< Back to H.R. 5218 (108th Congress, 2003–2004)

Text of the Matt’s Health Insurance Plan Act of 2004

This bill was introduced on October 5, 2004, in a previous session of Congress, but was not enacted. The text of the bill below is as of Oct 5, 2004 (Introduced).

Source: GPO

HR 5218 IH

108th CONGRESS

2d Session

H. R. 5218

To increase health insurance coverage in America by requiring employers to offer health insurance coverage with greater government assistance and by expanding current safety net programs, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

October 5, 2004

Mr. GEPHARDT introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means and Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


A BILL

To increase health insurance coverage in America by requiring employers to offer health insurance coverage with greater government assistance and by expanding current safety net programs, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘Matt’s Health Insurance Plan Act of 2004’.

    (b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

      Sec. 1. Short title; table of contents.

TITLE I--REQUIREMENT FOR EMPLOYERS TO PROVIDE HEALTH INSURANCE COVERAGE

      Sec. 101. Requirement for employers to provide health insurance coverage.

      Sec. 102. Tax credits for employers to provide health insurance coverage.

      Sec. 103. Health care costs of nontaxpayer employers.

TITLE II--EXPANSION OF EXISTING PUBLIC PROGRAMS

Subtitle A--Access to Medicare Benefits for Individuals 55-to-65 Years of Age

      Sec. 201. Access to medicare benefits for individuals 55-to-65 years of age.

Subtitle B--Refundable Tax Credit for Employee Costs of COBRA Coverage

      Sec. 211. Refundable tax credit for employee costs of COBRA coverage.

Subtitle C--FamilyCare

      Sec. 221. Renaming of title XXI program.

      Sec. 222. Familycare coverage of parents and pregnant women under the medicaid program and title XXI.

      Sec. 223. Automatic enrollment of children born to title XXI parents.

      Sec. 224. Allowing States to simplify rules for families.

      Sec. 225. Revision and simplification of the transitional medical assistance program (TMA).

      Sec. 226. Limitations on conflicts of interest.

      Sec. 227. Increase in chip allotment for each of fiscal years 2002 through 2004.

      Sec. 228. Demonstration programs to improve medicaid and chip outreach to homeless individuals and families.

      Sec. 229. Additional chip revisions.

      Sec. 230. Increased Federal reimbursement for language services under the medicaid program and title XXI.

TITLE III--NATIONAL CENTER FOR EVIDENCE-BASED HEALTHCARE PRACTICES

      Sec. 301. Establishment of center.

TITLE I--REQUIREMENT FOR EMPLOYERS TO PROVIDE HEALTH INSURANCE COVERAGE

SEC. 101. REQUIREMENT FOR EMPLOYERS TO PROVIDE HEALTH INSURANCE COVERAGE.

    (a) IN GENERAL- Each employers must offer health insurance coverage constituting qualified health care to employees and former employees of such employer and to their families.

    (b) INCORPORATION OF TERMS- For purposes of subsection (a), the terms ‘employer’, ‘qualified health care’, ‘employee’, ‘former employee’, and ‘family’ have the meanings given such terms for purposes of chapter 101 of the Internal Revenue Code of 1986, as added by section 102(a).

SEC. 102. TAX CREDITS FOR EMPLOYERS TO PROVIDE HEALTH INSURANCE COVERAGE.

    (a) IN GENERAL- The Internal Revenue Code of 1986 is amended by adding at the end the following new subtitle:

‘Subtitle L--Employment-Based Health Insurance Tax Credits

‘Chapter 101--EMPLOYMENT-BASED HEALTH INSURANCE TAX CREDITS

‘CHAPTER 101--EMPLOYMENT-BASED HEALTH INSURANCE TAX CREDITS

‘Sec. 9901. Health care costs of employers.

‘Sec. 9902. Health insurance costs of the self-employed.

‘Sec. 9903. Health insurance costs of certain low wage workers.

‘Sec. 9904. Special rules.

‘SEC. 9901. HEALTH CARE COSTS OF EMPLOYERS.

    ‘(a) CREDIT FOR EMPLOYERS PROVIDING INSURANCE PRE-EFFECTIVE DATE-

      ‘(1) IN GENERAL- In the case of a specified employer, there shall be allowed as a credit against the tax imposed by subtitle A an amount equal to 60 percent of the amount paid or incurred by the employer during the taxable year to provide qualified health care (directly or otherwise) to the employees and former employees of such employer and to their families.

      ‘(2) SPECIFIED EMPLOYER- For purposes of this subsection--

        ‘(A) IN GENERAL- The term ‘specified employer’ means any employer who provided health care (directly or otherwise) to any employee or former employee of such employer under a group health plan (as defined in section 5000(b)) during the 1-year period ending on January 1, 2005.

        ‘(B) SUCCESSOR EMPLOYERS- Except as provided in regulations, any entity and any predecessor or successor entities of such entity shall be treated as 1 entity.

    (b) CREDIT FOR OTHER EMPLOYERS-

      (1) IN GENERAL- In the case of any employer (other than an employer to which subsection (a) applies), there shall be allowed as a credit against the tax imposed by subtitle A an amount equal to the lesser of--

        ‘(A) 100 percent of the amount paid or incurred by the employer during the taxable year to provide qualified health care (directly or otherwise) to the employees and former employees of such employer and to their families, or

        ‘(B) 60 percent of the total amounts paid or incurred (including any amounts paid or incurred by employees or former employees of the employer as premiums or other cost-sharing) during the taxable year to provide qualified health care (directly or otherwise) to the employees and former employees of such employer and to their families.

    ‘(c) QUALIFIED HEALTH CARE- For purposes of this section, the term ‘qualified health care’ means health care for which the employer bears 60 percent or more of the cost.

    ‘(d) CERTAIN EMPLOYMENT NOT TAKEN INTO ACCOUNT- For purposes this section, except as provided in regulations by the Secretary, an individual shall be treated as an employee only with respect to employment described in section 3121(b) (determined without regard to paragraph (7) thereof).

‘SEC. 9902. HEALTH INSURANCE COSTS OF THE SELF-EMPLOYED.

    ‘(a) IN GENERAL- In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a credit against the tax imposed by subtitle A an amount equal to 60 percent of the amount paid by the taxpayer during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and dependents.

    ‘(b) LIMITATIONS-

      ‘(1) DOLLAR AMOUNT- No credit shall be allowed under subsection (a) to the extent that the amount of such credit exceeds the taxpayer’s earned income (within the meaning of section 401(c)) derived by the taxpayer from the trade or business with respect to which the plan providing the medical care coverage is established.

      ‘(2) OTHER COVERAGE- Subsection (a) shall not apply to any taxpayer for any calendar month for which the taxpayer is eligible to participate in any subsidized health plan maintained by any employer of the taxpayer or of the spouse of the taxpayer. The preceding sentence shall be applied separately with respect to--

        ‘(A) plans which include coverage for qualified long-term care services (as defined in section 7702B(c)) or are qualified long-term care insurance contracts (as defined in section 7702B(b)), and

        ‘(B) plans which do not include such coverage and are not such contracts.

      ‘(3) LONG-TERM CARE PREMIUMS- In the case of a qualified long-term care insurance contract (as defined in section 7702B(b)), only eligible long-term care premiums (as defined in section 213(d)(10) shall be taken into account under paragraph (1).

‘SEC. 9903. HEALTH INSURANCE COSTS OF CERTAIN LOW WAGE WORKERS.

    ‘(a) IN GENERAL- In the case of an individual, there shall be allowed as a credit against the tax imposed by subtitle A an amount equal to 25 percent of the amount paid by the taxpayer for coverage of the taxpayer, his spouse, and dependents under any subsidized health plan maintained by any employer of the taxpayer or of the spouse of the taxpayer.

    ‘(b) LIMITATION-

      ‘(1) IN GENERAL- The amount of the credit allowed under subsection (a) shall be reduced (but not below zero) by an amount which bears the same ratio to the amount so determined as--

        ‘(A) the amount (if any) by which the taxpayer’s adjusted gross income for the taxable year exceeds the threshold amount, bears to

        ‘(B) the threshold amount.

      ‘(2) THRESHOLD AMOUNT- For purposes of this subsection, the term ‘threshold amount’ means the poverty line (as defined in section 673(2) of the Community Services Block Grant Act, including any revision required by such section) for a family of the size involved, as in effect at the close of the taxable year.

    ‘(c) SPECIAL RULES-

      ‘(1) COORDINATION WITH SAVINGS ACCOUNTS- Amounts distributed from an Archer MSA (as defined in section 220(d)) or a health savings account (as defined in section 223(d)) shall not be taken into account under subsection (a).

      ‘(2) DENIAL OF CREDIT TO DEPENDENTS- No credit shall be allowed under this section to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual’s taxable year begins.

      ‘(3) MARRIED COUPLES MUST FILE JOINT RETURN- If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and his spouse file a joint return for the taxable year. Rules similar to the rules of paragraphs (3) and (4) of section 21(e) shall apply for purposes of this paragraph.

