[Congressional Record Volume 149, Number 67 (Wednesday, May 7, 2003)]
[Senate]
[Pages S5862-S5871]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN (for himself, Mr. Corzine, Mrs. Clinton, Mr. 
        Kerry, Mr. Lautenberg, Mr. Dayton, and Mr. Johnson):
  S. 1012. A bill to amend title XIX of the Social Security Act to 
provide fiscal relief and program simplification to States, to improve 
coverage and services to medicaid beneficiaries, and for other 
purposes; to the Committee on Finance.
  Mr. BINGAMAN. Mr. President, our Nation's States and health safety 
net are simultaneously facing a crisis. According to State budget 
officers, the states are facing a nearly $30 billion budget shortfall 
this year and an $80 billion gap in fiscal year 2004 due to the 
economic recession. At the same time, it is estimated that the number 
of uninsured increased from 41 to 45 million this past year. And, due 
to the State budget shortfalls, the numbers of uninsured may increase 
even further.
  In fact, the lead paragraph in the New York Times in an article 
entitled ``Cutbacks Imperil Health Coverage for States' Poor'' on April 
28, 2003, reads, ``Millions of low-income Americans face the loss of 
health insurance or sharp cuts in benefits, like coverage for 
prescription drugs and dental care, under proposals now moving through 
state legislatures around the country.''
  The article continues, ``State officials and health policy experts 
say the cuts will increase the number of uninsured, threaten recent 
progress in covering children and impose severe strains on hospitals, 
doctors and nursing homes.''
  As a result, I believe the Federal Government should take immediate 
steps to fundamentally reassert and reassert its role in helping the 
States with this fiscal crisis and rising Medicaid costs, lowering the 
number of uninsured, and finally, confronting infant and maternal 
mortality and morbidity statistics that are unworthy of our great 
Nation.
  To address these issues, today and tomorrow, I will be introducing 
three relevant bills. The first addresses the fiscal crisis confronting 
States and the Medicaid program entitled ``Strengthening Our States,'' 
or the ``SOS Act.''
  The second addresses our Nation's long-standing and growing crisis of 
the uninsured that is entitled the ``Health Coverage, Affordability, 
Responsibility, and Equity Act'' or the ``Health CARE Act.''
  The final bill takes on our Nation's high infant and mortality rates 
and is called the ``Start Healthy, Stay Health Act.''
  First things first. In any campaign--whether in sports, business, or 
politics--you have to have both offensive and defensive strategies. In 
trying to reduce the number of uninsured in our country, we must first, 
as an emergency room doctor would, stop the bleeding. Therefore, our 
first priority should be to support and strengthen the Medicaid 
program.
  Unfortunately, the Center on Budget and Policy Priorities estimated 
in March that as many as 1.7 million Americans could lose coverage 
altogether under proposals advanced by governors or adopted by State 
legislative committees this year.
  Therefore, I am introducing today with Senators Corzine, Clinton, 
Kerry, Lautenberg, Dayton, and Johnson legislation entitled the 
``Strengthening Our States Act of 2003.'' This bill is a companion bill 
to that being introduced by Representative Dingell, Brown of Ohio, 
Waxman, and others and is aimed at improving Medicaid and providing 
support to States to enhance their ability to provide coverage to their 
uninsured residents in these difficult times.
  The SOS Act uses a combination of approaches which: first, provide 
additional Federal fiscal relief to States; second, provide additional 
flexibility to States in administering and improving the Medicaid 
program; and third, provide incentives and assistance to stave off cuts 
to existing coverage, and facilitate coverage expansions in the future.
  The legislation will simplify Medicaid and enable States to 
strengthen the program and stands in sharp contrast to the President's 
proposal to convert Medicaid into a block grant that would erode health 
insurance coverage.
  In fact, the Administration's prescription is the wrong medicine for 
the wrong ailment. The Federal Government should be stepping up its 
commitment to seniors, people with disabilities, and low-income 
children rather than stepping away and leaving States holding the bag.
  First and foremost, our legislation acknowledges and reflects on the 
important role that Medicaid plays in our entire health care system. As 
Diane Rowland and Jim Tallon of the Kaiser Commission on Medicaid and 
the Uninsured have noted: ``. . . it is hard to envision our health 
system and society without a program like Medicaid. Medicaid is the 
glue that helps hold our health system together and takes on the 
highest-risk, sickest, and most expensive populations from private 
insurance and Medicare. For low-income Medicare beneficiaries, Medicaid 
picks

[[Page S5863]]

up Medicare premiums and some cost sharing as well as filling the gaps 
in coverage for long-term care services, prescription drugs, and vision 
and dental care.''
  Medicaid addresses the failure of the marketplace to deliver 
affordable health coverage to our Nation's most fragile and vulnerable 
citizens. However, there is no reason why it should also have to play 
the role of picking up the slack of the Medicare program. A central 
tenet of our SOS proposal is for the Federal Government to begin taking 
the steps to assume 100 percent of the costs associated with care and 
services in Medicaid for Medicare beneficiaries, also known as dual 
eligibles.
  This, I would add, is in keeping with long-standing policy of the 
National Governors' Association, or NGA, and is in sharp contrast to 
the Administration's proposal to maintain the current Medicaid 
financing system for mandatory populations and services while block 
granting care of optional populations and services to States. Who are 
these optional populations? They are largely the elderly and people 
with disabilities, many of whom are dually eligible for Medicare and 
Medicaid.

  According to the Kaiser Commission on Medicaid and the Uninsured, 83 
percent of all Medicaid spending on the elderly is for either optional 
populations or services, such as prescription drugs and long-term care. 
In fact, according to Cindy Mann of Georgetown University and a former 
Medicaid director under the Clinton Administration, an estimated 35 
percent of all State Medicaid costs are for so-called ``dual 
eligibles.''
  Therefore, rather than stepping up to the plate, the Administration 
is instead stepping away from its commitment to the elderly and 
disabled, which should be our responsibility at the Federal level, by 
moving these groups and their health care services into a block grant. 
Groups representing the elderly and disabled communities have already 
spoken out against this.
  As AARP Executive Director and CEO Bill Novelli says, ``This 
[Administration's block grant] proposal handcuffs states because it 
leaves people more vulnerable in future years as States struggle to 
meet increased needs with decreased dollars.''
  The Consortium for Citizens with Disabilities adds, ``The Bush 
Administration proposal fails people with disabilities and dishonors 
the Nation's commitment to its residents--it is not in the national 
interest. . . . What the Medicaid program calls `optional' services 
are, in reality, mandatory disability services for the children and 
adults who need them. These services often are not only life-saving, 
but also the key to a positive quality of life--something everyone in 
our nation deserves.''
  Again, the Federal Government should be stepping up its commitment to 
seniors and people with disabilities rather than stepping away, as the 
President's proposal does.
  With respect to the fiscal crisis facing states, the Administration 
has long opposed fiscal relief to States as part of its economic 
stimulus package. Instead, the Administration points out that its 
Medicaid block grant proposal provides more funding up front to States, 
in the amount of $3.5 billion over one year and $12.7 billion over the 
first seven years to help States. But the proposal has strong elements 
of a typical bait and switch by yanking every dime of that money away 
starting in 2011. Secretary Thompson noted at the press conference that 
he would not be around at the time of the $12.7 billion in reductions 
eight years from now and the plan clearly counts on the fact that most 
of this crop of governors would not be either.
  However, that is exactly when our Nation's baby boomers hit 
retirement age in rapidly increasing numbers and the long term care 
costs within Medicaid will significantly increase.
  In sharp contrast, the SOS Act includes a temporary increase in the 
Federal matching assistance percentage, or FMAP, to state Medicaid 
programs in the amount of $15 billion and another $15 billion in 
additional aid to States--far more than the temporary $3 billion 
offered by the Administration.
  Also, unlike a block grant, the current Medicaid matching rate is 
responsive to States in times of recessions by providing Federal 
matching funds to States for each additional person who becomes 
eligible for Medicaid. Moreover, our SOS Act recognizes the formula can 
be even more responsive by preserving coverage during difficult times 
and includes a General Accounting Office study of ways to make the 
formula more responsive to fiscal distress during either a national or 
State recession.
  In addition, the Strengthening Our States Act would increase Federal 
payments for certain services critical for special populations or 
federally-imposed services. It would provide enhanced Federal funding 
for urban Indian health services, translation services, outstationed 
workers, and reimbursement to health providers for emergency services 
delivered undocumented individuals who are otherwise eligible for 
Medicaid. Again, the Administration's proposal simply block grants 
funding for these services and steps away from its Federal 
responsibility.
  For example, services delivered to Native Americans by Indian Health 
Service providers and health organizations are reimbursed at 100 
percent federal match currently in recognition of the Federal 
responsibility and role in delivering services to Native Americans 
apart from States. Under a block grant, the Federal match is eliminated 
and the Federal role in providing care to Native Americans is 
abandoned. This is contrary to longstanding Federal policy and its 
relationship with tribes and tribal organizations and to policy by the 
National Governors' Association.
  And finally, with respect to giving States flexibility and assistance 
to expand upon existing coverage options, the Strengthening Our States 
Act is far better and responsive to states than a block grant. Block 
grants do not adjust for population changes, recessions, or efforts to 
expand coverage by States. At its unveiling, Secretary Thompson spoke 
about the added options the block grants offer States to expand 
coverage. However, it does so with no new funding. This offer of 
flexibility is, therefore, illusory.
  In fact, because Federal funding is capped for optional opulations by 
the Administration's block grant, states cannot draw down additional 
Federal support when it chooses to expand coverage. Under current law 
and the SOS Act, they can. Some of the more ground-breaking efforts by 
states such as those by Vermont, Washington, Minnesota, Rhode Island, 
Hawaii, and even Wisconsin, would have likely never come to pass 
without that added Federal support.
  Therefore, the SOS Act continues and expands upon that Federal 
support by giving States additional coverage options, such as to set 
uniform eligibility levels for families rather than covering parents 
and children separately. The SOS Act also would make States eligible 
for enhanced matching funds to cover low-income working parents under 
Medicaid.
  States should also beware of the Administration's promise of 9 
percent growth rates for the next 10 years. Earlier this year, the 
House of Representatives passed a budget that would have reduced 
Medicaid spending by $92 billion over 10 years. While that was rejected 
in conference, such efforts become much easier under the rubric of a 
block grant. Again, recent history contains many such promises and 
examples.
  For example, as the NGA policy on the Social Service Block Grant 
notes, during passage of TANF, ``Congress and the Administration made a 
commitment to Governors to fund SSBG at $2.38 billion each year through 
fiscal year 2002, with the funding increasing to $2.8 billion in fiscal 
2003 and each year thereafter.'' The reality is that funding has been 
reduced to $1.7 billion in fiscal years 2002 and 2003, 65 percent below 
the promised funding levels.
  There is an old saying, which goes, ``Fool me once, shame on you. 
Fool me twice, shame on me.'' When members of Congress and future 
Administrations see 9 percent growth rates in these Medicaid block 
grants and have a particular tax cut, Medicare change, transportation 
program, or whatever they wish to fund, you can already hear them 
saying, ``What if we just reduce the growth rates to 8 percent or 7 
percent or 6 percent or 5 percent. . . .'' Well, we all can see where 
this rapidly heads and we have all been fooled once before.

