To amend titles XIX and XXI of the Social Security Act to provide States with the option to expand or add coverage of pregnant women under the medicaid and State children's health insurance programs, and for other purposes.

April 5, 2005

Mrs. LINCOLN (for herself, Mr. LUGAR, and Mr. BINGAMAN) introduced the following bill; which was read twice and referred to the Committee on Finance

To amend titles XIX and XXI of the Social Security Act to provide States with the option to expand or add coverage of pregnant women under the medicaid and State children's health insurance 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.

This Act may be cited as the `Prevent Prematurity and Improve Child Health Act of 2005'.

SEC. 2. STATE OPTION TO EXPAND OR ADD COVERAGE OF CERTAIN PREGNANT WOMEN UNDER MEDICAID AND SCHIP.

(a) Medicaid-

(1) AUTHORITY TO EXPAND COVERAGE- Section 1902(l)(2)(A)(i) of the Social Security Act (42 U.S.C. 1396a(l)(2)(A)(i)) is amended by inserting `(or such higher percentage as the State may elect for purposes of expenditures for medical assistance for pregnant women described in section 1905(u)(4)(A))' after `185 percent'.

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

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

(B) in subsection (u)--

(i) by redesignating paragraph (4) as paragraph (5); and

(ii) by inserting after paragraph (3) the following new paragraph:

`(4) For purposes of the fourth sentence of subsection (b) and section 2105(a), the expenditures described in this paragraph are the following:

`(A) CERTAIN PREGNANT WOMEN- If the conditions described in subparagraph (B) are met, expenditures for medical assistance for pregnant women described in subsection (n) or in section 1902(l)(1)(A) in a family the income of which exceeds 185 percent of the poverty line, but does not exceed the income eligibility level established under title XXI for a targeted low-income child.

`(B) CONDITIONS- The conditions described in this subparagraph are the following:

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

`(ii) The State does not apply an effective income level for pregnant women that is lower than the effective income level (expressed as a percent of the poverty line and considering applicable income disregards) 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.

`(C) DEFINITION OF POVERTY LINE- In this subsection, the term `poverty line' has the meaning given such term in section 2110(c)(5).'.

(3) PAYMENT FROM TITLE XXI ALLOTMENT FOR MEDICAID EXPANSION COSTS; ELIMINATION OF COUNTING MEDICAID CHILD PRESUMPTIVE ELIGIBILITY COSTS AGAINST TITLE XXI ALLOTMENT- Section 2105(a)(1) of the Social Security Act (42 U.S.C. 1397ee(a)(1)) is amended--

(A) in the matter preceding subparagraph (A), by striking `(or, in the case of expenditures described in subparagraph (B), the Federal medical assistance percentage (as defined in the first sentence of section 1905(b)))'; and

(B) by striking subparagraph (B) and inserting the following new subparagraph:

`(B) for the provision of medical assistance that is attributable to expenditures described in section 1905(u)(4)(A);'.

(b) SCHIP-

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

`SEC. 2111. OPTIONAL COVERAGE OF TARGETED LOW-INCOME PREGNANT WOMEN.

`(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 pregnancy-related assistance for targeted low-income pregnant women in accordance with this section, but only if--

`(1) the State has established an 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 income official poverty line; and

`(2) the State meets the conditions described in section 1905(u)(4)(B).

`(b) Definitions- For purposes of this title:

`(1) PREGNANCY-RELATED ASSISTANCE- The term `pregnancy-related 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 pregnant women, except that the assistance shall be limited to services related to pregnancy (which include prenatal, delivery, and postpartum services and services described in section 1905(a)(4)(C)) and to other conditions that may complicate pregnancy.

