their expansions.

[[Page S3739]]

  Unfortunately, New Mexico and other States that had enacted similar 
expansions prior to March 1997 were denied the use of CHIP funding for 
their expansions. This created an inequity among the States where some 
were allowed to have their prior programs ``grandfathered'' into CHIP 
and others were denied. Therefore, our bill addresses this inequity.
  New Mexico has a strong record of attempting to expand coverage to 
children through the Medicaid program. In 1995, prior to the enactment 
of CHIP, New Mexico expanded coverage to for all children through age 
18 through the Medicaid program up to 185 percent of poverty. After 
CHIP was passed, New Mexico further expanded its coverage up to 235 
percent of poverty--above the level of the vast majority of states 
across the country.
  Due to the inequity caused by CHIP, New Mexico has been allocated 
$266 million from CHIP between fiscal years 1998 and 2002, and yet, has 
only been able to spend slightly over $26 million as of the end of last 
fiscal year. In other words, New Mexico has been allowed to spend less 
than 10 percent of its federal CHIP allocations.
  New Mexico is unable to spend its funding because it had enacted its 
expansion of coverage to children up to 185 percent of poverty prior to 
the enactment of CHIP and our State was not ``grandfathered'' into CHIP 
as other comparable states were.
  The consequences for the children of New Mexico are enormous. 
According to the Census Bureau, New Mexico has an estimated 114,000 
uninsured children. In other words, almost 21 percent of all the 
children in New Mexico are uninsured, despite the fact the State has 
expanded coverage up to 235 percent of poverty. This is the second 
highest rate of uninsured children in the country.
  This is a result of the fact that an estimated 80 percent of the 
uninsured children in New Mexico are below 200 percent of poverty. 
These children are, consequently, often eligible for Medicaid but 
currently unenrolled. With the exception of those few children between 
185 and 200 percent of poverty who are eligible for CHIP funding, all 
of the remaining uninsured children below 185 percent of poverty in New 
Mexico are denied CHIP funding despite their need.
  Exacerbating this inequity is the fact that many States are accessing 
their CHIP allotments to cover kids at poverty levels far below New 
Mexico's current or past eligibility levels. The children in those 
States are certainly no more worthy of health insurance coverage than 
the children of New Mexico.
  As the health policy statement by the National Governors' Association 
reads, ``The Governors believe that it is critical that innovative 
states not be penalized for having expanded coverage to children before 
the enactment of S-CHIP, which provides enhanced funding to meet these 
goals. To this end, the Governors support providing additional funding 
flexibility to states that had already significantly expanded coverage 
to the majority of uninsured children in their states.''
  Consequently, the bill I am introducing today corrects this inequity. 
The bill reflects a carefully-crated response to the unintended 
consequences of CHIP and brings much needed assistance to children 
currently uninsured in my State and other similarly situated States, 
including Washington and Vermont.
  Rather than simply changing the effective date included in the BBA 
that helped a smaller subset of States, this initiative includes strong 
maintenance of effort language as well as incentives for our State to 
conduct outreach and enrollment efforts and program simplification to 
find and enroll uninsured kids because we feel strongly that they must 
receive the health coverage for which they are eligible.
  The bill does not take money from other States' CHIP allotments. It 
simply allows our States to spend our States' specific CHIP allotments 
from the Federal Government on our uninsured children--just as other 
states across the country are doing.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 621

       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 ``Children's Health Equity Act 
     of 2003''.

     SEC. 2. AUTHORITY FOR QUALIFYING STATES TO USE SCHIP FUNDS 
                   FOR MEDICAID EXPENDITURES.