[[Page S5864]]

  Some governors, including Secretary Thompson, seem to have a short 
memory on these matters. On April 14, 1997, 41 Governors, including 
Secretary Thompson, Bush Administration Cabinet Members Tom Ridge, and 
Christine Todd Whitman, wrote President Clinton, and said: ``We 
adamantly oppose a cap on federal Medicaid spending in any form. 
Unilateral caps in federal Medicaid spending will result in cost shifts 
to states, enabling the federal government to balance its budget at the 
expense of the states.''
  What was true then remains true 6 years later.
  Moreover, on behalf of the NGA, Governors Bob Miller of Nevada and 
Mike Leavitt testified before the Senate Finance Committee and made the 
following statement: ``. . . caps could result in states becoming 
solely responsible for unexpected program costs, such as a loss in a 
lawsuit on reimbursement rates or the development of expensive new 
therapies that drive up treatment costs beyond the federal allowable 
rate.
  They added: ``. . . the cost shift resulting from a unilateral cap 
would present states with a number of bad alternatives. States 
essentially would have to choose between cutting back on payment rates 
to providers, eliminating optional benefits provided to recipients, 
ending coverage for optional beneficiaries, or coming up with 
additional state funds to absorb 100 percent of the cost of services.''
  I do not see why this needs to be an all-or-nothing proposition. Why 
do we have to throw out the entire Medicaid financing structure, which 
benefits States, beneficiaries, and providers, in order to grant States 
additional flexibility to their programs?
  In 1997, we rejected the all-or-nothing proposal and worked with the 
States and gave them a package of added flexibility, including the 
ability to enroll much of their Medicaid population in managed care 
without the need for a waiver.
  Secretary Thompson talks a great deal about the flexibility the block 
grant offers and cites the need to allow States the ability to move 
people out of institutional settings into more appropriate home- and 
community-based settings and is right. Under the block grant, States 
are only granted additional flexibility to do so if they accept a block 
grant. In contrast, the SOS Act provides States an enhanced Federal 
matching rate to provide home- and community-based services.
  However, rather than saying to States that they can only do so 
through the acceptance of a block grant, why can't we provide them this 
option without the imposition of a Federal limit on funding? Both 
states and beneficiary groups are asking for it and we can and should 
act.
  It is on this point that I must add that the Medicaid program was not 
created for Federal officials or governors. We all clearly need to be 
reminded that there are other stakeholders in the Medicaid program, 
including the 43 million people served by the program.
  As Alan Weil of the Urban institute and the former Medicaid director 
of the State of Colorado wrote in a recent article published in Health 
Affairs: ``If money is at the heart of debates over Medicaid, the 
millions of indigent people whose varied and complex medical needs are 
met by the program are its sole. The amount of human suffering the 
program alleviates is immense.''
  As the Administration attempts to proceed on negotiations with the 
governors on a deal on block grants, let's not forget the children, 
mothers, seniors, and people with disabilities served by Medicaid. The 
SOS Act provides a far better alternative.
  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. 1012

       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 
     ``Strengthening Our States Act of 2003'' or the ``SOS Act of 
     2003''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:
Sec. 1. Short title; table of contents.

      TITLE I--STRENGTHENING FEDERAL RESPONSIBILITY FOR MEDICARE 
                             BENEFICIARIES

Sec. 101. Assuming Federal responsibility for all medicare cost-
              sharing.
Sec. 102. Expanded protections for low income medicare beneficiaries.

                TITLE II--PROVIDING STATES FISCAL RELIEF

Sec. 201. Temporary increase of medicaid FMAP.
Sec. 202. Temporary grants for State fiscal relief.
Sec. 203. Increasing medicaid DSH allotments.
Sec. 204. Increased State access to unspent SCHIP funds.
Sec. 205. Federal responsibility for emergency care for illegal 
              immigrants.
Sec. 206. Increased Federal responsibility for translation services.
Sec. 207. Increased Federal matching rates for certain services.

  TITLE III--HELPING STATES WITH COMMITMENT TO ELDERLY AND DISABLED; 
                         FAMILY OPPORTUNITY ACT

           Subtitle A--Elderly and Persons with Disabilities

Sec. 301. Full accounting of savings in determining cost-effectiveness.
Sec. 302. Extension of medicaid coverage under the ticket to work 
              program to cover spouses.
Sec. 303. Encouraging transition to home and community care.
Sec. 304. Enhanced matching rate for disabled individuals awaiting 
              medicare eligibility.
Sec. 305. Providing initial term of 5 years for section 1915 waivers.
Sec. 306. Optional coverage of community-based attendant services and 
              supports under the medicaid program.

                   Subtitle B--Family Opportunity Act

Sec. 311. Short title.
Sec. 312. Opportunity for families of disabled children to purchase 
              medicaid coverage for such children.
Sec. 313. Treatment of inpatient psychiatric hospital services for 
              individuals under age 21 in home or community-based 
              services waivers.
Sec. 314. Demonstration of coverage under the medicaid program of 
              children with potentially severe disabilities.
Sec. 315. Development and support of family-to-family health 
              information centers.
Sec. 316. Restoration of medicaid eligibility for certain SSI 
              beneficiaries.

 TITLE IV--FACILITATING PROGRAM ADMINISTRATION AND PRESERVING COVERAGE

Sec. 401. Allowing uniform coverage of all low income Americans.
Sec. 402. Facilitating coverage of families.
Sec. 403. Assistance with coverage of legal immigrants under the 
              medicaid program and SCHIP.
Sec. 404. Flexibility in eligibility determinations.

      TITLE I--STRENGTHENING FEDERAL RESPONSIBILITY FOR MEDICARE 
                             BENEFICIARIES

     SEC. 101. ASSUMING FEDERAL RESPONSIBILITY FOR ALL MEDICARE 
                   COST-SHARING.

       (a) In General.--Section 1905(b) of the Social Security Act 
     (42 U.S.C. 1396d(b)) is amended--
       (1) by striking ``and'' before ``(4)''; and
       (2) by inserting before the period the following: ``, and 
     (5) the Federal medical assistance percentage shall be 100 
     percent with respect to medical assistance provided with 
     costs described in section 1905(p)(3)''.
       (b) Conforming Amendment.--Section 1902 of such Act (42 
     U.S.C. 1396a) is amended by striking subsection (n).
       (c) Effective Date.--The amendments made by this section 
     shall apply to medical assistance for medicare cost-sharing 
     for months beginning with July 2003.

     SEC. 102. EXPANDED PROTECTIONS FOR LOW INCOME MEDICARE 
                   BENEFICIARIES.

       (a) In General.--Section 1902(a)(10)(E) of the Social 
     Security Act (42 U.S.C. 1396a(a)(10)(E)) is amended--
       (1) by adding ``and'' at the end of clause (ii);
       (2) in clause (iii), by striking ``110 percent in 1993 and 
     1994, and 120 percent in 1995 and years'' and inserting ``135 
     percent''; and
       (3) by striking clause (iv).
       (b) Conforming Amendment.--Section 1933 of such Act (42 
     U.S.C. 1396v) is repealed.
       (c) Effective Date.--The amendments made by subsection (a), 
     and the repeal made by subsection (b), shall apply to months 
     after September 2003.

                TITLE II--PROVIDING STATES FISCAL RELIEF

     SEC. 201. TEMPORARY INCREASE OF MEDICAID FMAP.

