[Congressional Record Volume 155, Number 15 (Monday, January 26, 2009)]
[Senate]
[Pages S838-S843]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McConnell (for himself, Mr. Kyl, Mr. Vitter, Mr. 
        Chambliss, Mr. Bunning, Mr. Gregg, Mr. Coburn, Mr. Burr, Mr. 
        Isakson, Mr. Graham, Mr. Inhofe, Mr. Cornyn, Mr. Brownback, Mr. 
        Cochran, Mr. Ensign, Mr. Thune, Mr. DeMint, Mr. Bennett, and 
        Mr. Barrasso):
  S. 326. A bill to amend title XXI of the Social Security Act to 
reauthorize the State Children's Health Insurance Program through 
fiscal year 2013, and for other purposes; to the Committee on Finance.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the text 
of the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
placed in the Record, as follows:

                                 S. 326

       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 ``Kids First 
     Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Reauthorization through fiscal year 2013.
Sec. 3. Allotments for the 50 States and the District of Columbia based 
              on expenditures and numbers of low-income children.
Sec. 4. Limitations on matching rates for populations other than low-
              income children or pregnant women covered through a 
              section 1115 waiver.
Sec. 5. Prohibition on new section 1115 waivers for coverage of adults 
              other than pregnant women.
Sec. 6. Standardization of determination of family income for targeted 
              low-income children under title XXI and optional targeted 
              low-income children under title XIX.
Sec. 7. Grants for outreach and enrollment.
Sec. 8. Improved State option for offering premium assistance for 
              coverage of children through private plans under SCHIP 
              and Medicaid.
Sec. 9. Treatment of unborn children.
Sec. 10. 50 percent matching rate for all Medicaid administrative 
              costs.
Sec. 11. Reduction in payments for Medicaid administrative costs to 
              prevent duplication of such payments under TANF.
Sec. 12. Elimination of waiver of certain Medicaid provider tax 
              provisions.
Sec. 13. Elimination of special payments for certain public hospitals.
Sec. 14. Effective date; coordination of funding for fiscal year 2009.

     SEC. 2. REAUTHORIZATION THROUGH FISCAL YEAR 2013.

       (a) Increase in National Allotment.--Section 2104 of the 
     Social Security Act (42 U.S.C. 1397dd(a)) is amended--
       (1) in subsection (a)--
       (A) by striking ``and'' at the end of paragraph (10);

[[Page S839]]

       (B) in paragraph (11)--
       (i) by striking ``each of fiscal years 2008 and 2009'' and 
     inserting ``fiscal year 2008''; and
       (ii) by striking the period at the end and inserting a 
     semicolon; and
       (C) by adding at the end the following new paragraphs:
       ``(12) for fiscal year 2009, $7,780,000,000;
       ``(13) for fiscal year 2010, $8,044,000,000;
       ``(14) for fiscal year 2011, $8,568,000,000;
       ``(15) for fiscal year 2012, $9,032,000,000; and
       ``(16) for fiscal year 2013, $9,505,000,000.''; and
       (2) in subsection (c)(4)(B), by striking ``2009'' and 
     inserting ``2008, $62,000,000 for fiscal year 2009, 
     $64,000,000 for fiscal year 2010, $68,000,000 for fiscal year 
     2011, $72,000,000 for fiscal year 2012, and $75,000,000 for 
     fiscal year 2013''.
       (b) Repeal of Limitation on Availability of Funding for 
     Fiscal Years 2008 and 2009.--Section 201 of the Medicare, 
     Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
     173) is amended--
       (1) in subsection (a), by striking paragraph (2) and 
     redesignating paragraphs (3) and (4), as paragraphs (2) and 
     (3) respectively; and
       (2) in subsection (b), by striking paragraph (2).

     SEC. 3. ALLOTMENTS FOR THE 50 STATES AND THE DISTRICT OF 
                   COLUMBIA BASED ON EXPENDITURES AND NUMBERS OF 
                   LOW-INCOME CHILDREN.