‘SEC. 9904. SPECIAL RULES.

    ‘(a) CREDITS TREATED AS REFUNDABLE- For purposes of this title, the credits allowed under this chapter shall be treated as allowed under subpart C of part IV of subchapter A of chapter 1.

    ‘(b) COORDINATION WITH DEDUCTIONS- Any amount which is taken into account under section 9901(a)(1), 9901(b)(1) (determined without regard to section 9901(b)(1)(B)), 9902(a), or 9903(a) shall not be taken into account in determining any deduction under subtitle A.

    ‘(c) REGULATIONS- The Secretary may prescribe such regulations and other guidance as may be necessary or appropriate to carry out this chapter.’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 162 of the Internal Revenue Code of 1986 is amended by striking subsection (l).

      (2) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting ‘or chapter 101’ after ‘section 35’.

      (3) The table of subtitles of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

      ‘Subtitle L--Employment-based health insurance tax credits.’.

    (c) EFFECTIVE DATE- The amendments made by this subsection shall apply to taxable years beginning after December 31, 2004.

SEC. 103. HEALTH CARE COSTS OF NONTAXPAYER EMPLOYERS.

    (a) PAYMENTS BY SECRETARY OF THE TREASURY- The Secretary of the Treasury shall establish a program under which the Secretary shall make payments to qualified nontaxpayer employers in amounts equal to the credits that such employers would have been allowed under section 9901 of the Internal Revenue Code of 1986 if such employers were subject to, and not exempt from, taxation under subtitle A of such Code.

    (b) QUALIFIED NONTAXPAYER EMPLOYERS- For purposes of this section, the term ‘qualified nontaxpayer employer’ means any employer which is--

        (A) a State, political subdivision of a State, or any agency or instrumentality of a State or political subdivision of a State,

        (B) any Indian tribal government (as defined in section 7701(a)(40) of the Internal Revenue Code of 1986), subdivision of an Indian tribal government (determined in accordance with section 7871(d) of such Code), or an agency or instrumentality of an Indian tribal government or subdivision thereof, or

        (C) any other organization (other than a governmental or tribal unit) exempt from tax under subtitle A of the Internal Revenue Code of 1986.

TITLE II--EXPANSION OF EXISTING PUBLIC PROGRAMS

Subtitle A--Access to Medicare Benefits for Individuals 55-to-65 Years of Age

SEC. 201. ACCESS TO MEDICARE BENEFITS FOR INDIVIDUALS 55-TO-65 YEARS OF AGE.

    (a) In General- Title XVIII of the Social Security Act, as amended by section 101(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173), is amended--

      (1) by redesignating part E as part F; and

      (2) by inserting after part D the following new part:

‘PART E--PURCHASE OF MEDICARE BENEFITS BY CERTAIN INDIVIDUALS 55-TO-65 YEARS OF AGE

‘SEC. 1860E-1. PROGRAM BENEFITS; ELIGIBILITY.

    ‘(a) Entitlement to Medicare Benefits for Enrolled Individuals-

      ‘(1) In general- An individual enrolled under this part is entitled to the same benefits under this title as an individual entitled to benefits or enrolled under any part of this title.

      ‘(2) Definitions- For purposes of this part:

        ‘(A) Federal or state COBRA continuation provision- The term ‘Federal or State COBRA continuation provision’ has the meaning given the term ‘COBRA continuation provision’ in section 2791(d)(4) of the Public Health Service Act and includes a comparable State program, as determined by the Secretary.

        ‘(B) Federal health insurance program defined- The term ‘Federal health insurance program’ means any of the following:

          ‘(i) Medicare- Any part of this title (other than by reason of this part).

          ‘(ii) Medicaid- A State plan under title XIX.

          ‘(iii) FEHBP- The Federal employees health benefit program under chapter 89 of title 5, United States Code.

          ‘(iv) TRICARE- The TRICARE program (as defined in section 1072(7) of title 10, United States Code).

          ‘(v) Active duty military- Health benefits under title 10, United States Code, to an individual as a member of the uniformed services of the United States.

        ‘(C) Group health plan- The term ‘group health plan’ has the meaning given such term in section 2791(a)(1) of the Public Health Service Act.

    ‘(b) Eligibility of Individuals Age 55-to-65 Years of Age-

      ‘(1) In general- Subject to paragraph (2), an individual who meets the following requirements with respect to a month is eligible to enroll under this part with respect to such month:

        ‘(A) Age- As of the last day of the month, the individual has attained 55 years of age, but has not attained 65 years of age.

        ‘(B) Medicare eligibility (but for age)- The individual would be eligible for benefits under part A or part B for the month if the individual were 65 years of age.

        ‘(C) Not eligible for coverage under group health plans or federal health insurance programs- The individual is not eligible for benefits or coverage under a Federal health insurance program (as defined in subsection (a)(2)(B)) or under a group health plan (other than such eligibility merely through a Federal or State COBRA continuation provision) as of the last day of the month involved.

      ‘(2) Limitation on eligibility if terminated enrollment- If an individual described in paragraph (1) enrolls under this part and coverage of the individual is terminated under section 1860E-2(d) (other than because of age), the individual is not again eligible to enroll under this subsection unless the following requirements are met:

        ‘(A) New coverage under group health plan or federal health insurance program- After the date of termination of coverage under such section, the individual obtains coverage under a group health plan or under a Federal health insurance program.

        ‘(B) Subsequent loss of new coverage- The individual subsequently loses eligibility for the coverage described in subparagraph (A) without regard to whether the individual has exhausted any eligibility the individual may subsequently have for coverage under a Federal or State COBRA continuation provision.

      ‘(3) Change in health plan eligibility does not affect coverage- In the case of an individual who is eligible for and enrolls under this part under this subsection, the individual’s continued entitlement to benefits under this part shall not be affected by the individual’s subsequent eligibility for benefits or coverage described in paragraph (1)(C), or entitlement to such benefits or coverage.

‘SEC. 1860E-2. ENROLLMENT PROCESS; COVERAGE.

    ‘(a) In General- An individual may enroll in the program established under this part only in such manner and form as may be prescribed by regulations, and only during an enrollment period prescribed by the Secretary consistent with the provisions of this section. Such regulations shall provide a process under which individuals eligible to enroll as of a month are permitted to pre-enroll during a prior month within an enrollment period described in subsection (b).

    ‘(b) Enrollment Periods-

      ‘(1) INDIVIDUALS 55-TO-65 YEARS OF AGE- In the case of individuals eligible to enroll under this part under section 1860E-1(b)--

        ‘(A) Initial enrollment period- If the individual is eligible to enroll under such section for January 2005, the enrollment period shall begin on November 1, 2004, and shall end on February 28, 2005. Any such enrollment before January 1, 2005, is conditioned upon compliance with the conditions of eligibility for January 2005.

        ‘(B) Subsequent periods- If the individual is eligible to enroll under such section for a month after January 2005, the enrollment period shall begin on the first day of the second month before the month in which the individual first is eligible to so enroll and shall end four months later. Any such enrollment before the first day of the third month of such enrollment period is conditioned upon compliance with the conditions of eligibility for such third month.

      ‘(2) Authority to correct for government errors- The provisions of section 1837(h) apply with respect to enrollment under this part in the same manner as they apply to enrollment under part B.

    ‘(c) Date Coverage Begins-

      ‘(1) In general- The period during which an individual is entitled to benefits under this part shall begin as follows, but in no case earlier than January 1, 2005:

        ‘(A) In the case of an individual who enrolls (including pre-enrolls) before the month in which the individual satisfies eligibility for enrollment under section 1860E-1, the first day of such month of eligibility.

        ‘(B) In the case of an individual who enrolls during or after the month in which the individual first satisfies eligibility for enrollment under such section, the first day of the following month.

      ‘(2) Authority to provide for partial months of coverage- Under regulations, the Secretary may, in the Secretary’s discretion, provide for coverage periods that include portions of a month in order to avoid lapses of coverage.

      ‘(3) Limitation on payments- No payments may be made under this title with respect to the expenses of an individual enrolled under this part unless such expenses were incurred by such individual during a period which, with respect to the individual, is a coverage period under this section.

    ‘(d) Termination of Coverage-

      ‘(1) In general- An individual’s coverage period under this part shall continue until the individual’s enrollment has been terminated at the earliest of the following:

        ‘(A) General provisions-

          ‘(i) Notice- The individual files notice (in a form and manner prescribed by the Secretary) that the individual no longer wishes to participate in the insurance program under this part.

          ‘(ii) Nonpayment of premiums- The individual fails to make payment of premiums required for enrollment under this part.

          ‘(iii) Medicare eligibility- The individual becomes entitled to benefits or enrolled under any other part of this title (other than by reason of this part).

        ‘(B) Termination based on age- The individual attains 65 years of age.

      ‘(2) Effective date of termination-

        ‘(A) Notice- The termination of a coverage period under paragraph (1)(A)(i) shall take effect at the close of the month following for which the notice is filed.