       (a) Permitting Maintenance of Fiscal Year 2002 FMAP for 
     Last 2 Calendar Quarters of Fiscal Year 2003.--
     Notwithstanding any other provision of law, but subject to 
     subsection (e), if the FMAP determined without regard to this 
     section for a State for fiscal year 2003 is less than the 
     FMAP as so determined for fiscal year 2002, the FMAP for the 
     State for fiscal year 2002 shall be substituted for the 
     State's FMAP for the third and fourth calendar quarters of 
     fiscal year 2003, before the application of this section.
       (b) Permitting Maintenance of Fiscal Year 2003 FMAP for 
     Fiscal Year 2004.--

[[Page S5865]]

     Notwithstanding any other provision of law, but subject to 
     subsection (e), if the FMAP determined without regard to this 
     section for a State for fiscal year 2004 is less than the 
     FMAP as so determined for fiscal year 2003, the FMAP for the 
     State for fiscal year 2003 shall be substituted for the 
     State's FMAP for each calendar quarter of fiscal year 2004, 
     before the application of this section.
       (c) General 3.73 Percentage Points Increase for Last 2 
     Calendar Quarters of Fiscal Year 2003 and Fiscal Year 2004.--
     Notwithstanding any other provision of law, but subject to 
     subsections (e) and (f), for each State for the third and 
     fourth calendar quarters of fiscal year 2003 and each 
     calendar quarter of fiscal year 2004, the FMAP (taking into 
     account the application of subsections (a) and (b)) shall be 
     increased by 3.73 percentage points.
       (d) Increase in Cap on Medicaid Payments to Territories.--
     Notwithstanding any other provision of law, but subject to 
     subsection (f), with respect to the third and fourth calendar 
     quarters of fiscal year 2003 and each calendar quarter of 
     fiscal year 2004, the amounts otherwise determined for Puerto 
     Rico, the Virgin Islands, Guam, 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 7.46 percent of such 
     amounts.
       (e) Scope of Application.--The increases in the FMAP for a 
     State under this section shall apply only for purposes of 
     title XIX of the Social Security Act and shall not apply with 
     respect to--
       (1) disproportionate share hospital payments described in 
     section 1923 of such Act (42 U.S.C. 1396r-4); or
       (2) payments under title IV or XXI of such Act (42 U.S.C. 
     601 et seq. and 1397aa et seq.).
       (f) State Eligibility.--
       (1) In general.--Subject to paragraph (2), a State is 
     eligible for an increase in its FMAP under subsection (c) or 
     an increase in a cap amount under subsection (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 September 2, 2003.
       (2) State reinstatement of eligibility permitted.--A 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 September 2, 2003, but prior to the date of 
     enactment of this Act is eligible for an increase in its FMAP 
     under subsection (c) or an increase in a cap amount under 
     subsection (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 September 2, 
     2003.
       (3) Rule of construction.--Nothing in paragraph (1) or (2) 
     shall be construed as affecting a 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) Definitions.--In this section:
       (1) 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)).
       (2) State.--The term ``State'' has the meaning given such 
     term for purposes of title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.).
       (h) Repeal.--Effective as of October 1, 2004, this section 
     is repealed.

     SEC. 202. TEMPORARY GRANTS FOR STATE FISCAL RELIEF.

       (a) In General.--Title XX of the Social Security Act (42 
     U.S.C. 1397-1397f) is amended by adding at the end the 
     following:

     ``SEC. 2008. ADDITIONAL TEMPORARY GRANTS FOR STATE FISCAL 
                   RELIEF.

       ``(a) In General.--For the purpose of providing State 
     fiscal relief allotments to States under this section, there 
     are hereby appropriated, out of any funds in the Treasury not 
     otherwise appropriated, $15,000,000,000. Such funds shall be 
     available for obligation by the State through June 30, 2005, 
     and for expenditure by the State through September 30, 2005. 
     This section constitutes budget authority in advance of 
     appropriations Acts and represents the obligation of the 
     Federal Government to provide for the payment to States of 
     amounts provided under this section.
       ``(b) Allotment.--Funds appropriated under subsection (a) 
     shall be allotted by the Secretary among the States in 
     accordance with the following table:

       

------------------------------------------------------------------------
               ``State                       Allotment (in dollars)
------------------------------------------------------------------------
 Alabama                                $170,940,139
 Alaska                                 $42,076,374
 Amer. Samoa                            $414,007
 Arizona                                $261,264,449
 Arkansas                               $133,398,723
 California                             $1,583,851,051
 Colorado                               $143,030,332
 Connecticut                            $207,204,156
 Delaware                               $38,537,434
 District of Columbia                   $65,034,813
 Florida                                $624,655,953
 Georgia                                $368,582,068
 Guam                                   $669,845
 Hawaii                                 $46,337,939
 Idaho                                  $48,659,904
 Illinois                               $543,631,283
 Indiana                                $271,629,605
 Iowa                                   $130,309,854
 Kansas                                 $94,370,028
 Kentucky                               $212,122,967
 Louisiana                              $239,827,085
 Maine                                  $92,781,591
 Maryland                               $236,000,265
 Massachusetts                          $472,765,757
 Michigan                               $435,451,207
 Minnesota                              $302,429,550
 Mississippi                            $176,956,163
 Missouri                               $302,534,081
 Montana                                $36,437,168
 Nebraska                               $79,550,313
 Nevada                                 $52,331,624
 New Hampshire                          $54,101,351
 New Jersey                             $411,954,920
 New Mexico                             $112,850,197
 New York                               $2,383,327,447
 North Carolina                         $439,742,488
 North Dakota                           $27,253,781
 N. Mariana Islands                     $233,880
 Ohio                                   $616,448,513
 Oklahoma                               $146,240,811
 Oregon                                 $167,002,460
 Pennsylvania                           $745,862,667
 Puerto Rico                            $18,916,230
 Rhode Island                           $80,098,624
 South Carolina                         $184,217,430
 South Dakota                           $30,302,145
 Tennessee                              $350,273,887
 Texas                                  $814,722,031
 Utah                                   $63,422,131
 Vermont                                $40,549,714
 Virgin Islands                         $624,499
 Virginia                               $215,155,129
 Washington                             $298,697,312
 West Virginia                          $95,818,709
 Wisconsin                              $270,901,128
 Wyoming                                $17,496,788
------------------------------------------------------------------------
 Total                                  $15,000,000,000
------------------------------------------------------------------------

       ``(c) Use of Funds.--Funds appropriated under this section 
     may be used by a State for services directed at the goals set 
     forth in section 2001, subject to the requirements of this 
     title.
       ``(d) Payment to States.--Not later than 30 days after 
     amounts are appropriated under subsection (a), in addition to 
     any payment made under section 2002 or 2007, the Secretary 
     shall make a lump sum payment to a State of the total amount 
     of the allotment for the State as specified in subsection 
     (b).
       ``(e) Definition.--For purposes of this section, the term 
     `State' means the 50 States, the District of Columbia, and 
     the territories contained in the list under subsection 
     (b).''.
       (b) Repeal.--Effective as of October 1, 2005, section 2008 
     of the Social Security Act, as added by subsection (a), is 
     repealed.
       (c) GAO Study and Report.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study to determine an appropriate index that 
     could be used to temporarily adjust the Federal medical 
     assistance percentage for purposes of programs authorized 
     under the Social Security Act either with respect to all 
     States during a period of national recession or with respect 
     to a specific State when the State's economy takes a 
     significant turn for the worse.
       (2) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the Comptroller General of the United 
     States shall submit a report to Congress on the study 
     conducted under paragraph (1).

     SEC. 203. INCREASING MEDICAID DSH ALLOTMENTS.

       (a) Continuation of Medicaid DSH Allotment Adjustments 
     Under BIPA 2000.--
       (1) In general.--Section 1923(f) of the Social Security Act 
     (42 U.S.C. 1396r-4(f))--
       (A) in paragraph (2)--
       (i) in the heading, by striking ``through 2002'' and 
     inserting ``through 2000'';
       (ii) by striking ``ending with fiscal year 2002'' and 
     inserting ``ending with fiscal year 2000''; and
       (iii) in the table in such paragraph, by striking the 
     columns labeled ``FY 01'' and ``FY02'';
       (B) in paragraph (3)(A), by striking ``paragraph (2)'' and 
     inserting ``paragraph (4)''; and
       (C) in paragraph (4), as added by section 701(a)(1) of the 
     Medicare, Medicaid, and SCHIP Benefits Improvement and 
     Protection Act of 2000 (as enacted into law by section 
     1(a)(6) of Public Law 106-554)--
       (i) by striking ``for fiscal years 2001 and 2002'' in the 
     heading;
       (ii) in subparagraph (A), by striking ``Notwithstanding 
     paragraph (2), the'' and inserting ``The'';
       (iii) in subparagraph (C)--

       (I) by striking ``No application'' and inserting 
     ``Application''; and
       (II) by striking ``without regard to'' and inserting 
     ``taking into account''.

       (2) Increase in medicaid dsh allotment for the district of 
     columbia.--
       (A) In general.--Effective for DSH allotments beginning 
     with fiscal year 2003, the item in the table contained in 
     section 1923(f)(2) of the Social Security Act (42 U.S.C. 
     1396r-4(f)(2)) for the District of Columbia for the DSH 
     allotment for FY 00 (fiscal year 2000) is amended by striking 
     ``32'' and inserting ``49''.
       (B) Construction.--Nothing in subparagraph (A) shall be 
     construed as preventing the application of section 1923(f)(4) 
     of the Social Security Act (as amended by subsection (a)) to 
     the District of Columbia for fiscal year 2003 and subsequent 
     fiscal years.

[[Page S5866]]

       (3) Effective date.--The amendments made by this subsection 
     shall apply to DSH allotments for fiscal years beginning with 
     fiscal year 2003.
       (b) Increase in Floor for Treatment As an Extremely Low DSH 
     State to 3 Percent in Fiscal Year 2003.--
       (1) Increase in dsh floor.--Section 1923(f)(5) of the 
     Social Security Act (42 U.S.C. 1396r-4(f)(5)) is amended--
       (A) by striking ``fiscal year 1999'' and inserting ``fiscal 
     year 2001'';
       (B) by striking ``August 31, 2000'' and inserting ``August 
     31, 2002'';
       (C) by striking ``1 percent'' each place it appears and 
     inserting ``3 percent''; and
       (D) by striking ``fiscal year 2001'' and inserting ``fiscal 
     year 2003''.
       (2) Effective date.--The amendments made by paragraph (1) 
     take effect as if enacted on October 1, 2002, and apply to 
     DSH allotments under title XIX of the Social Security Act for 
     fiscal year 2003 and each fiscal year thereafter.

     SEC. 204. INCREASED STATE ACCESS TO UNSPENT SCHIP FUNDS.