       (a) In General.--Section 2104 of the Social Security Act 
     (42 U.S.C. 1397dd) is amended by adding at the end the 
     following new subsection:
       ``(m) Determination of Allotments for the 50 States and the 
     District of Columbia for Fiscal Years 2009 Through 2013.--
       ``(1) In general.--Notwithstanding the preceding provisions 
     of this subsection and subject to paragraph (3), the 
     Secretary shall allot to each subsection (b) State for each 
     of fiscal years 2009 through 2013, the amount determined for 
     the fiscal year that is equal to the product of--
       ``(A) the amount available for allotment under subsection 
     (a) for the fiscal year, reduced by the amount of allotments 
     made under subsection (c) (determined without regard to 
     paragraph (4) thereof) for the fiscal year; and
       ``(B) the sum of the State allotment factors determined 
     under paragraph (2) with respect to the State and weighted in 
     accordance with subparagraph (B) of that paragraph for the 
     fiscal year.
       ``(2) State allotment factors.--
       ``(A) In general.--For purposes of paragraph (1)(B), the 
     State allotment factors are the following:
       ``(i) The ratio of the projected expenditures for targeted 
     low-income children under the State child health plan and 
     pregnant women under a waiver of such plan for the fiscal 
     year to the sum of such projected expenditures for all States 
     for the fiscal year, multiplied by the applicable percentage 
     weight assigned under subparagraph (B).
       ``(ii) The ratio of the number of low-income children who 
     have not attained age 19 with no health insurance coverage in 
     the State, as determined by the Secretary on the basis of the 
     arithmetic average of the number of such children for the 3 
     most recent Annual Social and Economic Supplements to the 
     Current Population Survey of the Bureau of the Census 
     available before the beginning of the calendar year before 
     such fiscal year begins, to the sum of the number of such 
     children determined for all States for such fiscal year, 
     multiplied by the applicable percentage weight assigned under 
     subparagraph (B).
       ``(iii) The ratio of the projected expenditures for 
     targeted low-income children under the State child health 
     plan and pregnant women under a waiver of such plan for the 
     preceding fiscal year to the sum of such projected 
     expenditures for all States for such preceding fiscal year, 
     multiplied by the applicable percentage weight assigned under 
     subparagraph (B).
       ``(iv) The ratio of the actual expenditures for targeted 
     low-income children under the State child health plan and 
     pregnant women under a waiver of such plan for the second 
     preceding fiscal year to the sum of such actual expenditures 
     for all States for such second preceding fiscal year, 
     multiplied by the applicable percentage weight assigned under 
     subparagraph (B).
       ``(B) Assignment of weights.--For each of fiscal years 2009 
     through 2013, the following percentage weights shall be 
     applied to the ratios determined under subparagraph (A) for 
     each such fiscal year:
       ``(i) 40 percent for the ratio determined under 
     subparagraph (A)(i).
       ``(ii) 5 percent for the ratio determined under 
     subparagraph (A)(ii).
       ``(iii) 50 percent for the ratio determined under 
     subparagraph (A)(iii).
       ``(iv) 5 percent for the ratio determined under 
     subparagraph (A)(iv).
       ``(C) Determination of projected and actual expenditures.--
     For purposes of subparagraph (A):
       ``(i) Projected expenditures.--The projected expenditures 
     described in clauses (i) and (iii) of such subparagraph with 
     respect to a fiscal year shall be determined on the basis of 
     amounts reported by States to the Secretary on the May 15th 
     submission of Form CMS-37 and Form CMS-21B submitted not 
     later than June 30th of the fiscal year preceding such year.
       ``(ii) Actual expenditures.--The actual expenditures 
     described in clause (iv) of such subparagraph with respect to 
     a second preceding fiscal year shall be determined on the 
     basis of amounts reported by States to the Secretary on Form 
     CMS-64 and Form CMS-21 submitted not later than November 30 
     of the preceding fiscal year.''.
       (b) 2-Year Availability of Allotments; Expenditures Counted 
     Against Oldest Allotments.--Section 2104(e) of the Social 
     Security Act (42 U.S.C. 1397dd(e)) is amended to read as 
     follows:
       ``(e) Availability of Amounts Allotted.--
       ``(1) In general.--Except as provided in the succeeding 
     paragraphs of this subsection, amounts allotted to a State 
     pursuant to this section--
       ``(A) for each of fiscal years 1998 through 2008, shall 
     remain available for expenditure by the State through the end 
     of the second succeeding fiscal year; and
       ``(B) for each of fiscal years 2009 through 2013, shall 
     remain available for expenditure by the State only through 
     the end of the fiscal year succeeding the fiscal year for 
     which such amounts are allotted.
       ``(2) Elimination of redistribution of allotments not 
     expended within 3 years.--Notwithstanding subsection (f), 
     amounts allotted to a State under this section for fiscal 
     years beginning with fiscal year 2009 that remain unexpended 
     as of the end of the fiscal year succeeding the fiscal year 
     for which the amounts are allotted shall not be redistributed 
     to other States and shall revert to the Treasury on October 1 
     of the third succeeding fiscal year.
       ``(3) Rule for counting expenditures against fiscal year 
     allotments.--Expenditures under the State child health plan 
     made on or after April 1, 2009, shall be counted against 
     allotments for the earliest fiscal year for which funds are 
     available for expenditure under this subsection.''.
       (c) Conforming Amendments.--
       (1) Section 2104(b)(1) of the Social Security Act (42 
     U.S.C. 1397dd(b)(1)) is amended by striking ``subsection 
     (d)'' and inserting ``the succeeding subsections of this 
     section''.
       (2) Section 2104(f) of such Act (42 U.S.C. 1397dd(f)) is 
     amended by striking ``The'' and inserting ``Subject to 
     subsection (e)(2), the''.

     SEC. 4. LIMITATIONS ON MATCHING RATES FOR POPULATIONS OTHER 
                   THAN LOW-INCOME CHILDREN OR PREGNANT WOMEN 
                   COVERED THROUGH A SECTION 1115 WAIVER.