        ‘(B) Nonpayment of premium- The termination of a coverage period under paragraph (1)(A)(ii) shall take effect on a date determined under regulations, which may be determined so as to provide a grace period in which overdue premiums may be paid and coverage continued. The grace period determined under the preceding sentence shall not exceed 60 days; except that it may be extended for an additional 30 days in any case where the Secretary determines that there was good cause for failure to pay the overdue premiums within such 60-day period.

        ‘(C) Age or medicare eligibility- The termination of a coverage period under paragraph (1)(A)(iii) or (1)(B) shall take effect as of the first day of the month in which the individual attains 65 years of age or becomes entitled to benefits or enrolled in any other part of this title (other than by reason of this part).

‘SEC. 1860E-3. PREMIUMS.

    ‘(a) Amount of Monthly Premiums- The Secretary shall, during September of each year (beginning with 2004), determine a monthly premium for individuals 55 years of age or older, equal to 1/12 of the annual premium computed under subsection (b)(2), which shall apply with respect to coverage provided under this title for any month in the succeeding year.

    ‘(b) Annual Premium-

      ‘(1) National, per capita average- The Secretary shall estimate the average, annual per capita amount that would be payable under this title with respect to individuals residing in the United States who meet the requirement of section 1860E-1(b)(1)(A) as if all such individuals were eligible for (and enrolled) under this title during the entire year (and assuming that section 1862(b)(2)(A)(i) did not apply).

      ‘(2) Annual premium- The annual premium under this subsection for months in a year is equal to the average, annual per capita amount estimated under paragraph (1) for the year.

‘SEC. 1860E-4. PAYMENT OF PREMIUMS.

    ‘(a) Payment of Monthly Premium-

      ‘(1) In general- The Secretary shall provide for payment and collection of the monthly premium, determined under section 1860E-3(a) for the age of the individual involved, in the same manner as for payment of monthly premiums under section 1840, except that, for purposes of applying this section, any reference in such section to the Federal Supplementary Medical Insurance Trust Fund is deemed a reference to the Trust Fund established under section 1860E-6.

      ‘(2) Period of payment- In the case of an individual who participates in the program established by this title, the monthly premium shall be payable for the period commencing with the first month of the individual’s coverage period and ending with the month in which the individual’s coverage under this title terminates.

    ‘(b) Application of Certain Provisions- The provisions of section 1840 (other than subsection (h)) shall apply to premiums collected under this section in the same manner as they apply to premiums collected under part B, except that any reference in such section to the Federal Supplementary Medical Insurance Trust Fund is deemed a reference to the Trust Fund established under section 1860E-6.

‘SEC. 1860E-5. PROVISIONS RELATING TO EMPLOYMENT-BASED RETIREE HEALTH COVERAGE.

    ‘(a) In General- In the case of an individual who would be eligible to enroll under this part but for the provision of employment-based retiree health coverage by an employer to the individual, notwithstanding the limitation under section 1860E-1(b)(1)(C), the individual is eligible to enroll under this part.

    ‘(b) Maintenance of Effort- In the case of an employer that offers employment-based retiree health coverage to an individual who enrolls under this part, upon enrollment of the individual under this part, the employer may modify such coverage to provide for the following benefits:

      ‘(1) Payment is made by the employer under such coverage for items and services for which payment may not be made under this title.

      ‘(2) Payment is made by the employer sponsoring such coverage of 25 percent of the monthly premium under section 1860E-3 applicable to the individual after enrollment under this part.

    ‘(c) Employment-Based Retiree Health Coverage- The term ‘employment-based retiree health coverage’ has the meaning given that term in section 1860D-22(c)(1), except that, fur purposes of this part, any reference in such section to ‘part D’ is deemed to be a reference to ‘part E’.

‘SEC. 1860E-6. MEDICARE EARLY ACCESS TRUST FUND.

    ‘(a) Establishment of Trust Fund-

      ‘(1) In general- There is hereby created on the books of the Treasury of the United States a trust fund to be known as the ‘Medicare Early Access Trust Fund’ (in this section referred to as the ‘Trust Fund’). The Trust Fund shall consist of such gifts and bequests as may be made as provided in section 201(i)(1) and such amounts as may be deposited in, or appropriated to, such fund as provided in this title.

      ‘(2) Premiums- Premiums collected under section 1860E-3 and payable under section 1860E-5(a)(2) shall be transferred to the Trust Fund.

    ‘(b) Incorporation of Provisions-

      ‘(1) In general- Subject to paragraph (2), subsections (b) through (i) of section 1841 shall apply with respect to the Trust Fund and this title in the same manner as they apply with respect to the Federal Supplementary Medical Insurance Trust Fund and part B, respectively.

      ‘(2) Miscellaneous references- In applying provisions of section 1841 under paragraph (1)--

        ‘(A) any reference in such section to ‘this part’ is construed to refer to this part E;

        ‘(B) any reference in section 1841(h) to section 1840(d) and in section 1841(i) to sections 1840(b)(1) and 1842(g) are deemed references to comparable authority exercised under this part; and

        ‘(C) payments may be made under section 1841(g) to the Trust Funds under sections 1817 and 1841 as reimbursement to such funds for payments they made for benefits provided under this part.

‘SEC. 1860E-7. OVERSIGHT AND ACCOUNTABILITY.

    ‘(a) Through Annual Reports of Trustees- The Board of Trustees of the Medicare Early Access Trust Fund under section 1860E-6(b)(1) shall report on an annual basis to Congress concerning the status of the Trust Fund and the need for adjustments in the program under this part to maintain financial solvency of the program under this part.

    ‘(b) Periodic GAO Reports- The Comptroller General of the United States shall periodically submit to Congress reports on the adequacy of the financing of coverage provided under this part. The Comptroller General shall include in such report such recommendations for adjustments in such financing and coverage as the Comptroller General deems appropriate in order to maintain financial solvency of the program under this part.

‘SEC. 1860E-8. ADMINISTRATION AND MISCELLANEOUS.

    ‘(a) Treatment for Purposes of Title- Except as otherwise provided in this part--

      ‘(1) individuals enrolled under this part shall be treated for purposes of this title as though the individual were entitled to benefits and enrolled under any part of this title; and

      ‘(2) benefits described in section 1860E-1 shall be payable under this title to such individuals in the same manner as if such individuals were so entitled and enrolled.

    ‘(b) Not Treated as Medicare Program for Purposes of Medicaid Program- For purposes of applying title XIX (including the provision of medicare cost-sharing assistance under such title), an individual who is enrolled under this part shall not be treated as being entitled to benefits under this title.

    ‘(c) Not Treated as Medicare Program for Purposes of COBRA Continuation Provisions- In applying a COBRA continuation provision (as defined in section 2791(d)(4) of the Public Health Service Act), any reference to an entitlement to benefits under this title shall not be construed to include entitlement to benefits under this title pursuant to the operation of this part.’.

    (b) CONFORMING AMENDMENTS TO SOCIAL SECURITY ACT- (1) Section 201(i)(1) of the Social Security Act (42 U.S.C. 401(i)(1)) is amended by striking ‘or the Federal Supplementary Medical Insurance Trust Fund’ and inserting ‘the Federal Supplementary Medical Insurance Trust Fund, and the Medicare Early Access Trust Fund’.

    (2) Section 201(g)(1)(A) of such Act (42 U.S.C. 401(g)(1)(A)) is amended by striking ‘and the Federal Supplementary Medical Insurance Trust Fund established by title XVIII’ and inserting ‘, the Federal Supplementary Medical Insurance Trust Fund, and the Medicare Early Access Trust Fund established by title XVIII’.

    (3) Section 1820(i) of such Act (42 U.S.C. 1395i-4(i)) is amended by striking ‘part D’ and inserting ‘part F’.

      (4) Section 1853 of such Act (42 U.S.C. 1395w-23), as amended by section 222(d) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173), is amended by adding at the end the following new subsection:

    ‘(k) Adjustment for Early Access- In applying this section with respect to individuals entitled to benefits under part E, the Secretary shall provide for an appropriate adjustment in, for 2005, the Medicare+Choice capitation rate, and for years beginning with 2006, the payment amount determined under this section or section 1858, as may be appropriate to reflect differences between the population served under such part and the population under parts A and B.’.

      (5) Section 1860D-15(c)(1) of such Act, as added by section 101(a) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173), is amended by adding at the end the following new subparagraph:

        ‘(E) Adjustment for early access- In applying this section with respect to individuals entitled to benefits under part E, the Secretary shall provide for an appropriate adjustment in the payment amount determined under this section as may be appropriate to reflect differences between the population served under such part and the population under parts A and B.’.

    (c) OTHER CONFORMING- (1) Section 602(2)(D)(ii) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1162(2)) is amended by inserting ‘(not including an individual who is so entitled pursuant to enrollment under section 1860E-1)’ after ‘Social Security Act’.

    (2) Section 2202(2)(D)(ii) of the Public Health Service Act (42 U.S.C. 300bb-2(2)(D)(ii)) is amended by inserting ‘(not including an individual who is so entitled pursuant to enrollment under section 1860E-1)’ after ‘Social Security Act’.