`(2) TARGETED LOW-INCOME PREGNANT WOMAN- The term `targeted low-income pregnant woman' means a woman--

`(A) during pregnancy and through the end of the month in which the 60-day period (beginning on the last day of her pregnancy) ends;

`(B) whose family income exceeds the effective income level (expressed as a percent of the poverty line and considering applicable income disregards) that has been specified 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 under title XIX but does not exceed the income eligibility level established under the State child health plan under this title for a targeted low-income child; and

`(C) who satisfies the requirements of paragraphs (1)(A), (1)(C), (2), and (3) of section 2110(b) in the same manner as a child applying for child health assistance would have to satisfy such requirements.

`(c) References to Terms and Special Rules- In the case of, and with respect to, a State providing for coverage of pregnancy-related 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 pregnant woman.

`(2) Any such reference to child health assistance with respect to such women is deemed a reference to pregnancy-related assistance.

`(3) Any such reference to a child is deemed a reference to a woman during pregnancy and the period described in subsection (b)(2)(A).

`(4) 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 pregnant women.

`(5) There shall be no exclusion of benefits for services described in subsection (b)(1) based on any preexisting condition and no waiting period (including any waiting period imposed to carry out section 2102(b)(3)(C)) shall apply.

`(6) Subsection (a) of section 2103 (relating to required scope of health insurance coverage) shall not apply insofar as a State limits coverage to services described in subsection (b)(1) and the reference to such section in section 2105(a)(1)(C) is deemed not to require, in such case, compliance with the requirements of section 2103(a).

`(7) In applying section 2103(e)(3)(B) in the case of a pregnant woman provided coverage under this section, the limitation on total annual aggregate cost-sharing shall be applied to such pregnant woman.

`(8) The reference in section 2107(e)(1)(D) to section 1920A (relating to presumptive eligibility for children) is deemed a reference to section 1920 (relating to presumptive eligibility for pregnant women).

`(d) Automatic Enrollment for Children Born to Women Receiving Pregnancy-Related Assistance- If a child is born to a targeted low-income pregnant woman who was receiving pregnancy-related assistance under this section on the date of the child's birth, the child shall be deemed to have applied for child health assistance under the State child health plan and to have been found eligible for such assistance under such plan or to have applied for medical assistance under title XIX and to have been found eligible for such assistance under such title, as appropriate, on the date of such birth and to remain eligible for such assistance until the child attains 1 year of age. During the period in which a child is deemed under the preceding sentence to be eligible for child health or medical assistance, the child health or medical assistance eligibility identification number of the mother shall also serve as the identification number of the child, and all claims shall be submitted and paid under such number (unless the State issues a separate identification number for the child before such period expires).'.

(2) ADDITIONAL ALLOTMENTS FOR PROVIDING COVERAGE OF PREGNANT WOMEN-

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

`(d) Additional Allotments for Providing Coverage of Pregnant Women-

`(1) APPROPRIATION; TOTAL ALLOTMENT- For the purpose of providing additional allotments to States under this title, there is appropriated, out of any money in the Treasury not otherwise appropriated, for each of fiscal years 2006 and 2007, $200,000,000.

`(2) STATE AND TERRITORIAL ALLOTMENTS- 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--

`(A) in the case of such a State other than a commonwealth or territory described in subparagraph (B), the same proportion as the proportion of the State's allotment under subsection (b) (determined without regard to subsection (f)) to the total amount of the allotments under subsection (b) for such States eligible for an allotment under this paragraph for such fiscal year; and

`(B) 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 the total amount of the allotments under subsection (c) for commonwealths and territories eligible for an allotment under this paragraph for such fiscal year.

`(3) USE OF ADDITIONAL ALLOTMENT- Additional allotments provided under this subsection are not available for amounts expended before October 1, 2005. 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 pregnancy-related assistance for targeted low-income pregnant women.

`(4) NO PAYMENTS UNLESS ELECTION TO EXPAND COVERAGE OF PREGNANT WOMEN- No payments may be made to a State under this title from an allotment provided under this subsection unless the State provides pregnancy-related assistance for targeted low-income pregnant women under this title, or provides medical assistance for pregnant women under title XIX, whose family income 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.'.