       (a) Limitation on Payments.--Section 2105(c) of the Social 
     Security Act (42 U.S.C. 1397ee(c)) is amended by adding at 
     the end the following new paragraph:
       ``(8) Limitations on matching rate for populations other 
     than targeted low-income children or pregnant women covered 
     through a section 1115 waiver.--For child health assistance 
     or health benefits coverage furnished in any fiscal year 
     beginning with fiscal year 2010:
       ``(A) FMAP applied to payments for coverage of children or 
     pregnant women covered through a section 1115 waiver enrolled 
     in the state child health plan on the date of enactment of 
     the kids first act and whose gross family income is 
     determined to exceed the income eligibility level specified 
     for a targeted low-income child.--Notwithstanding subsections 
     (b)(1)(B) and (d) of section 2110, in the case of any 
     individual described in subsection (c) of section 105 of the 
     Kids First Act who the State elects to continue to provide 
     child health assistance for under the State child health plan 
     in accordance with the requirements of such subsection, the 
     Federal medical assistance percentage (as determined under 
     section 1905(b) without regard to clause (4) of such section) 
     shall be substituted for the enhanced FMAP under subsection 
     (a)(1) with respect to such assistance.
       ``(B) FMAP applied to payments only for nonpregnant 
     childless adults and parents and caretaker relatives enrolled 
     under a section 1115 waiver on the date of enactment of the 
     kids first act.--The Federal medical assistance percentage 
     (as determined under section 1905(b) without regard to clause 
     (4) of such section) shall be substituted for the enhanced 
     FMAP under subsection (a)(1) with respect to payments for 
     child health assistance or health benefits coverage provided 
     under the State child health plan for any of the following:
       ``(i) Parents or caretaker relatives enrolled under a 
     waiver on the date of enactment of the kids first act.--A 
     nonpregnant parent or a nonpregnant caretaker relative of a 
     targeted low-income child who is enrolled in the State child 
     health plan under a waiver, experimental, pilot, or 
     demonstration project on the date of enactment of the Kids 
     First Act and whose family income does not exceed the income 
     eligibility applied under such waiver with respect to that 
     population on such date.
       ``(ii) Nonpregnant childless adults enrolled under a waiver 
     on such date.--A nonpregnant childless adult enrolled in the 
     State child health plan under a waiver, experimental, pilot, 
     or demonstration project described in section 6102(c)(3) of 
     the Deficit Reduction Act of 2005 (42 U.S.C. 1397gg note) on 
     the date of enactment of the Kids First Act and whose family 
     income does not exceed the income eligibility applied under 
     such waiver with respect to that population on such date.
       ``(iii) No replacement enrollees.--Nothing in clauses (i) 
     or (ii) shall be construed as authorizing a State to provide 
     child health assistance or health benefits coverage under a 
     waiver described in either such clause to a nonpregnant 
     parent or a nonpregnant caretaker relative of a targeted low-
     income

[[Page S840]]

     child, or a nonpregnant childless adult, who is not enrolled 
     under the waiver on the date of enactment of the Kids First 
     Act.
       ``(C) No federal payment for any new nonpregnant adult 
     enrollees or for such enrollees who no longer satisfy income 
     eligibility requirements.--Payment shall not be made under 
     this section for child health assistance or other health 
     benefits coverage provided under the State child health plan 
     or under a waiver under section 1115 for any of the 
     following:
       ``(i) Parents or caretaker relatives under a section 1115 
     waiver approved after the date of enactment of the kids first 
     act.--A nonpregnant parent or a nonpregnant caretaker 
     relative of a targeted low-income child under a waiver, 
     experimental, pilot, or demonstration project that is 
     approved on or after the date of enactment of the Kids First 
     Act.
       ``(ii) Parents, caretaker relatives, and nonpregnant 
     childless adults whose family income exceeds the income 
     eligibility level specified under a section 1115 waiver 
     approved prior to the kids first act.--Any nonpregnant parent 
     or a nonpregnant caretaker relative of a targeted low-income 
     child whose family income exceeds the income eligibility 
     level referred to in subparagraph (B)(i), and any nonpregnant 
     childless adult whose family income exceeds the income 
     eligibility level referred to in subparagraph (B)(ii).
       ``(iii) Nonpregnant childless adults, parents, or caretaker 
     relatives not enrolled under a section 1115 waiver on the 
     date of enactment of the kids first act.--Any nonpregnant 
     parent or a nonpregnant caretaker relative of a targeted low-
     income child who is not enrolled in the State child health 
     plan under a section 1115 waiver, experimental, pilot, or 
     demonstration project referred to in subparagraph (B)(i) on 
     the date of enactment of the Kids First Act, and any 
     nonpregnant childless adult who is not enrolled in the State 
     child health plan under a section 1115 waiver, experimental, 
     pilot, or demonstration project referred to in subparagraph 
     (B)(ii)(I) on such date.
       ``(D) Definition of caretaker relative.--In this 
     subparagraph, the term `caretaker relative' has the meaning 
     given that term for purposes of carrying out section 1931.
       ``(E) Rule of construction.--Nothing in this paragraph 
     shall be construed as implying that payments for coverage of 
     populations for which the Federal medical assistance 
     percentage (as so determined) is to be substituted for the 
     enhanced FMAP under subsection (a)(1) in accordance with this 
     paragraph are to be made from funds other than the allotments 
     determined for a State under section 2104.''.
       (b) Conforming Amendment.--Section 2105(a)(1) of the Social 
     Security Act ( 42 U.S.C. 1397dd(a)(1)) is amended, in the 
     matter preceding subparagraph (A), by inserting ``or 
     subsection (c)(8)'' after ``subparagraph (B)''.

     SEC. 5. PROHIBITION ON NEW SECTION 1115 WAIVERS FOR COVERAGE 
                   OF ADULTS OTHER THAN PREGNANT WOMEN.