    (3) Section 4980B(f)(2)(B)(i)(V) of the Internal Revenue Code of 1986 is amended by inserting ‘(not including an individual who is so entitled pursuant to enrollment under section 1860E-1)’ after ‘Social Security Act’.

Subtitle B--Refundable Tax Credit for Employee Costs of COBRA Coverage

SEC. 211. REFUNDABLE TAX CREDIT FOR EMPLOYEE COSTS OF COBRA COVERAGE.

    (a) IN GENERAL- Chapter 101 of the Internal Revenue Code of 1986, as added by section 102, is amended by redesignating section 9905 as section 9906 and by inserting after section 9904 the following new section:

‘SEC. 9905. EMPLOYEE COSTS OF COBRA COVERAGE.

    ‘(a) IN GENERAL- In the case of an individual, there shall be allowed against the tax imposed by subtitle A an amount equal to 65 percent of the amount paid by the taxpayer for coverage of the taxpayer, his spouse, and dependents under a COBRA continuation provision (as defined in section 9832(d)(1)).

    ‘(b) SPECIAL RULES- Rules similar to the rules of section 9904(c) shall apply for purposes of this section.’.

    (b) CONFORMING AMENDMENTS-

      (1) Subsection (b) of section 9906 of such Code (as added by section 102 and redesignated by subsection (a)) is further amended by striking ‘or 9904(a)’ and inserting ‘9904(a), or 9905(a)’.

      (2) The table of sections for chapter 101 of such Code is amended by striking the item relating to section 9905 and inserting the following new items:

‘Sec. 9905. Employee costs of COBRA coverage.

‘Sec. 9906. Special rules.’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2004.

Subtitle C--FamilyCare

SEC. 221. RENAMING OF TITLE XXI PROGRAM.

    (a) IN GENERAL- The heading of title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.) is amended to read as follows:

‘TITLE XXI--FAMILYCARE PROGRAM’.

    (b) PROGRAM REFERENCES- Any reference in any provision of Federal law or regulation to ‘SCHIP’ or ‘State children’s health insurance program’ under title XXI of the Social Security Act shall be deemed a reference to the FamilyCare program under such title.

SEC. 222. FAMILYCARE COVERAGE OF PARENTS AND PREGNANT WOMEN UNDER THE MEDICAID PROGRAM AND TITLE XXI.

    (a) INCENTIVES TO IMPLEMENT FAMILYCARE COVERAGE-

      (1) UNDER MEDICAID-

        (A) ESTABLISHMENT OF NEW OPTIONAL ELIGIBILITY CATEGORY- Section 1902(a)(10)(A)(ii) of the Social Security Act (42 U.S.C. 1396a(a)(10)(A)(ii)) is amended--

          (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:

            ‘(XIX) who are individuals described in subsection (k)(1) (relating to parents of categorically eligible children);’.

        (B) PARENTS DESCRIBED- Section 1902 of the Social Security Act is further amended by inserting after subsection (j) the following:

    ‘(k)(1)(A) Individuals described in this paragraph are individuals--

      ‘(i) who are the parents of an individual who is under 19 years of age (or such higher age as the State may have elected under section 1902(l)(1)(D)) and who is eligible for medical assistance under subsection (a)(10)(A);

      ‘(ii) who are not otherwise eligible for medical assistance under such subsection or under a waiver approved under section 1115 or otherwise (except under section 1931 or under subsection (a)(10)(A)(ii)(XIX)); and

      ‘(iii) whose family income or resources exceeds the effective income level or resource level applicable under the State plan under part A of title IV as in effect as of July 16, 1996, but does not exceed the highest effective income or resource level (if any) applicable to a child in the family under this title.

    ‘(B) In establishing an income eligibility level for individuals described in this paragraph, a State may vary such level consistent with the various income levels established under subsection (l)(2) in order to ensure, to the maximum extent possible, that such individuals shall be enrolled in the same program as their children.

    ‘(C) An individual may not be treated as being described in this paragraph unless, at the time of the individual’s enrollment under this title, the child referred to in subparagraph (A)(i) of the individual is also enrolled under this title or otherwise insured.

    ‘(D) In this subsection, the term ‘parent’ includes an individual treated as a caretaker for purposes of carrying out section 1931.

    ‘(E) In this subsection, the term ‘effective income level’ means the income level expressed as a percent of the poverty line and considering applicable income disregards.

    ‘(2) The State shall provide for coverage of a parent described in paragraph (1) or section 2111 of a child who is covered under this title or title XXI under the same title as the title as such child is covered. In the case of a parent described in paragraph (1) who is also the parent of a child who is eligible for child health assistance under title XXI, the State may elect (on a uniform basis) to cover all such parents under section 2111 or under this title.’.

        (C) ENHANCED MATCHING FUNDS AVAILABLE IF CERTAIN CONDITIONS MET- Section 1905 of the Social Security Act (42 U.S.C. 1396d) is amended--

          (i) in the fourth sentence of subsection (b), by striking ‘or subsection (u)(3)’ and inserting ‘, (u)(3), or (u)(4)(A)’; and

          (ii) in subsection (u)--

            (I) by redesignating paragraph (4) as paragraph (6), and

            (II) by inserting after paragraph (3) the following:

    ‘(4) For purposes of subsection (b) and section 2105(a)(1):

      ‘(A) FAMILYCARE PARENTS- The expenditures described in this subparagraph are the expenditures described in the following clauses (i) and (ii):

        ‘(i) PARENTS- If the conditions described in clauses (iii) and (iv) are met, expenditures for medical assistance for parents described in section 1902(k)(1) and for parents who would be described in such section but for the fact that they are eligible for medical assistance under section 1931 or under a waiver approved under section 1115.

        ‘(ii) CERTAIN PREGNANT WOMEN- If the conditions described in clause (v) are met, expenditures for medical assistance for pregnant women described in subsection (n) or under section 1902(l)(1)(A) in a family the income of which exceeds the effective income level applicable under subsection (a)(10)(A)(i)(III) or (l)(2)(A) of section 1902 to a family of the size involved as of January 1, 2005.

        ‘(iii) CONDITIONS RELATING TO ENSURING CHILDREN’S COVERAGE FOR ENHANCED MATCH FOR PARENTS- The conditions described in this clause are the following:

          ‘(I) The State has a State child health plan under title XXI which (whether implemented under such title or under this title) has an effective income level for children that is at least 200 percent of the poverty line.

          ‘(II) Such State child health plan does not limit the acceptance of applications, does not use a waiting list for children who meet eligibility standards to qualify for assistance, and provides benefits to all children in the State who apply for and meet eligibility standards.

          ‘(III) Effective for determinations of eligibility made on or after the date that is 1 year after the date of the enactment of this clause, the application and renewal procedures for individuals under 19 years of age (or such higher age as the State has elected under section 1902(l)(1)(D)) for medical assistance under section 1902(a)(10)(A) are not be more restrictive or burdensome than such procedures used for children with higher income under the State child health plan under title XXI.

        ‘(iv) CONDITIONS RELATING TO MINIMUM COVERAGE FOR PARENTS FOR ENHANCED MATCH FOR PARENTS- The conditions described in this clause are the following:

          ‘(I) The State does not apply an income level for parents that is lower than the effective income level (expressed as a percent of the poverty line) that has been specified under the State plan under title XIX (including under a waiver authorized by the Secretary or under section 1902(r)(2)), as of January 1, 2005, to be eligible for medical assistance as a parent under this title.

          ‘(II) The State plans under this title and title XXI do not provide coverage for parents with higher family income without covering parents with a lower family income.

        ‘(v) CONDITIONS FOR ENHANCED MATCH FOR CERTAIN PREGNANT WOMEN- The conditions described in this clause are the following:

          ‘(I) The State has established an effective income eligibility level for pregnant women under subsection (a)(10)(A)(i)(III) or (l)(2)(A) of section 1902 that is at least 185 percent of the poverty line.

          ‘(II) The State plans under this title and title XXI do not provide coverage for pregnant women described in subparagraph (A)(ii) with higher family income without covering such pregnant women with a lower family income.

          ‘(III) The State does not apply an income level for pregnant women that is lower than the effective income level that has been specified under the State plan under subsection (a)(10)(A)(i)(III) or (l)(2)(A) of section 1902, as of January 1, 2005, to be eligible for medical assistance as a pregnant woman.

          ‘(IV) The State satisfies the conditions described in subclauses (I) and (II) of clause (iii).

        ‘(vi) DEFINITIONS- For purposes of this subsection:

          ‘(I) The term ‘parent’ has the meaning given such term for purposes of section 1902(k)(1).

          ‘(II) The term ‘poverty line’ has the meaning given such term in section 2110(c)(5).’.