       Section 2105 of the Social Security Act (42 U.S.C. 1397ee) 
     is amended by adding at the end the following:
       ``(g) Authority for Qualifying States To Use Certain Funds 
     for Medicaid Expenditures.--
       ``(1) State option.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, with respect to fiscal years in which allotments for a 
     fiscal year under section 2104 (beginning with fiscal year 
     1998) are available under subsections (e) and (g) of that 
     section, a qualifying State (as defined in paragraph (2)) may 
     elect to use such allotments (instead of for expenditures 
     under this title) for payments for such fiscal year under 
     title XIX in accordance with subparagraph (B).
       ``(B) Payments to states.--
       ``(i) In general.--In the case of a qualifying State that 
     has elected the option described in subparagraph (A), subject 
     to the total amount of funds described with respect to the 
     State in subparagraph (A), the Secretary shall pay the State 
     an amount each quarter equal to the additional amount that 
     would have been paid to the State under title XIX for 
     expenditures of the State for the fiscal year described in 
     clause (ii) if the enhanced FMAP (as determined under 
     subsection (b)) had been substituted for the Federal medical 
     assistance percentage (as defined in section 1905(b)) of such 
     expenditures.
       ``(ii) Expenditures described.--For purposes of clause (i), 
     the expenditures described in this clause are expenditures 
     for such fiscal years for providing medical assistance under 
     title XIX to individuals who have not attained age 19 and 
     whose family income exceeds 133 percent of the poverty line.
       ``(iii) No impact on determination of budget neutrality for 
     waivers.--In the case of a qualifying State that uses amounts 
     paid under this subsection for expenditures described in 
     clause (ii) that are incurred under a waiver approved for the 
     State, any budget neutrality determinations with respect to 
     such waiver shall be determined without regard to such 
     amounts paid.
       ``(2) Qualifying state.--In this subsection, the term 
     `qualifying State' means a State that--
       ``(A) as of April 15, 1997, has an income eligibility 
     standard with respect to any 1 or more categories of children 
     (other than infants) who are eligible for medical assistance 
     under section 1902(a)(10)(A) or under a waiver under section 
     1115 implemented on January 1, 1994, that is up to 185 
     percent of the poverty line or above; and
       ``(B) satisfies the requirements described in paragraph 
     (3).
       ``(3) Requirements.--The requirements described in this 
     paragraph are the following:
       ``(A) SCHIP income eligibility.--The State has a State 
     child health plan that (whether implemented under title XIX 
     or this title)--
       ``(i) as of January 1, 2001, has an income eligibility 
     standard that is at least 200 percent of the poverty line or 
     has an income eligibility standard that exceeds 200 percent 
     of the poverty line under a waiver under section 1115 that is 
     based on a child's lack of health insurance;
       ``(ii) subject to subparagraph (B), does not limit the 
     acceptance of applications for children; and
       ``(iii) provides benefits to all children in the State who 
     apply for and meet eligibility standards on a statewide 
     basis.
       ``(B) No waiting list imposed.--With respect to children 
     whose family income is at or below 200 percent of the poverty 
     line, the State does not impose any numerical limitation, 
     waiting list, or similar limitation on the eligibility of 
     such children for child health assistance under such State 
     plan.
       ``(C) Additional requirements.--The State has implemented 
     at least 3 of the following policies and procedures (relating 
     to coverage of children under title XIX and this title):
       ``(i) Uniform, simplified application form.--With respect 
     to children who are eligible for medical assistance under 
     section 1902(a)(10)(A), the State uses the same uniform, 
     simplified application form (including, if applicable, 
     permitting application other than in person) for purposes of 
     establishing eligibility for benefits under title XIX and 
     this title.
       ``(ii) Elimination of asset test.--The State does not apply 
     any asset test for eligibility under section 1902(l) or this 
     title with respect to children.
       ``(iii) Adoption of 12-month continuous enrollment.--The 
     State provides that eligibility shall not be regularly 
     redetermined more often than once every year under this title 
     or for children described in section 1902(a)(10)(A).
       ``(iv) Same verification and redetermination policies; 
     automatic reassessment of eligibility.--With respect to 
     children who are eligible for medical assistance under 
     section 1902(a)(10)(A), the State provides for initial 
     eligibility determinations and redeterminations of 
     eligibility using the same verification policies (including 
     with respect to face-to-face interviews), forms, and 
     frequency as the State uses for such purposes

[[Page S3740]]

     under this title, and, as part of such redeterminations, 
     provides for the automatic reassessment of the eligibility of 
     such children for assistance under title XIX and this title.
       ``(v) Outstationing enrollment staff.--The State provides 
     for the receipt and initial processing of applications for 
     benefits under this title and for children under title XIX at 
     facilities defined as disproportionate share hospitals under 
     section 1923(a)(1)(A) and Federally-qualified health centers 
     described in section 1905(l)(2)(B) consistent with section 
     1902(a)(55).''.
                                 ______