       (a) In General.--Section 2107(f) of the Social Security Act 
     (42 U.S.C. 1397gg(f)) is amended--
       (1) by striking ``, the Secretary'' and inserting ``:
       ``(1) The Secretary''; and
       (2) by adding at the end the following new paragraphs:
       ``(2) The Secretary may not approve, extend, renew, or 
     amend a waiver, experimental, pilot, or demonstration project 
     with respect to a State after the date of enactment of the 
     Kids First Act that would allow funds made available under 
     this title to be used to provide child health assistance or 
     other health benefits coverage for any other adult other than 
     a pregnant woman whose family income does not exceed the 
     income eligibility level specified for a targeted low-income 
     child in that State under a waiver or project approved as of 
     such date.
       ``(3) The Secretary may not approve, extend, renew, or 
     amend a waiver, experimental, pilot, or demonstration project 
     with respect to a State after the date of enactment of the 
     Kids First Act that would waive or modify the requirements of 
     section 2105(c)(8).''.
       (b) Clarification of Authority for Coverage of Pregnant 
     Women.--Section 2106 of the Social Security Act (42 U.S.C. 
     1397ff) is amended by adding at the end the following new 
     subsection:
       ``(f) No Authority To Cover Pregnant Women Through State 
     Plan.--For purposes of this title, a State may provide 
     assistance to a pregnant woman under the State child health 
     plan only--
       ``(1) by virtue of a waiver under section 1115; or
       ``(2) through the application of sections 457.10, 
     457.350(b)(2), 457.622(c)(5), and 457.626(a)(3) of title 42, 
     Code of Federal Regulations (as in effect on the date of 
     enactment of the Kids First Act).''.
       (c) Assurance of Notice to Affected Enrollees.--The 
     Secretary of Health and Human Services shall establish 
     procedures to ensure that States provide adequate public 
     notice for parents, caretaker relatives, and nonpregnant 
     childless adults whose eligibility for child health 
     assistance or health benefits coverage under a waiver under 
     section 1115 of the Social Security Act will be terminated as 
     a result of the amendments made by subsection (a), and that 
     States otherwise adhere to regulations of the Secretary 
     relating to procedures for terminating waivers under section 
     1115 of the Social Security Act.

     SEC. 6. STANDARDIZATION OF DETERMINATION OF FAMILY INCOME FOR 
                   TARGETED LOW-INCOME CHILDREN UNDER TITLE XXI 
                   AND OPTIONAL TARGETED LOW-INCOME CHILDREN UNDER 
                   TITLE XIX.

       (a) Eligibility Based on Gross Income.--
       (1) In general.--Section 2110 of the Social Security Act 
     (42 U.S.C. 1397jj) is amended--
       (A) in subsection (b)(1)(A), by inserting ``in accordance 
     with subsection (d)'' after ``State plan''; and
       (B) by adding at the end the following new subsection:
       ``(d) Standardization of Determination of Family Income.--A 
     State shall determine family income for purposes of 
     determining income eligibility for child health assistance or 
     other health benefits coverage under the State child health 
     plan (or under a waiver of such plan under section 1115) 
     solely on the basis of the gross income (as defined by the 
     Secretary) of the family.''.
       (2) Prohibition on waiver of requirements.--Section 2107(f) 
     (42 U.S.C. 1397gg(f)), as amended by section 5(a), is amended 
     by adding at the end the following new paragraph:
       ``(4) The Secretary may not approve a waiver, experimental, 
     pilot, or demonstration project with respect to a State after 
     the date of enactment of the Kids First Act that would waive 
     or modify the requirements of section 2110(d) (relating to 
     determining income eligibility on the basis of gross income) 
     and regulations promulgated to carry out such 
     requirements.''.
       (b) Regulations.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services shall promulgate interim final regulations defining 
     gross income for purposes of section 2110(d) of the Social 
     Security Act, as added by subsection (a).
       (c) Application to Current Enrollees.--The interim final 
     regulations promulgated under subsection (b) shall not be 
     used to determine the income eligibility of any individual 
     enrolled in a State child health plan under title XXI of the 
     Social Security Act on the date of enactment of this Act 
     before the date on which such eligibility of the individual 
     is required to be redetermined under the plan as in effect on 
     such date. In the case of any individual enrolled in such 
     plan on such date who, solely as a result of the application 
     of subsection (d) of section 2110 of the Social Security Act 
     (as added by subsection (a)) and the regulations promulgated 
     under subsection (b), is determined to be ineligible for 
     child health assistance under the State child health plan, a 
     State may elect, subject to substitution of the Federal 
     medical assistance percentage for the enhanced FMAP under 
     section 2105(c)(8)(A) of the Social Security Act (as added by 
     section 4(a)), to continue to provide the individual with 
     such assistance for so long as the individual otherwise would 
     be eligible for such assistance and the individual's family 
     income, if determined under the income and resource standards 
     and methodologies applicable under the State child health 
     plan on September 30, 2008, would not exceed the income 
     eligibility level applicable to the individual under the 
     State child health plan.

     SEC. 7. GRANTS FOR OUTREACH AND ENROLLMENT.

       (a) Grants.--Title XXI of the Social Security Act (42 
     U.S.C. 1397aa et seq.) is amended by adding at the end the 
     following:

     ``SEC. 2111. GRANTS TO IMPROVE OUTREACH AND ENROLLMENT.

       ``(a) Outreach and Enrollment Grants; National Campaign.--
       ``(1) In general.--From the amounts appropriated for a 
     fiscal year under subsection (f), subject to paragraph (2), 
     the Secretary shall award grants to eligible entities to 
     conduct outreach and enrollment efforts that are designed to 
     increase the enrollment and participation of eligible 
     children under this title and title XIX.
       ``(2) 10 percent set aside for national enrollment 
     campaign.--An amount equal to 10 percent of such amounts for 
     the fiscal year shall be used by the Secretary for 
     expenditures during the fiscal year to carry out a national 
     enrollment campaign in accordance with subsection (g).
       ``(b) Award of Grants.--
       ``(1) Priority for awarding.--
       ``(A) In general.--In awarding grants under subsection (a), 
     the Secretary shall give priority to eligible entities that--
       ``(i) propose to target geographic areas with high rates 
     of--

       ``(I) eligible but unenrolled children, including such 
     children who reside in rural areas; or
       ``(II) racial and ethnic minorities and health disparity 
     populations, including those proposals that address cultural 
     and linguistic barriers to enrollment; and

       ``(ii) submit the most demonstrable evidence required under 
     paragraphs (1) and (2) of subsection (c).
       ``(B) 10 percent set aside for outreach to indian 
     children.--An amount equal to 10 percent of the funds 
     appropriated under subsection (f) for a fiscal year shall be 
     used by the Secretary to award grants to Indian Health 
     Service providers and urban Indian organizations receiving 
     funds under title V of the Indian Health Care Improvement Act 
     (25 U.S.C. 1651 et seq.) for outreach to, and enrollment of, 
     children who are Indians.
       ``(2) 2-year availability.--A grant awarded under this 
     section for a fiscal year shall remain available for 
     expenditure through the end of the succeeding fiscal year.