        (D) APPROPRIATION FROM TITLE XXI ALLOTMENT FOR CERTAIN MEDICAID EXPANSION COSTS- Section 2105(a) of the Social Security Act (42 U.S.C. 1397ee(a)) is amended--

          (i) in paragraph (1), by redesignating subparagraphs (B) through (D) as subparagraphs (C) through (E), respectively, and by inserting after subparagraph (A) the following new subparagraph:

        ‘(B) for medical assistance that is attributable to expenditures described in section 1905(u)(4)(A);’; and

          (ii) in paragraph (2), by adding at the end the following new subparagraph:

        ‘(E) Fifth, for expenditures for items described in paragraph (1)(E).’.

        (E) INCREASING ENHANCED FMAP TO 100 PERCENT FOR FISCAL YEARS 2005 AND 2006 FOR COVERAGE OF PARENTS- Section 2105(b) of such Act (42 U.S.C. 1397ee(b)) is amended by adding at the end the following new sentence: ‘Notwithstanding the previous sentence, the ‘enhanced FMAP’ shall be 100 percent with respect to medical assistance under title XIX for expenditures described in section 1905(u)(4)(A)(i), but only for such assistance furnished during fiscal year 2005 and fiscal year 2006.’.

      (2) UNDER TITLE XXI-

        (A) FAMILYCARE COVERAGE- 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. OPTIONAL FAMILYCARE COVERAGE OF PARENTS OF TARGETED LOW-INCOME CHILDREN.

    ‘(a) OPTIONAL COVERAGE- Notwithstanding any other provision of this title, a State may provide for coverage, through an amendment to its State child health plan under section 2102, of parent health assistance for targeted low-income parents, health care assistance for targeted low-income pregnant women, or both, in accordance with this section, but only if--

      ‘(1) with respect to the provision of parent health assistance, the State meets the conditions described in clause (iii) of section 1905(u)(4)(A);

      ‘(2) with respect to the provision of health care assistance for pregnant women, the State meets the conditions described in clause (iv) of section 1905(u)(4)(A); and

      ‘(3) in the case of parent health assistance for targeted low-income parents, the State elects to provide medical assistance under section 1902(a)(10)(A)(ii)(XIX), under section 1931, or under a waiver under section 1115 to individuals described in section 1902(k)(1)(A)(i) and elects an effective income level that, consistent with paragraphs (1)(B) and (2) of section 1902(k), ensures to the maximum extent possible, that such individuals shall be enrolled in the same program as their children if their children are eligible for coverage under title XIX (including under a waiver authorized by the Secretary or under section 1902(r)(2)).

    ‘(b) DEFINITIONS- For purposes of this title:

      ‘(1) PARENT HEALTH ASSISTANCE- The term ‘parent health assistance’ has the meaning given the term child health assistance in section 2110(a) as if any reference to targeted low-income children were a reference to targeted low-income parents.

      ‘(2) PARENT- The term ‘parent’ has the meaning given the term ‘caretaker relative’ for purposes of carrying out section 1931.

      ‘(3) HEALTH CARE ASSISTANCE FOR PREGNANT WOMEN- The term ‘health care assistance for pregnant women’ has the meaning given the term child health assistance in section 2110(a) as if any reference to targeted low-income children were a reference to targeted low-income pregnant women.

      ‘(4) TARGETED LOW-INCOME PARENT- The term ‘targeted low-income parent’ has the meaning given the term targeted low-income child in section 2110(b) as if the reference to a child were deemed a reference to a parent (as defined in paragraph (3)) of the child; except that in applying such section--

        ‘(A) there shall be substituted for the income level described in paragraph (1)(B)(ii)(I) the applicable income level in effect for a targeted low-income child;

        ‘(B) in paragraph (3), January 1, 2005, shall be substituted for July 1, 1997; and

        ‘(C) in paragraph (4), January 1, 2005, shall be substituted for March 31, 1997.

      ‘(5) TARGETED LOW-INCOME PREGNANT WOMAN- The term ‘targeted low-income pregnant woman’ has the meaning given the term targeted low-income child in section 2110(b) as if any reference to a child were a reference to a woman during pregnancy and through the end of the month in which the 60-day period beginning on the last day of her pregnancy ends; except that in applying such section--

        ‘(A) there shall be substituted for the income level described in paragraph (1)(B)(ii)(I) the applicable income level in effect for a targeted low-income child;

        ‘(B) in paragraph (3), January 1, 2005, shall be substituted for July 1, 1997; and

        ‘(C) in paragraph (4), January 1, 2005, shall be substituted for March 31, 1997.

    ‘(c) REFERENCES TO TERMS AND SPECIAL RULES- In the case of, and with respect to, a State providing for coverage of parent health assistance to targeted low-income parents or health care assistance to targeted low-income pregnant women under subsection (a), the following special rules apply:

      ‘(1) Any reference in this title (other than in subsection (b)) to a targeted low-income child is deemed to include a reference to a targeted low-income parent or a targeted low-income pregnant woman (as applicable).

      ‘(2) Any such reference to child health assistance--

        ‘(A) with respect to such parents is deemed a reference to parent health assistance; and

        ‘(B) with respect to such pregnant women, is deemed a reference to health care assistance for pregnant women.

      ‘(3) In applying section 2103(e)(3)(B) in the case of a family (consisting of a parent and one or more children) provided coverage under this section or a pregnant woman provided coverage under this section without covering other family members, the limitation on total annual aggregate cost-sharing shall be applied to such entire family or such pregnant woman, respectively.

      ‘(4) In applying section 2110(b)(4), any reference to ‘section 1902(l)(2) or 1905(n)(2) (as selected by a State)’ is deemed a reference to the effective income level applicable to parents under section 1931 or under a waiver approved under section 1115, or, in the case of a pregnant woman, the income level established under section 1902(l)(2)(A).

      ‘(5) In applying section 2102(b)(3)(B), any reference to children found through screening to be eligible for medical assistance under the State medicaid plan under title XIX is deemed a reference to parents and pregnant women.’.

        (B) ADDITIONAL ALLOTMENT FOR STATES PROVIDING FAMILYCARE-

          (i) IN GENERAL- Section 2104 of the Social Security Act (42 U.S.C. 1397dd) is amended by inserting after subsection (c) the following:

    ‘(d) ADDITIONAL ALLOTMENTS FOR STATE PROVIDING FAMILYCARE-

      ‘(1) APPROPRIATION; TOTAL ALLOTMENT- For the purpose of providing additional allotments to States to provide FamilyCare coverage under section 2111, there is appropriated, out of any money in the Treasury not otherwise appropriated--

        ‘(A) for fiscal year 2005, $7,000,000,000;

        ‘(B) for fiscal year 2006, $7,000,000,000;

        ‘(C) for fiscal year 2007, $3,000,000,000;

        ‘(D) for fiscal year 2008, $3,000,000,000;

        ‘(E) for fiscal year 2009, $6,000,000,000;

        ‘(F) for fiscal year 2010, $7,000,000,000;

        ‘(G) for fiscal year 2011, $8,000,000,000;

        ‘(H) for fiscal year 2012, $9,000,000,000; and

        ‘(I) for fiscal year 2013 and each fiscal year thereafter, the amount of the allotment provided under this paragraph for the preceding fiscal year increased by the percentage increase (if any) in the medical care expenditure category of the Consumer Price Index for All Urban Consumers (United States city average).

      ‘(2) STATE AND TERRITORIAL ALLOTMENTS-

        ‘(A) IN GENERAL- In addition to the allotments provided under subsections (b) and (c), subject to paragraphs (3) and (4), of the amount available for the additional allotments under paragraph (1) for a fiscal year, the Secretary shall allot to each State with a State child health plan approved under this title--

          ‘(i) in the case of such a State other than a commonwealth or territory described in clause (ii), the same proportion as the proportion of the State’s allotment under subsection (b) (determined without regard to subsection (f)) to 98.95 percent of the total amount of the allotments under such section for such States eligible for an allotment under this subparagraph for such fiscal year; and

          ‘(ii) in the case of a commonwealth or territory described in subsection (c)(3), the same proportion as the proportion of the commonwealth’s or territory’s allotment under subsection (c) (determined without regard to subsection (f)) to 1.05 percent of the total amount of the allotments under such section for commonwealths and territories eligible for an allotment under this subparagraph for such fiscal year.

        ‘(B) AVAILABILITY AND REDISTRIBUTION OF UNUSED ALLOTMENTS- In applying subsections (e) and (f) with respect to additional allotments made available under this subsection, the procedures established under such subsections shall ensure such additional allotments are only made available to States which have elected to provide coverage under section 2111.

      ‘(3) USE OF ADDITIONAL ALLOTMENT- Additional allotments provided under this subsection are not available for amounts expended before October 1, 2004. Such amounts are available for amounts expended on or after such date for child health assistance for targeted low-income children, as well as for parent health assistance for targeted low-income parents, and health care assistance for targeted low-income pregnant women.

      ‘(4) REQUIRING ELECTION TO PROVIDE COVERAGE- No payments may be made to a State under this title from an allotment provided under this subsection unless the State has made an election to provide parent health assistance for targeted low-income parents, or health care assistance for targeted low-income pregnant women.’.