       (a) Retained and Redistributed Allotments for Fiscal Years 
     1998 and 1999.--Paragraphs (2)(A)(i) and (2)(A)(ii) of 
     section 2104(g) of the Social Security Act (42 U.S.C. 
     1397dd(g)) are each amended by striking ``fiscal year 2002'' 
     and inserting ``fiscal year 2004''.
       (b) Extension and Revision of Retained and Redistributed 
     Allotments for Fiscal Year 2000.--
       (1) Permitting and extending retention of portion of fiscal 
     year 2000 allotment.--Paragraph (2) of such section 2104(g) 
     is amended--
       (A) in the heading, by striking ``and 1999'' and inserting 
     ``through 2000''; and
       (B) by adding at the end of subparagraph (A) the following:
       ``(iii) Fiscal year 2000 allotment.--Of the amounts 
     allotted to a State pursuant to this section for fiscal year 
     2000 that were not expended by the State by the end of fiscal 
     year 2002, 50 percent of that amount shall remain available 
     for expenditure by the State through the end of fiscal year 
     2004.''.
       (2) Redistributed allotments.--Paragraph (1) of such 
     section 2104(g) is amended--
       (A) in subparagraph (A), by inserting ``or for fiscal year 
     2000 by the end of fiscal year 2002,'' after ``fiscal year 
     2001,'';
       (B) in subparagraph (A), by striking ``1998 or 1999'' and 
     inserting ``1998, 1999, or 2000'';
       (C) in subparagraph (A)(i)--
       (i) by striking ``or'' at the end of subclause (I),
       (ii) by striking the period at the end of subclause (II) 
     and inserting ``; or''; and
       (iii) by adding at the end the following new subclause:

       ``(III) the fiscal year 2000 allotment, the amount 
     specified in subparagraph (C)(i) (less the total of the 
     amounts under clause (ii) for such fiscal year), multiplied 
     by the ratio of the amount specified in subparagraph (C)(ii) 
     for the State to the amount specified in subparagraph 
     (C)(iii).'';

       (D) in subparagraph (A)(ii), by striking ``or 1999'' and 
     inserting ``, 1999, or 2000'';
       (E) in subparagraph (B), by striking ``with respect to 
     fiscal year 1998 or 1999'';
       (F) in subparagraph (B)(ii)--
       (i) by inserting ``with respect to fiscal year 1998, 1999, 
     or 2000,'' after ``subsection (e),''; and
       (ii) by striking ``2002'' and inserting ``2004''; and
       (G) by adding at the end the following new subparagraph:
       ``(C) Amounts used in computing redistributions for fiscal 
     year 2000.--For purposes of subparagraph (A)(i)(III)--
       ``(i) the amount specified in this clause is the amount 
     specified in paragraph (2)(B)(i)(I) for fiscal year 2000, 
     less the total amount remaining available pursuant to 
     paragraph (2)(A)(iii);
       ``(ii) the amount specified in this clause for a State is 
     the amount by which the State's expenditures under this title 
     in fiscal years 2000, 2001, and 2002 exceed the State's 
     allotment for fiscal year 2000 under subsection (b); and
       ``(iii) the amount specified in this clause is the sum, for 
     all States entitled to a redistribution under subparagraph 
     (A) from the allotments for fiscal year 2000, of the amounts 
     specified in clause (ii).''.
       (3) Conforming amendments.--Such section 2104(g) is further 
     amended--
       (A) in its heading, by striking ``and 1999'' and inserting 
     ``, 1999, and 2000''; and
       (B) in paragraph (3)--
       (i) by striking ``or fiscal year 1999'' and inserting ``, 
     fiscal year 1999, or fiscal year 2000''; and
       (ii) by striking ``or November 30, 2001'' and inserting 
     ``November 30, 2001, or November 30, 2002'', respectively.
       (c) Extension and Revision of Retained and Redistributed 
     Allotments for Fiscal Year 2001.--
       (1) Permitting and extending retention of portion of fiscal 
     year 2001 allotment.--Paragraph (2) of such section 2104(g), 
     as amended in subsection (b)(1)(B), is further amended--
       (A) in the heading, by striking ``2000'' and inserting 
     ``2001''; and
       (B) by adding at the end of subparagraph (A) the following:
       ``(iv) Fiscal year 2001 allotment.--Of the amounts allotted 
     to a State pursuant to this section for fiscal year 2001 that 
     were not expended by the State by the end of fiscal year 
     2003, 50 percent of that amount shall remain available for 
     expenditure by the State through the end of fiscal year 
     2005.''.
       (2) Redistributed allotments.--Paragraph (1) of such 
     section 2104(g), as amended in subsection (b)(2), is further 
     amended--
       (A) in subparagraph (A), by inserting ``or for fiscal year 
     2001 by the end of fiscal year 2003,'' after ``fiscal year 
     2002,'';
       (B) in subparagraph (A), by striking ``1999, or 2000'' and 
     inserting ``1999, 2000, or 2001'';
       (C) in subparagraph (A)(i)--
       (i) by striking ``or'' at the end of subclause (II),
       (ii) by striking the period at the end of subclause (III) 
     and inserting ``; or''; and
       (iii) by adding at the end the following new subclause:

       ``(IV) the fiscal year 2001 allotment, the amount specified 
     in subparagraph (D)(i) (less the total of the amounts under 
     clause (ii) for such fiscal year), multiplied by the ratio of 
     the amount specified in subparagraph (D)(ii) for the State to 
     the amount specified in subparagraph (D)(iii).'';

       (D) in subparagraph (A)(ii), by striking ``or 2000'' and 
     inserting ``2000, or 2001'';
       (E) in subparagraph (B)--
       (i) by striking ``and'' at the end of clause (ii);
       (ii) by redesignating clause (iii) as clause (iv); and
       (iii) by inserting after clause (ii) the following new 
     clause:
       ``(iii) notwithstanding subsection (e), with respect to 
     fiscal year 2001, shall remain available for expenditure by 
     the State through the end of fiscal year 2005; and''; and
       (F) by adding at the end the following new subparagraph:
       ``(D) Amounts used in computing redistributions for fiscal 
     year 2001.--For purposes of subparagraph (A)(i)(IV)--
       ``(i) the amount specified in this clause is the amount 
     specified in paragraph (2)(B)(i)(I) for fiscal year 2001, 
     less the total amount remaining available pursuant to 
     paragraph (2)(A)(iv);
       ``(ii) the amount specified in this clause for a State is 
     the amount by which the State's expenditures under this title 
     in fiscal years 2001, 2002, and 2003 exceed the State's 
     allotment for fiscal year 2001 under subsection (b); and
       ``(iii) the amount specified in this clause is the sum, for 
     all States entitled to a redistribution under subparagraph 
     (A) from the allotments for fiscal year 2001, of the amounts 
     specified in clause (ii).''.
       (3) Conforming amendments.--Such section 2104(g) is further 
     amended--
       (A) in its heading, by striking ``and 2000'' and inserting 
     ``2000, and 2001''; and
       (B) in paragraph (3)--
       (i) by striking ``or fiscal year 2000'' and inserting 
     ``fiscal year 2000, or fiscal year 2001''; and
       (ii) by striking ``or November 30, 2002,'' and inserting 
     ``November 30, 2002, or November 30, 2003,'', respectively.
       (d) Authority for Qualifying States To Use Portion of 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 allotments for fiscal years 1998, 1999, 
     2000, 2001, for fiscal years in which such allotments are 
     available under subsections (e) and (g) of section 2104, a 
     qualifying State (as defined in paragraph (2)) may elect to 
     use not more than 20 percent of 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 150 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

[[Page S5867]]

       ``(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 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).''.
       (e) Effective Date.--Subsections (a) through (c), and the 
     amendments made by such subsections, shall be effective as if 
     this section had been enacted on September 30, 2002, and 
     amounts under title XXI of the Social Security Act (42 U.S.C. 
     1397aa et seq.) from allotments for fiscal years 1998 through 
     2000 are available for expenditure on and after October 1, 
     2002, under the amendments made by such subsections as if 
     this section had been enacted on September 30, 2002.

     SEC. 205. FEDERAL RESPONSIBILITY FOR EMERGENCY CARE FOR 
                   ILLEGAL IMMIGRANTS.

       (a) In General.--Section 1903(a)(3) of the Social Security 
     Act (42 U.S.C. 1396b(a)(3)) is amended--
       (1) in subparagraph (D), by striking ``plus'' at the end 
     and inserting ``and''; and
       (2) by adding at the end the following:
       ``(E) 100 percent of the sums expended with respect to 
     costs incurred during such quarter as are attributable to the 
     provision of care and services that are furnished to an alien 
     described in subsection (v)(1) that are necessary for the 
     treatment of an emergency medical condition, as defined in 
     subsection (v)(3); and''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on July 1, 2003.

     SEC. 206. INCREASED FEDERAL RESPONSIBILITY FOR TRANSLATION 
                   SERVICES.

       (a) In General.--Section 1903(a)(3) of the Social Security 
     Act (42 U.S.C. 1396b(a)(3)), as amended by section 205(a), is 
     amended by adding at the end the following:
       ``(F) 90 percent of the sums expended with respect to costs 
     incurred during such quarter as are attributable to the 
     provision of language services, including oral 
     interpretation, translations of written materials, and other 
     language services, for individuals with limited English 
     proficiency who apply for, or receive, medical assistance 
     under the State plan; and''.
       (b) SCHIP.--Section 2105(A)(1) of the Social Security Act 
     (42 U.S.C.1397ee(a)(1)) is amended--
       (1) in the matter preceding subparagraph (A), by striking 
     ``section 1905(b))'' and inserting ``section 1905(b)) or, in 
     the case of expenditures described in subparagraph (D)(iv), 
     90 percent''; and
       (2) in subparagraph (D)--
       (A) in clause (iii), by striking ``and'' at the end;
       (B) by redesignating clause (iv) as clause (v); and
       (C) by inserting after clause (iii) the following:
       ``(D) for expenditures attributable to the provision of 
     language services, including oral interpretation, 
     translations of written materials, and other language 
     services, for individuals with limited English proficiency 
     who apply for, or receive, child health assistance under the 
     plan; and''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2003.

     SEC. 207. INCREASED FEDERAL MATCHING RATES FOR CERTAIN 
                   SERVICES.