[[Page S841]]

       ``(c) Application.--An eligible entity that desires to 
     receive a grant under subsection (a) shall submit an 
     application to the Secretary in such form and manner, and 
     containing such information, as the Secretary may decide. 
     Such application shall include--
       ``(1) evidence demonstrating that the entity includes 
     members who have access to, and credibility with, ethnic or 
     low-income populations in the communities in which activities 
     funded under the grant are to be conducted;
       ``(2) evidence demonstrating that the entity has the 
     ability to address barriers to enrollment, such as lack of 
     awareness of eligibility, stigma concerns and punitive fears 
     associated with receipt of benefits, and other cultural 
     barriers to applying for and receiving child health 
     assistance or medical assistance;
       ``(3) specific quality or outcomes performance measures to 
     evaluate the effectiveness of activities funded by a grant 
     awarded under this section; and
       ``(4) an assurance that the eligible entity shall--
       ``(A) conduct an assessment of the effectiveness of such 
     activities against the performance measures;
       ``(B) cooperate with the collection and reporting of 
     enrollment data and other information in order for the 
     Secretary to conduct such assessments;
       ``(C) in the case of an eligible entity that is not the 
     State, provide the State with enrollment data and other 
     information as necessary for the State to make necessary 
     projections of eligible children and pregnant women.
       ``(d) Supplement, Not Supplant.--Federal funds awarded 
     under this section shall be used to supplement, not supplant, 
     non-Federal funds that are otherwise available for activities 
     funded under this section.
       ``(e) Definitions.--In this section:
       ``(1) Eligible entity.--The term `eligible entity' means 
     any of the following:
       ``(A) A State with an approved child health plan under this 
     title.
       ``(B) A local government.
       ``(C) An Indian tribe or tribal consortium, a tribal 
     organization, an urban Indian organization receiving funds 
     under title V of the Indian Health Care Improvement Act (25 
     U.S.C. 1651 et seq.), or an Indian Health Service provider.
       ``(D) A Federal health safety net organization.
       ``(E) A State, national, local, or community-based public 
     or nonprofit private organization.
       ``(F) A faith-based organization or consortia, to the 
     extent that a grant awarded to such an entity is consistent 
     with the requirements of section 1955 of the Public Health 
     Service Act (42 U.S.C. 300x-65) relating to a grant award to 
     non-governmental entities.
       ``(G) An elementary or secondary school.
       ``(H) A national, local, or community-based public or 
     nonprofit private organization, including organizations that 
     use community health workers or community-based doula 
     programs.
       ``(2) Federal health safety net organization.--The term 
     `Federal health safety net organization' means--
       ``(A) a federally-qualified health center (as defined in 
     section 1905(l)(2)(B));
       ``(B) a hospital defined as a disproportionate share 
     hospital for purposes of section 1923;
       ``(C) a covered entity described in section 340B(a)(4) of 
     the Public Health Service Act (42 U.S.C. 256b(a)(4)); and
       ``(D) any other entity or consortium that serves children 
     under a federally-funded program, including the special 
     supplemental nutrition program for women, infants, and 
     children (WIC) established under section 17 of the Child 
     Nutrition Act of 1966 (42 U.S.C. 1786), the head start and 
     early head start programs under the Head Start Act (42 U.S.C. 
     9801 et seq.), the school lunch program established under the 
     Richard B. Russell National School Lunch Act, and an 
     elementary or secondary school.
       ``(3) Indians; indian tribe; tribal organization; urban 
     indian organization.--The terms `Indian', `Indian tribe', 
     `tribal organization', and `urban Indian organization' have 
     the meanings given such terms in section 4 of the Indian 
     Health Care Improvement Act (25 U.S.C. 1603).
       ``(4) Community health worker.--The term `community health 
     worker' means an individual who promotes health or nutrition 
     within the community in which the individual resides--
       ``(A) by serving as a liaison between communities and 
     health care agencies;
       ``(B) by providing guidance and social assistance to 
     community residents;
       ``(C) by enhancing community residents' ability to 
     effectively communicate with health care providers;
       ``(D) by providing culturally and linguistically 
     appropriate health or nutrition education;
       ``(E) by advocating for individual and community health or 
     nutrition needs; and
       ``(F) by providing referral and followup services.
       ``(f) Appropriation.--
       ``(1) In general.--There is appropriated, out of any money 
     in the Treasury not otherwise appropriated, for the purpose 
     of awarding grants under this section--
       ``(A) $100,000,000 for each of fiscal years 2009 and 2010;
       ``(B) $75,000,000 for each of fiscal years 2011 and 2012; 
     and
       ``(C) $50,000,000 for fiscal year 2013.
       ``(2) Grants in addition to other amounts paid.--Amounts 
     appropriated and paid under the authority of this section 
     shall be in addition to amounts appropriated under section 
     2104 and paid to States in accordance with section 2105, 
     including with respect to expenditures for outreach 
     activities in accordance with subsections (a)(1)(D)(iii) and 
     (c)(2)(C) of that section.
       ``(g) National Enrollment Campaign.--From the amounts made 
     available under subsection (a)(2) for a fiscal year, the 
     Secretary shall develop and implement a national enrollment 
     campaign to improve the enrollment of underserved child 
     populations in the programs established under this title and 
     title XIX. Such campaign may include--
       ``(1) the establishment of partnerships with the Secretary 
     of Education and the Secretary of Agriculture to develop 
     national campaigns to link the eligibility and enrollment 
     systems for the assistance programs each Secretary 
     administers that often serve the same children;
       ``(2) the integration of information about the programs 
     established under this title and title XIX in public health 
     awareness campaigns administered by the Secretary;
       ``(3) increased financial and technical support for 
     enrollment hotlines maintained by the Secretary to ensure 
     that all States participate in such hotlines;
       ``(4) the establishment of joint public awareness outreach 
     initiatives with the Secretary of Education and the Secretary 
     of Labor regarding the importance of health insurance to 
     building strong communities and the economy;
       ``(5) the development of special outreach materials for 
     Native Americans or for individuals with limited English 
     proficiency; and
       ``(6) such other outreach initiatives as the Secretary 
     determines would increase public awareness of the programs 
     under this title and title XIX.''.
       (b) Nonapplication of Administrative Expenditures Cap.--
     Section 2105(c)(2) of the Social Security Act (42 U.S.C. 
     1397ee(c)(2)) is amended by adding at the end the following:
       ``(C) Nonapplication to expenditures for outreach and 
     enrollment.--The limitation under subparagraph (A) shall not 
     apply with respect to expenditures for outreach activities 
     under section 2102(c)(1), or for enrollment activities, for 
     children eligible for child health assistance under the State 
     child health plan or medical assistance under the State plan 
     under title XIX.''.