          (ii) CONFORMING AMENDMENTS- Section 2104 of the Social Security Act (42 U.S.C. 1397dd) is amended--

            (I) in subsection (a), by inserting ‘subject to subsection (d),’ after ‘under this section,’;

            (II) in subsection (b)(1), by inserting ‘and subsection (d)’ after ‘Subject to paragraph (4)’; and

            (III) in subsection (c)(1), by inserting ‘subject to subsection (d),’ after ‘for a fiscal year,’.

        (C) NO COST-SHARING FOR PREGNANCY-RELATED BENEFITS- Section 2103(e)(2) of the Social Security Act (42 U.S.C. 1397cc(e)(2)) is amended--

          (i) in the heading, by inserting ‘AND PREGNANCY-RELATED SERVICES’ after ‘PREVENTIVE SERVICES’; and

          (ii) by inserting before the period at the end the following: ‘and for pregnancy-related services’.

      (3) EFFECTIVE DATE- The amendments made by this subsection apply to items and services furnished on or after October 1, 2004, whether or not regulations implementing such amendments have been issued.

    (b) RULES FOR IMPLEMENTATION BEGINNING WITH FISCAL YEAR 2006-

      (1) EXPANSION OF AVAILABILITY OF ENHANCED MATCH UNDER MEDICAID FOR PRE-CHIP EXPANSIONS- Paragraph (4) of section 1905(u) of the Social Security Act (42 U.S.C. 1396d(u)), as inserted by subsection (a)(1)(C), is amended--

        (A) by amending clause (ii) of subparagraph (A) to read as follows:

        ‘(ii) CERTAIN PREGNANT WOMEN- Expenditures for medical assistance for pregnant women under section 1902(l)(1)(A) in a family the income of which exceeds the 133 percent of the income official poverty line, but only if the income level established under section 1902(l)(2) (or under a Statewide waiver under section 1115) for pregnant women is 185 percent of the income official poverty line.’; and

        (B) by adding at the end the following:

      ‘(B) CHILDREN IN FAMILIES WITH INCOME ABOVE MEDICAID MANDATORY LEVEL NOT PREVIOUSLY DESCRIBED- The expenditures described in this subparagraph are expenditures (other than expenditures described in paragraph (2) or (3)) for medical assistance made available to any child who is eligible for assistance under section 1902(a)(10)(A) (other than under clause (i)) and the income of whose family exceeds the minimum income level required under subsection 1902(l)(2) (or, if higher, the minimum level required under section 1931 for that State) for a child of the age involved (treating any child who is 19 or 20 years of age as being 18 years of age).’.

      (2) OFFSET OF ADDITIONAL EXPENDITURES FOR ENHANCED MATCH FOR PRE-CHIP EXPANSION- Section 1905 of the Social Security Act (42 U.S.C. 1396d) is amended--

        (A) in the fourth sentence of subsection (b), by inserting ‘(except in the case of expenditures described in subsection (u)(5))’ after ‘do not exceed’;

        (B) in subsection (u), by inserting after paragraph (4) (as inserted by subparagraph (C)), the following:

    ‘(5) For purposes of the fourth sentence of subsection (b) and section 2105(a), the following payments under this title do not count against a State’s allotment under section 2104:

      ‘(A) REGULAR FMAP FOR EXPENDITURES FOR PREGNANT WOMEN WITH INCOME ABOVE 133 PERCENT OF POVERTY- The portion of the payments made for expenditures described in paragraph (4)(A)(ii) that represents the amount that would have been paid if the enhanced FMAP had not been substituted for the Federal medical assistance percentage.

      ‘(B) FAMILYCARE PARENTS- Payments for expenditures described in paragraph (4)(A)(i).

      ‘(C) REGULAR FMAP FOR EXPENDITURES FOR CERTAIN CHILDREN IN FAMILIES WITH INCOME ABOVE MEDICAID MANDATORY LEVEL- The portion of the payments made for expenditures described in paragraph (4)(B) that represents the amount that would have been paid if the enhanced FMAP had not been substituted for the Federal medical assistance percentage.’.

        (B) CONFORMING AMENDMENTS- Subparagraph (B) of section 2105(a)(1) of the Social Security Act, as amended by subsection (a)(1)(D), is amended to read as follows:

        ‘(B) CERTAIN FAMILYCARE PARENTS AND OTHERS- Expenditures for medical assistance that is attributable to expenditures described in section 1905(u)(4), except as provided in section 1905(u)(5).’.

      (3) EFFECTIVE DATE- The amendments made by this subsection apply as of October 1, 2005, to fiscal years beginning on or after such date and to expenditures under the State plan on and after such date, whether or not regulations implementing such amendments have been issued.

    (c) MAKING TITLE XXI BASE ALLOTMENTS PERMANENT- Section 2104(a) of the Social Security Act (42 U.S.C. 1397dd(a)) is amended--

      (1) by striking ‘and’ at the end of paragraph (9);

      (2) by striking the period at the end of paragraph (10) and inserting ‘; and’; and

      (3) by adding at the end the following:

      ‘(11) for fiscal year 2008 and each fiscal year thereafter, the amount of the allotment provided under this subsection for the preceding fiscal year increased by the percentage increase (if any) in the medical care expenditure category of the Consumer Price Index for All Urban Consumers (United States city average).’.

    (d) GAO STUDY-

      (1) STUDY- The Comptroller General of the United States shall conduct a study regarding funding under title XXI of the Social Security Act that examines--

        (A) the adequacy of overall funding under such title;

        (B) the formula for determining allotments and for redistribution of unspent funds under such title; and

        (C) the effect of waiting lists and caps on enrollment under such title.

      (2) REPORT- Not later than July 1, 2006, the Comptroller General shall submit a report on the study conducted under paragraph (1). Such report shall include recommendations regarding a better mechanism for determining State allotments and redistribution of unspent funds under such title in order to ensure all eligible families in need can access coverage through such title.

    (e) CONFORMING AMENDMENTS-

      (1) ELIGIBILITY CATEGORIES- Section 1905(a) of the Social Security 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 inserting ‘or’ at the end of clause (xiii); and

        (C) by inserting after clause (xiii) the following:

      ‘(xiv) who are parents described (or treated as if described) in section 1902(k)(1),’.

      (2) INCOME LIMITATIONS- Section 1903(f)(4) of the Social Security Act (42 U.S.C. 1396b(f)(4)) is amended--

        (A) effective October 1, 2005, by inserting ‘1902(a)(10)(A)(i)(VIII),’ after ‘1902(a)(10)(A)(i)(VII),’; and

        (B) by inserting ‘1902(a)(10)(A)(ii)(XIX),’ after ‘1902(a)(10)(A)(ii)(XVIII),’.

      (3) CONFORMING AMENDMENT RELATING TO NO WAITING PERIOD FOR PREGNANT WOMEN- Section 2102(b)(1)(B) of the Social Security Act (42 U.S.C. 1397bb(b)(1)(B)) is amended--

        (A) by striking ‘, and’ at the end of clause (i) and inserting a semicolon;

        (B) by striking the period at the end of clause (ii) and inserting ‘; and’; and

        (C) by adding at the end the following:

          ‘(iii) may not apply a waiting period (including a waiting period to carry out paragraph (3)(C)) in the case of a targeted low-income parent who is pregnant.’.

SEC. 223. AUTOMATIC ENROLLMENT OF CHILDREN BORN TO TITLE XXI PARENTS.

    Section 2102(b)(1) of the Social Security Act (42 U.S.C. 1397bb(b)(1)) is amended by adding at the end the following:

        ‘(C) AUTOMATIC ELIGIBILITY OF CHILDREN BORN TO A PARENT BEING PROVIDED FAMILYCARE- Such eligibility standards shall provide for automatic coverage of a child born to an individual who is provided assistance under this title in the same manner as medical assistance would be provided under section 1902(e)(4) to a child described in such section.’.

SEC. 224. ALLOWING STATES TO SIMPLIFY RULES FOR FAMILIES.

    (a) PRESUMPTIVE ELIGIBILITY-

      (1) APPLICATION TO PRESUMPTIVE ELIGIBILITY FOR PREGNANT WOMEN UNDER MEDICAID- Section 1920(b) of the Social Security Act (42 U.S.C. 1396r-1(b)) is amended by adding at the end after and below paragraph (2) the following flush sentence:

    ‘The term ‘qualified provider’ includes a qualified entity as defined in section 1920A(b)(3).’.

      (2) OPTIONAL APPLICATION OF PRESUMPTIVE ELIGIBILITY PROVISIONS TO PARENTS- Section 1920A of the Social Security Act (42 U.S.C. 1396r-1a) is amended by adding at the end the following:

    ‘(e) A State may elect to apply the previous provisions of this section to provide for a period of presumptive eligibility for medical assistance for a parent of a child with respect to whom such a period is provided under this section.’.

      (3) APPLICATION UNDER TITLE XXI- Section 2107(e)(1)(D) of the Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended to read as follows:

        ‘(D) Sections 1920 and 1920A (relating to presumptive eligibility).’.