       (a) Outstationed Workers.--Section 1903(a)(3) of the Social 
     Security Act (42 U.S.C. 1396b(a)(3)), as amended by sections 
     205(a) and 206(a), is amended by adding at the end the 
     following:
       ``(G) 90 percent of the sums expended with respect to costs 
     incurred during such quarter as are attributable to providing 
     for the receipt and initial processing of applications of 
     children and pregnant women for medical assistance consistent 
     with the requirements of section 1902(a)(55); plus''.
       (b) 100 Percent Matching Rate for Urban Indian Health 
     Services.--The third sentence of section 1905(b) of the 
     Social Security Act (42 U.S.C. 1396d(b)) is amended--
       (1) by inserting ``or program'' after ``facility'';
       (2) by striking ``or by'' and inserting ``, by''; and
       (3) by inserting ``, or by an urban Indian organization 
     pursuant to a grant or contract with the Indian Health 
     Service under title V of the Indian Health Care Improvement 
     Act'' before the period.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2003.

 TITLE III--STRENGTHENING STATE AND FEDERAL COMMITMENT TO THE ELDERLY 
         AND PERSONS WITH DISABILITIES; FAMILY OPPORTUNITY ACT

           Subtitle A--Elderly and Persons with Disabilities

     SEC. 301. FULL ACCOUNTING OF SAVINGS IN DETERMINING COST-
                   EFFECTIVENESS.

       (a) In General.--Section 1915(c)(2)(D) of the Social 
     Security Act (42 U.S.C. 1396n(c)(2)(D)) is amended by 
     inserting ``(reduced by average per capita reductions in 
     spending under other Federal mandatory spending programs 
     resulting from operation of the waiver)'' after ``with 
     respect to such individuals''.
       (b) Effective Date.--The amendment made by subsection shall 
     take effect on the date of the enactment of this Act.

     SEC. 302. EXTENSION OF MEDICAID COVERAGE UNDER THE TICKET TO 
                   WORK PROGRAM TO COVER SPOUSES.

       (a) In General.--Section 1902(a)(10)(A)(ii) of the Social 
     Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--
       (1) in clause (i)(II), by inserting before the comma at the 
     end the following: ``, and at the option of a State, any 
     individual who is the spouse of such an individual'';
       (2) in clause (ii)(XIII), by inserting before the semicolon 
     at the end the following: ``, and at the option of a State, 
     any individual who is the spouse of such an individual'';
       (3) in subclause (XV), by inserting before the semicolon at 
     the end the following: ``, and at the option of a State, any 
     individual who is the spouse of such an individual''; and
       (4) in subclause (XVI), by inserting before the semicolon 
     at the end the following: ``, and at the option of a State, 
     any individual who is the spouse of such an individual''.
       (b) Conforming Amendment.--Section 1905(a)(xii) of such Act 
     (42 U.S.C. 1396d(a)(xii)) is amended by inserting ``and 
     spouses described in clauses (i)(II), (ii)(XIII), (ii)(XV), 
     and (ii)(XVI) of section 1902(a)(10)(A)'' after ``subsection 
     (v))''.
       (c) Effective Date.--The amendments made by this section 
     take effect on October 1, 2003, whether or not regulations 
     implementing such amendments have been issued.

     SEC. 303. ENCOURAGING TRANSITION TO HOME AND COMMUNITY CARE.

       (a) In General.--Section 1905(b) of the Social Security Act 
     (42 U.S.C. 1396d(b)), as amended by section 101(a), is 
     amended--
       (1) by striking ``and'' before ``(5)''; and
       (2) by inserting before the period the following: ``, and 
     (6) the Federal medical assistance percentage shall be equal 
     to the enhanced FMAP described in section 2105(b) with 
     respect to medical assistance provided under a waiver under 
     section 1915(c)''.
       (b) Conforming Amendment.--Section 1915(c) of such Act (42 
     U.S.C. 1396n(c)) is amended by adding at the end the 
     following new paragraph:
       ``(11) For purposes of determining the amount of 
     expenditures under this section or a State plan for purposes 
     of applying any test of cost-effectiveness or similar test in 
     carrying out this subsection, the provisions of section 
     1905(b)(6) shall not be taken into account.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to medical assistance for items and services 
     furnished on or after July 1, 2003, regardless of whether the 
     waiver under which such assistance is provided was approved 
     before, on, or after the date of the enactment of this Act.

     SEC. 304. ENHANCED MATCHING RATE FOR DISABLED INDIVIDUALS 
                   AWAITING MEDICARE ELIGIBILITY.

       (a) In General.--Section 1905(b) of the Social Security Act 
     (42 U.S.C. 1396d(b)), as

[[Page S5868]]

     amended by sections 101(a) and 303(a), is amended--
       (1) by striking ``and'' before ``(6)''; and
       (2) by inserting before the period the following: ``, and 
     (7) the Federal medical assistance percentage shall be equal 
     to 100 percent with respect to medical assistance provided to 
     individuals who are not entitled to benefits under part A of 
     title XVIII pursuant to section 226(b) but who would be 
     entitled to such benefits pursuant to such section but for 
     the application of a 24-month waiting period under such 
     section''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to medical assistance for items and services 
     furnished on or after October 1, 2003.

     SEC. 305. PROVIDING INITIAL TERM OF 5 YEARS FOR SECTION 1915 
                   WAIVERS.

       (a) In General.--Subsections (d)(3) and (e)(3) of section 
     1915 of the Social Security Act (42 U.S.C. 1396n) are each 
     amended by striking ``3 years'' and inserting ``5 years''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to waivers granted on or after the date of the 
     enactment of this Act.

     SEC. 306. OPTIONAL COVERAGE OF COMMUNITY-BASED ATTENDANT 
                   SERVICES AND SUPPORTS UNDER THE MEDICAID 
                   PROGRAM.

       (a) Optional Coverage.--Section 1902(a)(10)(D) of the 
     Social Security Act (42 U.S.C. 1396a(a)(10)(D)) is amended--
       (1) by inserting ``(i)'' after `(D)'';
       (2) by adding ``and'' after the semicolon; and
       (3) by adding at the end the following new clause:
       ``(ii) at the option of the State and subject to section 
     1935, for the inclusion of community-based attendant services 
     and supports for any individual who--
       ``(I) is eligible for medical assistance under the State 
     plan;
       ``(II) with respect to whom there has been a determination 
     that the individual requires the level of care provided in a 
     nursing facility or an intermediate care facility for the 
     mentally retarded (whether or not coverage of such 
     intermediate care facility is provided under the State plan); 
     and
       ``(III) who chooses to receive such services and supports;
     insofar as such services are appropriate for the individual's 
     condition according to the individual's plan of care;''.
       (b) Community-Based Attendant Services and Supports 
     Option.--
       (1) In general.--Title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) is amended--
       (A) by redesignating section 1935 as section 1936; and
       (B) by inserting after section 1934 the following:


           ``community-based attendant services and supports

       ``Sec. 1935. (a) Coverage.--
       ``(1) In general.--A State may provide through a plan 
     amendment for the inclusion of community-based attendant 
     services and supports (as defined in subsection (g)(1)) for 
     individuals described in section 1902(a)(10)(D)(ii) in 
     accordance with this section.
       ``(2) Enhanced FMAP for Coverage.--Notwithstanding section 
     1905(b), in the case of a State with an approved plan 
     amendment under this section during that period that also 
     satisfies the requirements of subsection (c) the Federal 
     medical assistance percentage shall be equal to the enhanced 
     FMAP described in section 2105(b) with respect to medical 
     assistance in the form of community-based attendant services 
     and supports provided to individuals described in section 
     1902(a)(10)(D)(ii) in accordance with this section.
       ``(b) Development and Implementation of Benefit.--In order 
     for a State plan amendment to be approved under this section, 
     a State shall develop and implement the proposal through a 
     public process which includes individuals with disabilities, 
     elderly individuals, their representatives, and providers, 
     and include in that proposed plan amendment--
       ``(1) a State process to notify and inform individuals 
     (including individuals who live in nursing facilities, 
     individuals who live in intermediate care facilities for the 
     mentally retarded, and individuals who live in the community 
     and who have an unmet need for such services) of the 
     availability of such services and supports under the this 
     title, and of other items and services that may be provided 
     to the individual under this title or title XVIII; and
       ``(2) a quality assurance program that will maximize 
     consumer independence and consumer control and will --
       ``(A) train consumers to appropriately manage their own 
     attendant;
       ``(B) provide a quality review process; and
       ``(C) provide for investigation and resolution of 
     allegations of neglect, abuse, or exploitation in connection 
     with the provision of such services and supports.
       ``(c) No Effect on Ability To Provide Coverage Under a 
     Waiver.--
       ``(1) In general.--Nothing in this section shall be 
     construed as affecting the ability of a State to provide 
     coverage under the State plan for community-based attendant 
     services and supports (or similar coverage) under a waiver 
     approved under section 1915, section 1115, or otherwise.
       ``(2) Eligibility for enhanced match.--In the case of a 
     State that provides coverage for such services and supports 
     under a waiver, the State shall not be eligible under section 
     1935 for the enhanced FMAP for the provision of such coverage 
     under this unless the State submits a plan amendment to the 
     Secretary that meets the requirements of this section.
       ``(d) Definitions.--In this title:
       ``(1) Community-based attendant services and supports.--
       ``(A) In general.--The term `community-based attendant 
     services and supports' may include one or more of the 
     following: attendant services and supports furnished to an 
     individual, as needed, to assist in accomplishing activities 
     of daily living, instrumental activities of daily living, and 
     health-related functions through hands-on assistance, 
     supervision, or cueing--
       ``(i) under a plan of services and supports that is based 
     on an assessment of functional need and that is agreed to by 
     the individual or, as appropriate, the individual's 
     representative;
       ``(ii) in a home or community setting, which may include a 
     school, workplace, or recreation or religious facility, but 
     does not include a nursing facility or an intermediate care 
     facility for the mentally retarded;
       ``(iii) under an agency-provider model or other model (as 
     defined in paragraph (2)(C)); and
       ``(iv) the furnishing of which is selected, managed, and 
     dismissed by the individual, or, as appropriate, with 
     assistance from the individual's representative.
       ``(B) Included services and supports.--Such term may 
     include one or more of the following:
       ``(i) Tasks necessary to assist an individual in 
     accomplishing activities of daily living, instrumental 
     activities of daily living, and health-related functions.
       ``(ii) The acquisition, maintenance, and enhancement of 
     skills necessary for the individual to accomplish activities 
     of daily living, instrumental activities of daily living, and 
     health-related functions.
       ``(iii) Backup systems or mechanisms (such as the use of 
     beepers), as defined by the State according to the client's 
     needs, to ensure continuity of services and supports.
       ``(iv) Voluntary training on how to select, manage, and 
     dismiss attendants.
       ``(C) Excluded services and supports.--Subject to 
     subparagraph (D), such term does not include--
       ``(i) the provision of room and board for the individual;
       ``(ii) special education and related services provided 
     under the Individuals with Disabilities Education Act and 
     vocational rehabilitation services provided under the 
     Rehabilitation Act of 1973;
       ``(iii) assistive technology devices and assistive 
     technology services;
       ``(iv) durable medical equipment; or
       ``(v) home modifications.
       ``(D) Flexibility in transition to community-based home 
     setting.--Such term may include expenditures for transitional 
     costs required for an individual to make the transition from 
     a nursing facility or intermediate care facility for the 
     mentally retarded to a community-based home setting where the 
     individual resides.
       ``(E) Clarification of permitting payment of relatives for 
     providing services and supports.--Nothing in this section 
     shall be construed as preventing community-based attendant 
     services and supports from being furnished to an individual 
     by others who are related to that individual and for such 
     others being paid for so furnishing such services and 
     supports.
       ``(2) Additional definitions.--
       ``(A) Activities of daily living.--The term `activities of 
     daily living' includes eating, toileting, grooming, dressing, 
     bathing, and transferring.
       ``(B) Consumer controlled.--The term `consumer controlled' 
     means a method of providing services and supports that allow 
     the individual, or where appropriate, the individual's 
     representative, maximum control of the community-based 
     attendant services and supports, regardless of who acts as 
     the employer of record.
       ``(C) Delivery models.--
       ``(i) Agency-provider model.--The term `agency-provider 
     model' means, with respect to the provision of community-
     based attendant services and supports for an individual, a 
     method of providing consumer controlled services and supports 
     under which entities contract for the provision of such 
     services and supports.
       ``(ii) Other models.--The term `other models' means 
     methods, other than an agency-provider model, for the 
     provision of consumer controlled services and supports. Such 
     models may include direct cash payments or use of a fiscal 
     agent to assist in obtaining services.
       ``(D) Health-related functions.--The term `health-related 
     functions' means functions that can be delegated or assigned 
     by licensed health-care professionals under State law to be 
     performed by an attendant.
       ``(E) Instrumental activities of daily living.--The term 
     `instrumental activities of daily living' includes meal 
     planning and preparation, managing finances, shopping for 
     food, clothing, and other essential items, performing 
     essential household chores, communicating by phone and other 
     media, and other activities needed to participate in the 
     community, as appropriate.
       ``(F) Individual's representative.--The term `individual's 
     representative' means a parent, a family member, a guardian, 
     an advocate, or an authorized representative of an 
     individual.''.

[[Page S5869]]

       (c) Investigation by State .--Section 1903(q)(4)(A)(i) of 
     such Act (42 U.S.C. 1396b(q)(4)(A)(i)) is amended by 
     inserting ``and for investigation and resolution of 
     allegations of neglect, abuse, or exploitation in connection 
     with the provision of community-based attendant services and 
     supports under section 1935(b)(2)(C)'' before the semicolon.
       (d) Effective Date.--The amendments made by this section 
     take effect on October 1, 2003, and apply to medical 
     assistance provided for community-based attendant services 
     and supports described in section 1935 of the Social Security 
     Act furnished on or after that date.

                   Subtitle B--Family Opportunity Act

     SEC. 311. SHORT TITLE.

       This subtitle may be cited as the ``Family Opportunity Act 
     of 2003'' or the ``Dylan Lee James Act''.

     SEC. 312. OPPORTUNITY FOR FAMILIES OF DISABLED CHILDREN TO 
                   PURCHASE MEDICAID COVERAGE FOR SUCH CHILDREN.

       (a) State Option To Allow Families of Disabled Children To 
     Purchase Medicaid Coverage for Such Children.--
       (1) In general.--Section 1902 (42 U.S.C. 1396a) is 
     amended--
       (A) in subsection (a)(10)(A)(ii)--
       (i) by striking ``or'' at the end of subclause (XVII);
       (ii) by adding ``or'' at the end of subclause (XVIII); and
       (iii) by adding at the end the following new subclause:

       ``(XIX) who are disabled children described in subsection 
     (cc)(1);''; and

       (B) by adding at the end the following new subsection:
       ``(cc)(1) Individuals described in this paragraph are 
     individuals--
       ``(A) who have not attained 18 years of age;
       ``(B) who would be considered disabled under section 
     1614(a)(3)(C) (determined without regard to the reference to 
     age in that section) but for having earnings or deemed income 
     or resources (as determined under title XVI for children) 
     that exceed the requirements for receipt of supplemental 
     security income benefits; and
       ``(C) whose family income does not exceed such income level 
     as the State establishes and does not exceed--
       ``(i) 300 percent of the income official poverty line (as 
     defined by the Office of Management and Budget, and revised 
     annually in accordance with section 673(2) of the Omnibus 
     Budget Reconciliation Act of 1981) applicable to a family of 
     the size involved; or
       ``(ii) such higher percent of such poverty line as a State 
     may establish, except that no Federal financial participation 
     shall be provided under section 1903(a) for any medical 
     assistance provided to an individual who would not be 
     described in this subsection but for this clause.''.
       (2) Interaction with employer-sponsored family coverage.--
     Section 1902(cc) (42 U.S.C. 1396a(cc)), as added by paragraph 
     (1), is amended by adding at the end the following new 
     paragraph:
       ``(2)(A) If an employer of a parent of an individual 
     described in paragraph (1) offers family coverage under a 
     group health plan (as defined in section 2791(a) of the 
     Public Health Service Act), the State may--
       ``(i) require such parent to apply for, enroll in, and pay 
     premiums for, such coverage as a condition of such parent's 
     child being or remaining eligible for medical assistance 
     under subsection (a)(10)(A)(ii)(XIX) if the parent is 
     determined eligible for such coverage and the employer 
     contributes at least 50 percent of the total cost of annual 
     premiums for such coverage; and
       ``(ii) if such coverage is obtained--
       ``(I) subject to paragraph (2) of section 1916(h), reduce 
     the premium imposed by the State under that section (if any) 
     in an amount that reasonably reflects the premium 
     contribution made by the parent for private coverage on 
     behalf of a child with a disability; and
       ``(II) treat such coverage as a third party liability under 
     subsection (a)(25).
       ``(B) In the case of a parent to which subparagraph (A) 
     applies, if the family income of such parent does not exceed 
     300 percent of the income official poverty line (referred to 
     in paragraph (1)(C)(i)), a State may provide for payment of 
     any portion of the annual premium for such family coverage 
     that the parent is required to pay. Any payments made by the 
     State under this subparagraph shall be considered, for 
     purposes of section 1903(a), to be payments for medical 
     assistance.''.
       (b) State Option To Impose Income-Related Premiums.--
     Section 1916 (42 U.S.C. 1396o) is amended--
       (1) in subsection (a), by striking ``subsection (g)'' and 
     inserting ``subsections (g) and (h)''; and
       (2) by adding at the end the following new subsection:
       ``(h)(1) With respect to disabled children provided medical 
     assistance under section 1902(a)(10)(A)(ii)(XIX), subject to 
     paragraph (2), a State may (in a uniform manner for such 
     children) require the families of such children to pay 
     monthly premiums set on a sliding scale based on family 
     income.
       ``(2) A premium requirement imposed under paragraph (1) may 
     only apply to the extent that--
       ``(A) the aggregate amount of such premium and any premium 
     that the parent is required to pay for family coverage under 
     section 1902(cc)(2)(A)(i) does not exceed 5 percent of the 
     family's income; and
       ``(B) the requirement is imposed consistent with section 
     1902(cc)(2)(A)(ii)(I).
       ``(3) A State shall not require prepayment of a premium 
     imposed pursuant to paragraph (1) and shall not terminate 
     eligibility of a child under section 1902(a)(10)(A)(ii)(XIX) 
     for medical assistance under this title on the basis of 
     failure to pay any such premium until such failure continues 
     for a period of not less than 60 days from the date on which 
     the premium became past due. The State may waive payment of 
     any such premium in any case where the State determines that 
     requiring such payment would create an undue hardship.''.
       (c) Conforming Amendment.--Section 1903(f)(4) (42 U.S.C. 
     1396b(f)(4)) is amended in the matter preceding subparagraph 
     (A) by inserting ``1902(a)(10)(A)(ii)(XIX),'' after 
     ``1902(a)(10)(A)(ii)(XVIII),''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to medical assistance for items and services 
     furnished on or after January 1, 2004.

     SEC. 313. TREATMENT OF INPATIENT PSYCHIATRIC HOSPITAL 
                   SERVICES FOR INDIVIDUALS UNDER AGE 21 IN HOME 
                   OR COMMUNITY-BASED SERVICES WAIVERS.