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

(i) in subsection (a), in the matter preceding paragraph (1), 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,'.

(3) ADDITIONAL CONFORMING AMENDMENTS-

(A) 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 `OR PREGNANCY-RELATED SERVICES' after `PREVENTIVE SERVICES'; and

(ii) by inserting before the period at the end the following: `or for pregnancy-related services'.

(B) NO WAITING PERIOD- Section 2102(b)(1)(B) (42 U.S.C. 1397bb(b)(1)(B)) is amended--

(i) in clause (i), by striking `, and' at the end and inserting a semicolon;

(ii) in clause (ii), by striking the period at the end and inserting `; and'; and

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

`(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 pregnant woman.'.

(c) Authority for States That Provide Medicaid or SCHIP Coverage for Pregnant Women With Income Above 185 Percent of the Poverty Line to Use Portion of SCHIP Funds for Medicaid Expenditures- Section 2105(g) of the Social Security Act (42 U.S.C. 1397ee(g)) is amended--

(1) in the subsection heading, by inserting `and Certain Pregnancy Coverage Expansion States' after `Qualifying States';

(2) by adding at the end the following:

`(4) SPECIAL AUTHORITY FOR CERTAIN PREGNANCY COVERAGE EXPANSION STATES-

`(A) IN GENERAL- In the case of a State that, as of the date of enactment of the Prevent Prematurity and Improve Child Health Act of 2005, has an income eligibility standard under title XIX or this title (under section 1902(a)(10)(A) or under a statewide waiver in effect under section 1115 with respect to title XIX or this title) that is at least 185 percent of the poverty line with respect to pregnant women, the State may elect to use not more than 20 percent of any allotment under section 2104 for any fiscal year (insofar as it is available under any subsection of such section) for payments under title XIX in accordance with subparagraph (B), instead of for expenditures under this title.

`(B) PAYMENTS TO STATES-

`(i) IN GENERAL- In the case of a State described in subparagraph (A) that has elected the option described in that subparagraph, subject to the availability of funds under such subparagraph and, if applicable, paragraph (1)(A), with respect to the State, the Secretary shall pay the State an amount each quarter equal to the additional amount that would have been paid to the State under title XIX with respect to expenditures described in clause (ii) if the enhanced FMAP (as determined under subsection (b)) had been substituted for the Federal medical assistance percentage (as defined in section 1905(b)).

`(ii) EXPENDITURES DESCRIBED- For purposes of this subparagraph, the expenditures described in this clause are expenditures, made after the date of the enactment of this paragraph and during the period in which funds are available to the State for use under subparagraph (A), for medical assistance under title XIX for pregnant women whose family income is at least 185 percent of the poverty line.

`(iii) NO IMPACT ON DETERMINATION OF BUDGET NEUTRALITY FOR WAIVERS- In the case of a State described in subparagraph (A) that uses amounts paid under this paragraph for expenditures described in clause (ii) that are incurred under a waiver approved for the State, any budget neutrality determinations with respect to such waiver shall be determined without regard to such amounts paid.'; and

(3) in paragraph (3), by striking `and (2)' and inserting `(2), and (4)'.

(d) Other Amendments to Medicaid-

(1) ELIGIBILITY OF A NEWBORN- Section 1902(e)(4) of the Social Security Act (42 U.S.C. 1396a(e)(4)) is amended in the first sentence by striking `so long as the child is a member of the woman's household and the woman remains (or would remain if pregnant) eligible for such assistance'.

(2) APPLICATION OF QUALIFIED ENTITIES 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 after paragraph (2) the following flush sentence:

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

(e) Effective Date- The amendments made by this section apply to items and services furnished on or after October 1, 2005, without regard to whether regulations implementing such amendments have been promulgated.

SEC. 3. OPTIONAL COVERAGE OF LEGAL IMMIGRANTS UNDER THE MEDICAID PROGRAM AND SCHIP.