     SEC. 8. IMPROVED STATE OPTION FOR OFFERING PREMIUM ASSISTANCE 
                   FOR COVERAGE OF CHILDREN THROUGH PRIVATE PLANS 
                   UNDER SCHIP AND MEDICAID.

       (a) In General.--Section 2105(c) of the Social Security Act 
     (42 U.S.C. 1397ee(c)), as amended by section 4(a) is amended 
     by adding at the end the following:
       ``(9) Additional state option for offering premium 
     assistance.--
       ``(A) In general.--Subject to the succeeding provisions of 
     this paragraph, a State may elect to offer a premium 
     assistance subsidy (as defined in subparagraph (C)) for 
     qualified coverage (as defined in subparagraph (B)) to all 
     targeted low-income children who are eligible for child 
     health assistance under the plan and have access to such 
     coverage in accordance with the requirements of this 
     paragraph.
       ``(B) Qualified coverage.--In this paragraph, the term 
     `qualified coverage' means the following:
       ``(i) Qualified employer sponsored coverage.--

       ``(I) In general.--A group health plan or health insurance 
     coverage offered through an employer that is--

       ``(aa) substantially equivalent to the benefits coverage in 
     a benchmark benefit package described in section 2103(b) or 
     benchmark-equivalent coverage that meets the requirements of 
     section 2103(a)(2);
       ``(bb) made similarly available to all of the employer's 
     employees and for which the employer makes a contribution to 
     the premium that is not less for employees receiving a 
     premium assistance subsidy under any option available under 
     the State child health plan under this title or the State 
     plan under title XIX to provide such assistance than the 
     employer contribution provided for all other employees; and
       ``(cc) cost-effective, as determined under subclause (II).

       ``(II) Cost-effectiveness.--A group health plan or health 
     insurance coverage offered through an employer shall be 
     considered to be cost-effective if--

       ``(aa) the marginal premium cost to purchase family 
     coverage through the employer is less than the State cost of 
     providing child health assistance through the State child 
     health plan for all the children in the family who are 
     targeted low-income children; or
       ``(bb) the marginal premium cost between individual 
     coverage and purchasing family coverage through the employer 
     is not greater than 175 percent of the cost to the State to 
     provide child health assistance through the State child 
     health plan for a targeted low-income child.
       ``(ii) Qualified non-group coverage.--Health insurance 
     coverage offered to individuals in the non-group health 
     insurance market that is substantially equivalent to the 
     benefits coverage in a benchmark benefit package described in 
     section 2103(b) or benchmark-equivalent coverage that meets 
     the requirements of section 2103(a)(2).
       ``(iii) High deductible health plan.--A high deductible 
     health plan (as defined in

[[Page S842]]