       (a) In General.--Section 1915(c) (42 U.S.C. 1396n(c)) is 
     amended--
       (1) in paragraph (1)--
       (A) in the first sentence, by inserting ``, or inpatient 
     psychiatric hospital services for individuals under age 21,'' 
     after ``intermediate care facility for the mentally 
     retarded''; and
       (B) in the second sentence, by inserting ``, or inpatient 
     psychiatric hospital services for individuals under age 21'' 
     before the period;
       (2) in paragraph (2)(B), by striking ``or services in an 
     intermediate care facility for the mentally retarded'' each 
     place it appears and inserting ``, services in an 
     intermediate care facility for the mentally retarded, or 
     inpatient psychiatric hospital services for individuals under 
     age 21'';
       (3) by striking paragraph (2)(C) and inserting the 
     following:
       ``(C) such individuals who are determined to be likely to 
     require the level of care provided in a hospital, nursing 
     facility, or intermediate care facility for the mentally 
     retarded, or inpatient psychiatric hospital services for 
     individuals under age 21, are informed of the feasible 
     alternatives, if available under the waiver, at the choice of 
     such individuals, to the provision of inpatient hospital 
     services, nursing facility services, services in an 
     intermediate care facility for the mentally retarded, or 
     inpatient psychiatric hospital services for individuals under 
     age 21;''; and
       (4) in paragraph (7)(A)--
       (A) by inserting ``, or inpatient psychiatric hospital 
     services for individuals under age 21,'' after ``intermediate 
     care facility for the mentally retarded''; and
       (B) by inserting ``, or who would require inpatient 
     psychiatric hospital services for individuals under age 21'' 
     before the period.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply with respect to medical assistance provided on or after 
     January 1, 2003.

     SEC. 314. DEMONSTRATION OF COVERAGE UNDER THE MEDICAID 
                   PROGRAM OF CHILDREN WITH POTENTIALLY SEVERE 
                   DISABILITIES.

       (a) State Application.--A State may apply to the Secretary 
     of Health and Human Services (in this section referred to as 
     the ``Secretary'') for approval of a demonstration project 
     (in this section referred to as a ``demonstration project'') 
     under which up to a specified maximum number of children with 
     a potentially severe disability (as defined in subsection 
     (b)) are provided medical assistance under the State medicaid 
     plan under title XIX of the Social Security Act (42 U.S.C. 
     1396 et seq.).
       (b) Child With a Potentially Severe Disability Defined.--
       (1) In general.--In this section, the term ``child with a 
     potentially severe disability'' means, with respect to a 
     demonstration project, an individual who--
       (A) has not attained 21 years of age;
       (B) has a physical or mental condition, disease, disorder 
     (including a congenital birth defect or a metabolic 
     condition), injury, or developmental disability that was 
     incurred before the individual attained such age; and
       (C) is reasonably expected, but for the receipt of medical 
     assistance under the State medicaid plan, to reach the level 
     of disability defined under section 1614(a)(3) of the Social 
     Security Act (42 U.S.C. 1382c(a)(3)), (determined without 
     regard to the reference to age in subparagraph (C) of that 
     section).
       (2) Exception.--Such term does not include an individual 
     who would be considered disabled under section 1614(a)(3)(C) 
     of the Social Security Act (42 U.S.C. 1382c(a)(3)(C)) 
     (determined without regard to the reference to age in that 
     section).
       (c) Approval of Demonstration Projects.--
       (1) In general.--Subject to paragraph (3), the Secretary 
     shall approve applications under subsection (a) that meet the 
     requirements of paragraph (2) and such additional terms and 
     conditions as the Secretary may require. The Secretary may 
     waive the requirement of section 1902(a)(1) of the Social 
     Security Act (42 U.S.C. 1396a(a)(1)) to allow for sub-State 
     demonstrations.
       (2) Terms and conditions of demonstration projects.--The 
     Secretary may not approve a demonstration project under this 
     section unless the State provides assurances satisfactory to 
     the Secretary that the following conditions are or will be 
     met:

[[Page S5870]]

       (A) Independent evaluation.--The State provides for an 
     independent evaluation of the project to be conducted during 
     fiscal year 2006.
       (B) Consultation for development of criteria.--The State 
     consults with appropriate pediatric health professionals in 
     establishing the criteria for determining whether a child has 
     a potentially severe disability.
       (C) Annual report.--The State submits an annual report to 
     the Secretary (in a uniform form and manner established by 
     the Secretary) on the use of funds provided under the grant 
     that includes the following:
       (i) Enrollment and financial statistics on--

       (I) the total number of children with a potentially severe 
     disability enrolled in the demonstration project, 
     disaggregated by disability;
       (II) the services provided by category or code and the cost 
     of each service so categorized or coded; and
       (III) the number of children enrolled in the demonstration 
     project who also receive services through private insurance.

       (ii) With respect to the report submitted for fiscal year 
     2006, the results of the independent evaluation conducted 
     under subparagraph (A).
       (iii) Such additional information as the Secretary may 
     require.
       (3) Limitations on federal funding.--
       (A) Appropriation.--
       (i) In general.--Out of any funds in the Treasury not 
     otherwise appropriated, there is appropriated to carry out 
     this section--

       (I) $16,666,000 for each of fiscal years 2002 and 2003; and
       (II) $16,667,000 for each of fiscal years 2004 through 
     2007.

       (ii) Budget authority.--Clause (i) constitutes budget 
     authority in advance of appropriations Acts and represents 
     the obligation of the Federal Government to provide for the 
     payment of the amounts appropriated under clause (i).
       (B) Limitation on payments.--In no case may--
       (i) the aggregate amount of payments made by the Secretary 
     to States under this section exceed $100,000,000;
       (ii) the aggregate amount of payments made by the Secretary 
     to States for administrative expenses relating to the 
     evaluations and annual reports required under subparagraphs 
     (A) and (C) of paragraph (2) exceed $2,000,000 of such 
     $100,000,000; or
       (iii) payments be provided by the Secretary for a fiscal 
     year after fiscal year 2010.
       (C) Funds allocated to states.--
       (i) In general.--The Secretary shall allocate funds to 
     States based on their applications and the availability of 
     funds. In making such allocations, the Secretary shall ensure 
     an equitable distribution of funds among States with large 
     populations and States with small populations.
       (ii) Availability.--Funds allocated to a State under a 
     grant made under this section for a fiscal year shall remain 
     available until expended.
       (D) Funds not allocated to states.--Funds not allocated to 
     States in the fiscal year for which they are appropriated 
     shall remain available in succeeding fiscal years for 
     allocation by the Secretary using the allocation formula 
     established under this section.
       (E) Payments to states.--The Secretary shall pay to each 
     State with a demonstration project approved under this 
     section, from its allocation under subparagraph (C), an 
     amount for each quarter equal to the Federal medical 
     assistance percentage (as defined in section 1905(b) of the 
     Social Security Act (42 U.S.C. 1395d(b))) of expenditures in 
     the quarter for medical assistance provided to children with 
     a potentially severe disability.
       (d) Recommendation.--Not later than October 1, 2005, the 
     Secretary shall submit a recommendation to the Committee on 
     Commerce of the House of Representatives and the Committee on 
     Finance of the Senate regarding whether the demonstration 
     project established under this section should be continued 
     after fiscal year 2007.
       (e) State Defined.--In this section, the term ``State'' has 
     the meaning given such term for purposes of title XIX of the 
     Social Security Act (42 U.S.C. 1396 et seq.).

     SEC. 315. DEVELOPMENT AND SUPPORT OF FAMILY-TO-FAMILY HEALTH 
                   INFORMATION CENTERS.

       Section 501 (42 U.S.C. 701) is amended by adding at the end 
     the following new subsection:
       ``(c)(1) In addition to amounts appropriated under 
     subsection (a) and retained under section 502(a)(1) for the 
     purpose of carrying out activities described in subsection 
     (a)(2), there is appropriated to the Secretary, out of any 
     money in the Treasury not otherwise appropriated, for the 
     purpose of enabling the Secretary (through grants, contracts, 
     or otherwise) to provide for special projects of regional and 
     national significance for the development and support of 
     family-to-family health information centers described in 
     paragraph (2), $10,000,000 for each of fiscal years 2002 
     through 2007. Funds appropriated under this paragraph shall 
     remain available until expended.
       ``(2) The family-to-family health information centers 
     described in this paragraph are centers that--
       ``(A) assist families of children with disabilities or 
     special health care needs to make informed choices about 
     health care in order to promote good treatment decisions, 
     cost-effectiveness, and improved health outcomes for such 
     children;
       ``(B) provide information regarding the health care needs 
     of, and resources available for, children with disabilities 
     or special health care needs;
       ``(C) identify successful health delivery models for such 
     children;
       ``(D) develop with representatives of health care 
     providers, managed care organizations, health care 
     purchasers, and appropriate State agencies a model for 
     collaboration between families of such children and health 
     professionals;
       ``(E) provide training and guidance regarding caring for 
     such children;
       ``(F) conduct outreach activities to the families of such 
     children, health professionals, schools, and other 
     appropriate entities and individuals; and
       ``(G) are staffed by families of children with disabilities 
     or special health care needs who have expertise in Federal 
     and State public and private health care systems and health 
     professionals.
       ``(3) The provisions of this title that are applicable to 
     the funds made available to the Secretary under section 
     502(a)(1) apply in the same manner to funds made available to 
     the Secretary under paragraph (1).''.

     SEC. 316. RESTORATION OF MEDICAID ELIGIBILITY FOR CERTAIN SSI 
                   BENEFICIARIES.

       (a) In General.--Section 1902(a)(10)(A)(i)(II) (42 U.S.C. 
     1396a(a)(10)(A)(i)(II)) is amended--
       (1) by inserting ``(aa)'' after ``(II)'';
       (2) by striking ``or who are'' and inserting ``, (bb) who 
     are''; and
       (3) by inserting before the comma at the end the following: 
     ``, or (cc) who are under 21 years of age and with respect to 
     whom supplemental security income benefits would be paid 
     under title XVI if subparagraphs (A) and (B) of section 
     1611(c)(7) were applied without regard to the phrase `the 
     first day of the month following' ''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to medical assistance for items and services 
     furnished on or after the first day of the first calendar 
     quarter that begins after the date of enactment of this Act.