    (b) 12-MONTHS CONTINUOUS ELIGIBILITY-

      (1) MEDICAID- Section 1902(e)(12) of the Social Security Act (42 U.S.C. 1396a(e)(12)) is amended--

        (A) by striking ‘At the option of the State, the plan may’ and inserting ‘The plan shall’;

        (B) by striking ‘an age specified by the State (not to exceed 19 years of age)’ and inserting ‘19 years of age (or such higher age as the State has elected under subsection (l)(1)(D)) or, at the option of the State, who is eligible for medical assistance as the parent of such a child’; and

        (C) in subparagraph (A), by striking ‘a period (not to exceed 12 months) ’ and inserting ‘the 12-month period beginning on the date’.

      (2) TITLE XXI- Section 2102(b)(2) of such Act (42 U.S.C. 1397bb(b)(2)) is amended by adding at the end the following: ‘Such methods shall provide continuous eligibility for children under this title in a manner that is no less generous than the 12-months continuous eligibility provided under section 1902(e)(12) for children described in such section under title XIX. If a State has elected to apply section 1902(e)(12) to parents, such methods may provide continuous eligibility for parents under this title in a manner that is no less generous than the 12-months continuous eligibility provided under such section for parents described in such section under title XIX.’.

      (3) EFFECTIVE DATE- The amendments made by this subsection shall take effect on July 1, 2005, whether or not regulations implementing such amendments have been issued.

    (c) PROVISION OF MEDICAID AND CHIP APPLICATIONS AND INFORMATION UNDER THE SCHOOL LUNCH PROGRAM- Section 9(b)(2)(B) of the Richard B. Russell National School Lunch Act (42 U.S.C. 1758(b)(2)(B)) is amended--

      (1) by striking ‘(B) Applications’ and inserting ‘(B)(i) Applications’; and

      (2) by adding at the end the following:

    ‘(ii)(I) Applications for free and reduced price lunches that are distributed pursuant to clause (i) to parents or guardians of children in attendance at schools participating in the school lunch program under this Act shall also contain information on the availability of medical assistance under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) and of child health and FamilyCare assistance under title XXI of such Act, including information on how to obtain an application for assistance under such programs.

    ‘(II) Information on the programs referred to in subclause (I) shall be provided on a form separate from the application form for free and reduced price lunches under clause (i).’.

SEC. 225. REVISION AND SIMPLIFICATION OF THE TRANSITIONAL MEDICAL ASSISTANCE PROGRAM (TMA).

    (a) MAKING REPORTING REQUIREMENTS OPTIONAL; OPTION OF EXTENDED ELIGIBILITY-

      (1) OPTION FOR MAKING REPORTING REQUIREMENTS OPTIONAL- Section 1925(b) of the Social Security Act (42 U.S.C. 1396r-6(b)) is amended--

        (A) in paragraph (1), by inserting ‘, at the option of a State,’ after ‘and which’;

        (B) in paragraph (2)(A), by inserting ‘Subject to subparagraph (C)--’ after ‘(A) NOTICES- ’;

        (C) in paragraph (2)(B), by inserting ‘Subject to subparagraph (C)--’ after ‘(B) REPORTING REQUIREMENTS- ’;

        (D) by adding at the end the following new subparagraph:

        ‘(C) STATE OPTION TO WAIVE NOTICE AND REPORTING REQUIREMENTS- A State may waive some or all of the reporting requirements under clauses (i) and (ii) of subparagraph (B). Insofar as it waives such a reporting requirement, the State need not provide for a notice under subparagraph (A) relating to such requirement.’; and

        (E) in paragraph (3)(A)(iii), by inserting ‘the State has not waived under paragraph (2)(C) the reporting requirement with respect to such month under paragraph (2)(B) and if’ after ‘6-month period if’.

      (2) STATE OPTION TO EXTEND ELIGIBILITY FOR LOW-INCOME INDIVIDUALS FOR UP TO 12 ADDITIONAL MONTHS- Section 1925 of such Act (42 U.S.C. 1396r-6) is further amended--

        (A) by redesignating subsections (c) through (f) as subsections (d) through (g); and

        (B) by inserting after subsection (b) the following new subsection:

    ‘(c) STATE OPTION OF UP TO 12 MONTHS OF ADDITIONAL ELIGIBILITY-

      ‘(1) IN GENERAL- Notwithstanding any other provision of this title, each State plan approved under this title may provide, at the option of the State, that the State shall offer to each family which received assistance during the entire 6-month period under subsection (b) and which meets the applicable requirement of paragraph (2), in the last month of the period the option of extending coverage under this subsection for the succeeding period not to exceed 12 months.

      ‘(2) INCOME RESTRICTION- The option under paragraph (1) shall not be made available to a family for a succeeding period unless the State determines that the family’s average gross monthly earnings (less such costs for such child care as is necessary for the employment of the caretaker relative) as of the end of the 6-month period under subsection (b) does not exceed 185 percent of the 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.

      ‘(3) APPLICATION OF EXTENSION RULES- The provisions of paragraphs (2), (3), (4), and (5) of subsection (b) shall apply to the extension provided under this subsection in the same manner as they apply to the extension provided under subsection (b)(1), except that for purposes of this subsection--

        ‘(A) any reference to a 6-month period under subsection (b)(1) is deemed a reference to the extension period provided under paragraph (1) and any deadlines for any notices or reporting and the premium payment periods shall be modified to correspond to the appropriate calendar quarters of coverage provided under this subsection; and

        ‘(B) any reference to a provision of subsection (a) or (b) is deemed a reference to the corresponding provision of subsection (b) or of this subsection, respectively.’.

    (b) State Option To Waive Receipt of Medicaid for 3 of Previous 6 Months To Qualify for TMA- Section 1925(a)(1) of such Act (42 U.S.C. 1396r-6(a)(1)) is amended by adding at the end the following: ‘A State may, at its option, also apply the previous sentence in the case of a family that was receiving such aid for fewer than 3 months, or that had applied for and was eligible for such aid for fewer than 3 months, during the 6 immediately preceding months described in such sentence.’.

    (c) ELIMINATION OF SUNSET FOR TMA-

      (1) Subsection (g) of section 1925 of such Act (42 U.S.C. 1396r-6), as redesignated under subsection (a)(2), is repealed.

      (2) Section 1902(e)(1) of such Act (42 U.S.C. 1396a(e)(1)) is amended by striking ‘(A) Nothwithstanding’ and all that follows through ‘During such period, for’ in subparagraph (B) and inserting ‘For’.

    (d) CMS REPORT ON ENROLLMENT AND PARTICIPATION RATES UNDER TMA- Section 1925 of such Act, as amended by subsections (a)(2) and (c)(1), is amended by adding at the end the following new subsection:

    ‘(g) ADDITIONAL PROVISIONS-

      ‘(1) COLLECTION AND REPORTING OF PARTICIPATION INFORMATION- Each State shall--

        ‘(A) collect and submit to the Secretary, in a format specified by the Secretary, information on average monthly enrollment and average monthly participation rates for adults and children under this section; and

        ‘(B) make such information publicly available.

      Such information shall be submitted under subparagraph (A) at the same time and frequency in which other enrollment information under this title is submitted to the Secretary. Using such information, the Secretary shall submit to Congress annual reports concerning such rates.’.

    (e) COORDINATION OF WORK- Section 1925(g) of such Act, as added by subsection (d), is amended by adding at the end the following new paragraph:

      ‘(2) COORDINATION WITH ADMINISTRATION FOR CHILDREN AND FAMILIES- The Administrator of the Centers for Medicare & Medicaid Services, in carrying out this section, shall work with the Assistant Secretary for the Administration for Children and Families to develop guidance or other technical assistance for States regarding best practices in guaranteeing access to transitional medical assistance under this section.’.

    (f) ELIMINATION OF TMA REQUIREMENT FOR STATES THAT EXTEND COVERAGE TO CHILDREN AND PARENTS THROUGH 185 PERCENT OF POVERTY-

      (1) IN GENERAL- Section 1925 of such Act is further amended by adding at the end the following new subsection:

    ‘(h) PROVISIONS OPTIONAL FOR STATES THAT EXTEND COVERAGE TO CHILDREN AND PARENTS THROUGH 185 PERCENT OF POVERTY- A State may (but is not required to) meet the requirements of subsections (a) and (b) if it provides for medical assistance under section 1931 to families (including both children and caretaker relatives) the average gross monthly earning of which (less such costs for such child care as is necessary for the employment of a caretaker relative) is at or below a level that is at least 185 percent of the 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.’.

      (2) CONFORMING AMENDMENTS- Such section is further amended, in subsections (a)(1) and (b)(1), by inserting ‘, but subject to subsection (h),’ after ‘Notwithstanding any other provision of this title,’ each place it appears.