     section 223(c)(2) of the Internal Revenue Code of 1986) 
     purchased through a health savings account (as defined under 
     section 223(d) of such Code).
       ``(C) Premium assistance subsidy.--
       ``(i) In general.--In this paragraph, the term `premium 
     assistance subsidy' means, with respect to a targeted low-
     income child, the amount equal to the difference between the 
     employee contribution required for enrollment only of the 
     employee under qualified employer sponsored coverage and the 
     employee contribution required for enrollment of the employee 
     and the child in such coverage, less any applicable premium 
     cost-sharing applied under the State child health plan, 
     subject to the annual aggregate cost-sharing limit applied 
     under section 2103(e)(3)(B).
       ``(ii) State payment option.--Subject to clause (iii), a 
     State may provide a premium assistance subsidy directly to an 
     employer or as reimbursement to an employee for out-of-pocket 
     expenditures.
       ``(iii) Requirement for direct payment to employee.--A 
     State shall not pay a premium assistance subsidy directly to 
     the employee, unless the State has established procedures to 
     ensure that the targeted low-income child on whose behalf 
     such payments are made are actually enrolled in the qualified 
     employer sponsored coverage.
       ``(iv) Treatment as child health assistance.--Expenditures 
     for the provision of premium assistance subsidies shall be 
     considered child health assistance described in paragraph 
     (1)(C) of subsection (a) for purposes of making payments 
     under that subsection.
       ``(v) State option to require acceptance of subsidy.--A 
     State may condition the provision of child health assistance 
     under the State child health plan for a targeted low-income 
     child on the receipt of a premium assistance subsidy for 
     enrollment in qualified employer sponsored coverage if the 
     State determines the provision of such a subsidy to be more 
     cost-effective in accordance with subparagraph (B)(ii).
       ``(vi) Not treated as income.--Notwithstanding any other 
     provision of law, a premium assistance subsidy provided in 
     accordance with this paragraph shall not be treated as income 
     to the child or the parent of the child for whom such subsidy 
     is provided.
       ``(D) No requirement to provide supplemental coverage for 
     benefits and additional cost-sharing protection provided 
     under the state child health plan.--
       ``(i) In general.--A State that elects the option to 
     provide a premium assistance subsidy under this paragraph 
     shall not be required to provide a targeted low-income child 
     enrolled in qualified employer sponsored coverage with 
     supplemental coverage for items or services that are not 
     covered, or are only partially covered, under the qualified 
     employer sponsored coverage or cost-sharing protection other 
     than the protection required under section 2103(e)(3)(B).
       ``(ii) Notice of cost-sharing requirements.--A State shall 
     provide a targeted low-income child or the parent of such a 
     child (as appropriate) who is provided with a premium 
     assistance subsidy in accordance with this paragraph with 
     notice of the cost-sharing requirements and limitations 
     imposed under the qualified employer sponsored coverage in 
     which the child is enrolled upon the enrollment of the child 
     in such coverage and annually thereafter.
       ``(iii) Record keeping requirements.--A State may require a 
     parent of a targeted low-income child that is enrolled in 
     qualified employer-sponsored coverage to bear the 
     responsibility for keeping track of out-of-pocket 
     expenditures incurred for cost-sharing imposed under such 
     coverage and to notify the State when the limit on such 
     expenditures imposed under section 2103(e)(3)(B) has been 
     reached for a year from the effective date of enrollment for 
     such year.
       ``(iv) State option for reimbursement.--A State may 
     retroactively reimburse a parent of a targeted low-income 
     child for out-of-pocket expenditures incurred after reaching 
     the 5 percent cost-sharing limitation imposed under section 
     2103(e)(3)(B) for a year.
       ``(E) 6-month waiting period required.--A State shall 
     impose at least a 6-month waiting period from the time an 
     individual is enrolled in private health insurance prior to 
     the provision of a premium assistance subsidy for a targeted 
     low-income child in accordance with this paragraph.
       ``(F) Non-application of waiting period for enrollment in 
     the state medicaid plan or the state child health plan.--A 
     targeted low-income child provided a premium assistance 
     subsidy in accordance with this paragraph who loses 
     eligibility for such subsidy shall not be treated as having 
     been enrolled in private health insurance coverage for 
     purposes of applying any waiting period imposed under the 
     State child health plan or the State plan under title XIX for 
     the enrollment of the child under such plan.
       ``(G) Assurance of special enrollment period under group 
     health plans in case of eligibility for premium subsidy 
     assistance.--No payment shall be made under subsection (a) 
     for amounts expended for the provision of premium assistance 
     subsidies under this paragraph unless a State provides 
     assurances to the Secretary that the State has in effect laws 
     requiring a group health plan, a health insurance issuer 
     offering group health insurance coverage in connection with a 
     group health plan, and a self-funded health plan, to permit 
     an employee who is eligible, but not enrolled, for coverage 
     under the terms of the plan (or a child of such an employee 
     if the child is eligible, but not enrolled, for coverage 
     under such terms) to enroll for coverage under the terms of 
     the plan if the employee's child becomes eligible for a 
     premium assistance subsidy under this paragraph.
       ``(H) No effect on previously approved premium assistance 
     programs.--Nothing in this paragraph shall be construed as 
     limiting the authority of a State to offer premium assistance 
     under section 1906, a waiver described in paragraph (2)(B) or 
     (3), a waiver approved under section 1115, or other authority 
     in effect on February 1, 2009.
       ``(I) Notice of availability.--A State shall--
       ``(i) include on any application or enrollment form for 
     child health assistance a notice of the availability of 
     premium assistance subsidies for the enrollment of targeted 
     low-income children in qualified employer sponsored coverage;
       ``(ii) provide, as part of the application and enrollment 
     process under the State child health plan, information 
     describing the availability of such subsidies and how to 
     elect to obtain such a subsidy; and
       ``(iii) establish such other procedures as the State 
     determines necessary to ensure that parents are informed of 
     the availability of such subsidies under the State child 
     health plan.''.
       (b) Application to Medicaid.--Section 1906 of the Social 
     Security Act (42 U.S.C. 1396e) is amended by inserting after 
     subsection (c) the following:
       ``(d) The provisions of section 2105(c)(9) shall apply to a 
     child who is eligible for medical assistance under the State 
     plan in the same manner as such provisions apply to a 
     targeted low-income child under a State child health plan 
     under title XXI. Section 1902(a)(34) shall not apply to a 
     child who is provided a premium assistance subsidy under the 
     State plan in accordance with the preceding sentence.''.

     SEC. 9. TREATMENT OF UNBORN CHILDREN.