 TITLE IV--FACILITATING PROGRAM ADMINISTRATION AND PRESERVING COVERAGE

     SEC. 401. ALLOWING UNIFORM COVERAGE OF ALL LOW INCOME 
                   AMERICANS.

       (a) In General.--Section 1902(a)(10)(A)(ii) of the Social 
     Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--
       (1) by striking ``or'' at the end of subclause (XVII);
       (2) by adding ``or'' at the end of subclause (XVIII); and
       (3) by adding at the end the following the following new 
     subclause:

       ``(XIX) any individual age 21 through 64 whose family 
     income does not exceed 200 percent of the income official 
     poverty line (as defined by the Office of Management and 
     Budget, and revised annually in accordance with section 
     673(2) of the Omnibus Budget Reconciliation Act of 1981) 
     applicable to a family of the size involved;''.

       (b) Conforming Amendments.--
       (1) Section 1905(a) of such Act (42 U.S.C. 1396d(a)) is 
     amended, in the matter before paragraph (1)--
       (A) by striking ``or'' at the end of clause (xii);
       (B) by adding ``or'' at the end of clause (xiii); and
       (C) by inserting after clause (xiii) the following new 
     clause:
       ``(xii) individuals described in section 
     1902(a)(10)(A)(ii)(XIX),''.
       (2) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)) 
     is amended by inserting ``1902(a)(10)(A)(ii)(XIX),'' after 
     ``1902(a)(10)(A)(ii)(XVIII),''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on October 1, 2003.

     SEC. 402. FACILITATING COVERAGE OF FAMILIES.

       (a) In General.--Section 1905(b) of the Social Security Act 
     (42 U.S.C. 1396d(b)), as amended by sections 101(a), 303(a), 
     and 304(a), is amended--
       (1) by striking ``and'' before ``(7)''; and
       (2) by inserting before the period the following: ``, and 
     (8) the Federal medical assistance percentage shall be equal 
     to the enhanced FMAP described in section 2105(b) with 
     respect to medical assistance provided for individuals who 
     are covered under section 1925 or section 1931 by virtue of 
     being a parent or other caretaker relative (as defined for 
     purposes of such section) of a child and whose income does 
     not exceed the percentage of the income official poverty line 
     applicable under section 1902(l)(2)(C) to children who are 
     eligible for medical assistance under section 
     1902(l)(1)(D)''.
       (b) Construction.--Nothing in section 1905(b)(8) of the 
     Social Security Act, as added by subsection (a)(2), shall be 
     construed as preventing a State from providing medicaid 
     benefits for individuals whose income exceeds 100 percent of 
     the Federal poverty line at the regular FMAP.
       (c) Effective Date.--The amendments made by this section 
     shall apply to medical assistance for items and services 
     furnished on or after July 1, 2003.

     SEC. 403. ASSISTANCE WITH COVERAGE OF LEGAL IMMIGRANTS UNDER 
                   THE MEDICAID PROGRAM AND SCHIP.

       (a) Medicaid Program.--Section 1903(v) of the Social 
     Security Act (42 U.S.C. 1396b(v)) is amended--

[[Page S5871]]

       (1) in paragraph (1), by striking ``paragraph (2)'' and 
     inserting ``paragraphs (2) and (4)''; and
       (2) by adding at the end the following new paragraph:
       ``(4)(A) A State may elect (in a plan amendment under this 
     title) to provide medical assistance under this title, 
     notwithstanding sections 401(a), 402(b), 403, and 421 of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996, for aliens who are lawfully residing in the 
     United States (including battered aliens described in section 
     431(c) of such Act) and who are otherwise eligible for such 
     assistance, within either or both of the following 
     eligibility categories:
       ``(i) Pregnant women.--Women during pregnancy (and during 
     the 60-day period beginning on the last day of the 
     pregnancy).
       ``(ii) Children.--Children (as defined under such plan), 
     including optional targeted low-income children described in 
     section 1905(u)(2)(B).
       ``(B) In the case of a State that has elected to provide 
     medical assistance to a category of aliens under subparagraph 
     (A), no debt shall accrue under an affidavit of support 
     against any sponsor of such an alien on the basis of 
     provision of assistance to such category and the cost of such 
     assistance shall not be considered as an unreimbursed 
     cost.''.
       (b) SCHIP.--Section 2107(e)(1) of such Act (42 U.S.C. 
     1397gg(e)(1)) is amended by redesignating subparagraphs (C) 
     and (D) as subparagraph (D) and (E), respectively, and by 
     inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) Section 1903(v)(4) (relating to optional coverage of 
     categories of permanent resident alien children), but only if 
     the State has elected to apply such section to the category 
     of children under title XIX.''.
       (c) Effective Date.--The amendments made by this section 
     take effect on October 1, 2003, and apply to medical 
     assistance and child health assistance furnished on or after 
     such date.

     SEC. 404. FLEXIBILITY IN ELIGIBILITY DETERMINATIONS.

       (a) In General.--Section 1902(e) of the Social Security Act 
     (42 U.S.C. 1396a(e)) is amended by adding at the end the 
     following:
       ``(13)(A) Subject to the requirements of this paragraph, at 
     the option of the State, the plan may provide that financial 
     eligibility requirements for medical assistance are met for 
     an individual under 19 years of age (or such higher age as 
     determined by the State) by using a determination (made 
     within a reasonable period, as found by the State, before its 
     use for this purpose) of the individual's family or household 
     income and resources, notwithstanding any differences in 
     budget unit, disregards, deeming, or other methodology, by a 
     Federal or State agency (or a public or private entity making 
     such determination on behalf of such agency) specified by the 
     plan, provided that such agency has fiscal liabilities or 
     responsibilities affected or potentially affected by such 
     determinations, provided that all information furnished by 
     such agency pursuant to this subparagraph is used solely for 
     purposes of determining eligibility for medical assistance 
     under the State plan approved under this title or for child 
     health assistance under a State plan approved under title 
     XXI.
       ``(B) Any State electing the option under subparagraph (A) 
     shall--
       ``(i) ensure that if an individual is determined under such 
     subparagraph to be not eligible for medical assistance under 
     the State plan approved under this title or for child health 
     assistance under a State plan under title XXI, the State must 
     subsequently determine if such individual is eligible for 
     such assistance using the methodology that would otherwise be 
     applicable in determining eligibility for such an individual; 
     and
       ``(ii) ensure that any information furnished by an agency 
     specified in such subparagraph shall be furnished with 
     reasonable promptness to the agency determining eligibility 
     for medical assistance under the State plan approved under 
     this title or for child health assistance under a State plan 
     approved under Title XXI.
       ``(C) Nothing in subparagraph (A) shall be construed to 
     restrict the ability of an individual under 19 years of age 
     (or such higher age as specified by the State) to apply for 
     medical assistance under a State plan approved under this 
     title or for child health assistance under a State plan 
     approved under title XXI under the methodology that would 
     otherwise be applicable in determining eligibility for such 
     an individual.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     takes effect on October 1, 2003.

  Mr. JOHNSON. Mr. President, I rise today with my colleagues, Senators 
Bingaman, Corzine, Lautenberg, Clinton, Kerry and Dayton, to introduce 
the ``Strengthening Our States Act of 2003.'' I thank my colleagues for 
joining me in introducing this legislation that marks a first step in 
helping States being to deal with the fiscal crisis many are now 
facing.
  These challenging economic times have forced many States to make 
tough decisions. Among areas affected, some States have had to start 
cutting benefits in their Medicaid programs in order to make ends meet. 
The result is less access to care and poorer health for our most 
vulnerable populations including: low-income, minorities and the 
elderly. Many States are also struggling to meet the needs of a growing 
uninsured population which continues to worsen as more people lose 
their jobs.
  So far, my home State of South Dakota has been one of the lucky ones. 
We have not had to cut Medicaid program benefits to date and our fiscal 
health overall looks fairly good. I do not however have unrealistic 
expectations that South Dakota is protected from the current economic 
downturn and recognize that it is only a matter of time before my State 
experiences the burden of our neighbors.
  The Strengthening Our States Act or SOS Act provides several 
strategies to address these issues by increasing coverage to the 
uninsured, providing flexibility in existing State Medicaid program and 
providing States with assistance to avoid cuts to existing Medicaid 
coverage. Our proposal will improve the Medicaid program without 
shifting costs to States as does the Bush Medicaid proposal which block 
grants the program. I find it particularly troubling that in times when 
State governments across the country are being forced to reduce or 
eliminate Medicaid services in order to save money, the Administration 
would propose to limit the Federal Government's long-term 
responsibility for the only kind of health program many Americans can 
afford.
  This bill will provide temporary fiscal relief to States through a 
$30 billion increase in the Federal share of Medicaid payments or FMAP. 
Unlike the block grant program the Administration has proposed, our 
bill is responsive to the immediate State needs for financial support 
and will keep these important programs going. Other important bill 
provisions include assistance with the costs of care of the elderly and 
people with disabilities through 100 percent Federal financing of 
Medicare premiums and cost-sharing for low-income groups. The bill 
provides States with new flexibility in administering Medicaid and will 
increase access to care for many uninsured groups. It will also close 
several loopholes in existing law that prevent the disabled from 
accessing health care services while waiting to qualify for Medicare 
coverage. Finally, it will provide increased access to home and 
community based services for people with disabilities through mandatory 
waivers for this type of care.
  States are at their wits end trying to juggle new health care 
priorities. Between smallpox vaccination requirements, Severe Acute 
Respiratory Syndrome surveillance and increased numbers of uninsured 
individuals, States are in great need of every bit of help we can 
provide. Senator Daschle and other colleagues in the Senate just rolled 
out a tax cut proposal that recognizes the current fiscal situation 
experienced in our States and this will provide important relief during 
these challenging times.
  The Strengthening Our States Act is a first step in supporting our 
states and I hope additional steps will follow. By providing immediate 
Medicaid relief, we can ease some of the burden currently faced by many 
State governments and will hopefully prevent crises from erupting in 
others that are working hard to just keep afloat. I urge the Senate to 
support this important legislation.
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