    (g) EXTENDING USE OF OUTSTATIONED WORKERS TO ACCEPT APPLICATIONS FOR TRANSITIONAL MEDICAL ASSISTANCE- Section 1902(a)(55) of such Act (42 U.S.C. 1396a(a)(55)) is amended by inserting ‘and under section 1931’ after ‘(a)(10)(A)(ii)(IX)’.

    (h) EFFECTIVE DATES- (1) Except as provided in this subsection, the amendments made by this section shall apply to calendar quarters beginning on or after the date of the enactment of this Act, without regard to whether or not final regulations to carry out such amendments have been promulgated by such date.

    (2) In the case of a State plan for medical assistance under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirements imposed by the amendments made by this section, the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet these 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.

SEC. 226. LIMITATIONS ON CONFLICTS OF INTEREST.

    (a) LIMITATION ON CONFLICTS OF INTEREST IN MARKETING ACTIVITIES-

      (1) TITLE XXI- Section 2105(c) of the Social Security Act (42 U.S.C. 300aa-5(c)) is amended by adding at the end the following:

      ‘(8) LIMITATION ON EXPENDITURES FOR MARKETING ACTIVITIES- Amounts expended by a State for the use of an administrative vendor in marketing health benefits coverage to low-income children under this title shall not be considered, for purposes of subsection (a)(2)(D), to be reasonable costs to administer the plan unless the following conditions are met with respect to the vendor:

        ‘(A) The vendor is independent of any entity offering the coverage in the same area of the State in which the vendor is conducting marketing activities.

        ‘(B) No person who is an owner, employee, consultant, or has a contract with the vendor either has any direct or indirect financial interest with such an entity or has been excluded from participation in the program under this title or title XVIII or XIX or debarred by any Federal agency, or subject to a civil money penalty under this Act.’.

    (b) PROHIBITION OF AFFILIATION WITH DEBARRED INDIVIDUALS-

      (1) MEDICAID- Section 1903(i) of the Social Security Act (42 U.S.C. 1396b(i))is amended--

        (A) by striking the period at the end of paragraph (20) and inserting ‘; or’; and

        (B) by inserting after paragraph (20) the following:

      ‘(21) with respect to any amounts expended for an entity that receives payments under the plan unless--

        ‘(A) no person with an ownership or control interest (as defined in section 1124(a)(3)) in the entity is a person that is debarred, suspended, or otherwise excluded from participating in procurement or non-procurement activities under the Federal Acquisition Regulation; and

        ‘(B) such entity has not entered into an employment, consulting, or other agreement for the provision of items or services that are material to such entity’s obligations under the plan with a person described in subparagraph (A).’.

      (2) TITLE XXI- Section 2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended

        (A) in subparagraph (B), by striking ‘and (17)’ and inserting ‘(17), and (21)’; and

        (B) by adding at the end the following:

        ‘(E) Section 1902(a)(67) (relating to prohibition of affiliation with debarred individuals).’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to expenditures made on or after July 1, 2005, whether or not regulations implementing such amendments have been issued.

SEC. 227. INCREASE IN CHIP ALLOTMENT FOR EACH OF FISCAL YEARS 2002 THROUGH 2004.

    Effective as if included in the enactment of the Balanced Budget Act of 1997, paragraphs (5), (6), and (7) of section 2104(a) of the Social Security Act (42 U.S.C. 1397dd(a)) are amended by striking ‘$3,150,000,000’ each place it appears and inserting ‘$4,150,000,000’.

SEC. 228. DEMONSTRATION PROGRAMS TO IMPROVE MEDICAID AND CHIP OUTREACH TO HOMELESS INDIVIDUALS AND FAMILIES.

    (a) AUTHORITY- The Secretary of Health and Human Services may award demonstration grants to not more than 7 States (or other qualified entities) to conduct innovative programs that are designed to improve outreach to homeless individuals and families under the programs described in subsection (b) with respect to enrollment of such individuals and families under such programs and the provision of services (and coordinating the provision of such services) under such programs.

    (b) PROGRAMS FOR HOMELESS DESCRIBED- The programs described in this subsection are as follows:

      (1) MEDICAID- The program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).

      (2) CHIP- The program under title XXI of the Social Security Act (42 U.S.C. 1397aa et seq.).

      (3) TANF- The program under part of A of title IV of the Social Security Act (42 U.S.C. 601 et seq.).

      (4) SAMHSA BLOCK GRANTS- The program of grants under part B of title XIX of the Public Health Service Act (42 U.S.C. 300x-1 et seq.).

      (5) FOOD STAMP PROGRAM- The program under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).

      (6) WORKFORCE INVESTMENT ACT- The program under the Workforce Investment Act of 1999 (29 U.S.C. 2801 et seq.).

      (7) WELFARE-TO-WORK- The welfare-to-work program under section 403(a)(5) of the Social Security Act (42 U.S.C. 603(a)(5)).

      (8) OTHER PROGRAMS- Other public and private benefit programs that serve low-income individuals.

    (c) APPROPRIATIONS- For the purposes of carrying out this section, there is appropriated for fiscal year 2005, out of any funds in the Treasury not otherwise appropriated, $10,000,000, to remain available until expended.

SEC. 229. ADDITIONAL CHIP REVISIONS.

    (a) LIMITING COST-SHARING TO 2.5 PERCENT FOR FAMILIES WITH INCOME BELOW 150 PERCENT OF POVERTY- Section 2103(e)(3)(A) of the Social Security Act (42 U.S.C. 1397cc(e)(3)(A)) is amended--

      (1) by striking ‘and’ at the end of clause (i);

      (2) by striking the period at the end of clause (ii) and inserting ‘; and’; and

      (3) by adding at the end the following new clause:

          ‘(iii) total annual aggregate cost-sharing described in clauses (i) and (ii) with respect to all such targeted low-income children in a family under this title that exceeds 2.5 percent of such family’s income for the year involved.’.

    (b) EMPLOYER COVERAGE WAIVER CHANGES- Section 2105(c)(3) of such Act (42 U.S.C. 1397ee(c)(3)) is amended--

      (1) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii) and indenting appropriately;

      (2) by designating the matter beginning with ‘Payment may be made’ as a subparagraph (A) with the heading ‘IN GENERAL’ and indenting appropriately; and

      (3) by adding at the end the following new subparagraph:

        ‘(B) APPLICATION OF REQUIREMENTS- In carrying out subparagraph (A)--

          ‘(i) in determining cost-effectiveness, the Secretary shall measure against family coverage costs to the extent that a State has expanded coverage to parents pursuant to section 2111;

          ‘(ii) subject to clause (iii), the State shall provide satisfactory assurances that the minimum benefits and cost-sharing protections established under this title are provided, either through the coverage under subparagraph (A) or as a supplement to such coverage; and

          ‘(iii) coverage under such subparagraph shall not be considered to violate clause (ii) because it does not comply with requirements relating to reviews of health service decisions if the enrollee involved is provided the option of being provided benefits directly under this title.’.

    (c) EFFECTIVE DATE- The amendments made by this section apply as of January 1, 2005, whether or not regulations implementing such amendments have been issued.

SEC. 230. INCREASED FEDERAL REIMBURSEMENT FOR LANGUAGE SERVICES UNDER THE MEDICAID PROGRAM AND TITLE XXI.

    (a) MEDICAID- 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) 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; plus’.

    (b) SCHIP- Section 2105(a)(1) of the Social Security Act (42 U.S.C.1397ee(a)) is amended--

      (1) in the matter preceding subparagraph (A), by inserting ‘or, in the case of expenditures described in subparagraph (D)(iv), 90 percent’ after ‘enhanced FMAP’; and

      (2) in subparagraph (D)--

        (A) in clause (iii), by striking ‘and’ at the end;

        (B) be redesignating clause (iv) as clause (v); and

        (C) by inserting after clause (iii) the following:

          ‘(iv) 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 take effect on January 1, 2005.

TITLE III--NATIONAL CENTER FOR EVIDENCE-BASED HEALTHCARE PRACTICES

SEC. 301. ESTABLISHMENT OF CENTER.

    Part E of title IV of the Public Health Service Act (42 U.S.C. 287 et seq.) is amended by adding at the end the following subpart:

‘Subpart 7--National Center for Evidence-Based Healthcare Practices

‘SEC. 485J. PURPOSE OF CENTER.

    ‘(a) In General- The general purpose of the National Center for Evidence-Based Healthcare Practices (in this subpart referred to as the ‘Center’) is the establishment of national standards for healthcare practices that are based on scientific evidence developed through the conduct of research and the collection of data (in this subpart referred to as ‘evidence-based practices’).

    ‘(b) Certain Duties- With respect to evidence-based practices established under subsection (a), the Director of the Center--

      ‘(1) shall disseminate the practices and provide general information on the practices to the public and health professionals;

      ‘(2) may conduct and support programs for training health professionals with respect to the practices; and

      ‘(3) may provide to healthcare entities technical assistance regarding the practices.

    ‘(c) Authorization of Appropriations- For the purpose of carrying out this section, there are authorized to be appropriated such sums as may be necessary for each of the fiscal years 2005 through 2009.’