       (a) Codification of Current Regulations.--Section 
     2110(c)(1) of the Social Security Act (42 U.S.C. 
     1397jj(c)(1)) is amended by striking the period at the end 
     and inserting the following: ``, and includes, at the option 
     of a State, an unborn child. For purposes of the previous 
     sentence, the term `unborn child' means a member of the 
     species Homo sapiens, at any stage of development, who is 
     carried in the womb.''.
       (b) Clarifications Regarding Coverage of Mothers.--Section 
     2103 (42 U.S.C. 1397cc) is amended by adding at the end the 
     following new subsection:
       ``(g) Clarifications Regarding Authority To Provide 
     Postpartum Services and Maternal Health Care.--Any State that 
     provides child health assistance to an unborn child under the 
     option described in section 2110(c)(1) may--
       ``(1) continue to provide such assistance to the mother, as 
     well as postpartum services, through the end of the month in 
     which the 60-day period (beginning on the last day of 
     pregnancy) ends; and
       ``(2) in the interest of the child to be born, have 
     flexibility in defining and providing services to benefit 
     either the mother or unborn child consistent with the health 
     of both.''.

     SEC. 10. 50 PERCENT MATCHING RATE FOR ALL MEDICAID 
                   ADMINISTRATIVE COSTS.

       Section 1903(a) of the Social Security Act (42 U.S.C. 
     1396b(a)) is amended--
       (1) by striking paragraph (2);
       (2) by redesignating paragraph (3)(E) as paragraph (2) and 
     re-locating and indenting it appropriately;
       (3) in paragraph (2), as so redesignated, by redesignating 
     clauses (i) and (ii) as subparagraphs (A) and (B), and 
     indenting them appropriately;
       (4) by striking paragraphs (3) and (4);
       (5) in paragraph (5), by striking ``which are attributable 
     to the offering, arranging, and furnishing'' and inserting 
     ``which are for the medical assistance costs of furnishing'';
       (6) by striking paragraph (6);
       (7) in paragraph (7), by striking ``subject to section 
     1919(g)(3)(B),''; and
       (8) by redesignating paragraphs (5) and (7) as paragraphs 
     (3) and (4), respectively.

     SEC. 11. REDUCTION IN PAYMENTS FOR MEDICAID ADMINISTRATIVE 
                   COSTS TO PREVENT DUPLICATION OF SUCH PAYMENTS 
                   UNDER TANF.

       Section 1903 of the Social Security Act (42 U.S.C. 1396b) 
     is amended--
       (1) in subsection (a)(7), by striking ``section 
     1919(g)(3)(B)'' and inserting ``subsection (h)'';
       (2) in subsection (a)(2)(D) by inserting ``, subject to 
     subsection (g)(3)(C) of such section'' after ``as are 
     attributable to State activities under section 1919(g)''; and
       (3) by adding after subsection (g) the following new 
     subsection:
       ``(h) Reduction in Payments for Administrative Costs To 
     Prevent Duplication of Payments Under Title IV.--Beginning 
     with the calendar quarter commencing April 1, 2009, the 
     Secretary shall reduce the amount paid to each State under 
     subsection (a)(7) for each quarter by an amount equal to \1/
     4\ of the annualized amount determined for the Medicaid 
     program under section 16(k)(2)(B) of the Food Stamp Act of 
     1977 (7 U.S.C. 2025(k)(2)(B)).''.

     SEC. 12. ELIMINATION OF WAIVER OF CERTAIN MEDICAID PROVIDER 
                   TAX PROVISIONS.

       Effective October 1, 2009, subsection (c) of section 4722 
     of the Balanced Budget Act of 1997 (Public Law 105-33; 111 
     Stat. 515) is repealed.

[[Page S843]]

     SEC. 13. ELIMINATION OF SPECIAL PAYMENTS FOR CERTAIN PUBLIC 
                   HOSPITALS.

       Effective October 1, 2009, subsection (d) of section 701 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 (42 U.S.C. 1396r-4 note), is 
     repealed.

     SEC. 14. EFFECTIVE DATE; COORDINATION OF FUNDING FOR FISCAL 
                   YEAR 2009.

       (a) In General.--Unless otherwise specified, subject to 
     subsection (b), the amendments made by this Act shall take 
     effect on the date of enactment of this Act.
       (b) Delay if State Legislation Required.--In the case of a 
     State child health plan under title XXI of the Social 
     Security Act or a waiver of such plan under section 1115 of 
     such Act which the Secretary of Health and Human Services 
     determines requires State legislation (other than legislation 
     appropriating funds) in order for the plan or waiver to meet 
     the additional requirements imposed by the amendments made by 
     this Act, the State child health plan or waiver shall not be 
     regarded as failing to comply with the requirements of such 
     title XXI solely on the basis of its failure to meet such 
     additional requirements before the first day of the first 
     calendar quarter beginning after the close of the first 
     regular session of the State legislature that begins after 
     the date of the enactment of this Act. For purposes of the 
     previous sentence, in the case of a State that has a 2-year 
     legislative session, each year of such session shall be 
     deemed to be a separate regular session of the State 
     legislature.
       (c) Coordination of Funding for Fiscal Year 2009.--
     Notwithstanding any other provision of law, insofar as funds 
     have been appropriated under section 2104(a)(11) of the 
     Social Security Act, as amended by section 201(a) of Public 
     Law 110-173 and in effect on January 1, 2009, to provide 
     allotments to States under title XXI of the Social Security 
     Act for fiscal year 2009--
       (1) any amounts that are so appropriated that are not so 
     allotted and obligated before the date of the enactment of 
     this Act are rescinded; and
       (2) any amount provided for allotments under title XXI of 
     such Act to a State under the amendments made by this Act for 
     such fiscal year shall be reduced by the amount of such 
     appropriations so allotted and obligated before such date.
                                 ______