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

(1) in paragraph (1), by striking `paragraph (2)' and inserting `paragraphs (2) and (4)'; and

(2) by adding at the end the following new paragraph:

`(4)(A) A State may elect (in a plan amendment under this title) to provide medical assistance under this title for aliens who are lawfully residing in the United States (including battered aliens described in section 431(c) of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996) and who are otherwise eligible for such assistance, within any of the following eligibility categories:

`(i) PREGNANT WOMEN- Women during pregnancy (and during the 60-day period beginning on the last day of the pregnancy).

`(ii) CHILDREN- Children (as defined under such plan), including optional targeted low-income children described in section 1905(u)(2)(B).

`(B)(i) In the case of a State that has elected to provide medical assistance to a category of aliens under subparagraph (A), no debt shall accrue under an affidavit of support against any sponsor of such an alien on the basis of provision of assistance to such category and the cost of such assistance shall not be considered as an unreimbursed cost.

`(ii) The provisions of sections 401(a), 402(b), 403, and 421 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 shall not apply to a State that makes an election under subparagraph (A).'.

(b) Title XXI- Section 2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)) is amended by adding at the end the following new subparagraph:

`(E) Section 1903(v)(4) (relating to optional coverage of permanent resident alien pregnant women and children), but only with respect to an eligibility category under this title, if the same eligibility category has been elected under such section for purposes of title XIX.'.

(c) Effective Date- The amendments made by this section take effect on October 1, 2005, and apply to medical assistance and child health assistance furnished on or after such date.

SEC. 4. PROMOTING CESSATION OF TOBACCO USE UNDER THE MEDICAID PROGRAM.

(a) Dropping Exception From Medicaid Prescription Drug Coverage for Tobacco Cessation Medications- Section 1927(d)(2) of the Social Security Act (42 U.S.C. 1396r-8(d)(2)) is amended--

(1) by striking subparagraph (E);

(2) by redesignating subparagraphs (F) through (J) as subparagraphs (E) through (I), respectively; and

(3) in subparagraph (F) (as redesignated by paragraph (2)), by inserting before the period at the end the following: `, except agents approved by the Food and Drug Administration for purposes of promoting, and when used to promote, tobacco cessation'.

(b) Requiring Coverage of Tobacco Cessation Counseling Services for Pregnant Women- Section 1905 of the Social Security Act (42 U.S.C. 1396d(a)(4)) is amended--

(1) in subsection (a)(4)--

(A) by striking `and' before `(C)'; and

(B) by inserting before the semicolon at the end the following new subparagraph: `; and (D) counseling for cessation of tobacco use (as defined in subsection (y)) for pregnant women'; and

(2) by adding at the end the following:

`(y)(1) For purposes of this title, the term `counseling for cessation of tobacco use' means therapy and counseling for cessation of tobacco use for pregnant women who use tobacco products or who are being treated for tobacco use that is furnished--

`(A) by or under the supervision of a physician; or

`(B) by any other health care professional who--

`(i) is legally authorized to furnish such services under State law (or the State regulatory mechanism provided by State law) of the State in which the services are furnished; and

`(ii) is authorized to receive payment for other services under this title or is designated by the Secretary for this purpose.

`(2) Subject to paragraph (3), such term is limited to--

`(A) therapy and counseling services recommended in `Treating Tobacco Use and Dependence: A Clinical Practice Guideline', published by the Public Health Service in June 2000, or any subsequent modification of such Guideline; and

`(B) such other therapy and counseling services that the Secretary recognizes to be effective.

`(3) Such term shall not include coverage for drugs or biologicals that are not otherwise covered under this title.'.

(c) Removal of Cost-Sharing for Tobacco Cessation Counseling Services for Pregnant Women- Section 1916 of the Social Security Act (42 U.S.C. 1396o) is amended in each of subsections (a)(2)(B) and (b)(2)(B) by inserting `, and counseling for cessation of tobacco use (as defined in section 1905(y))' after `complicate the pregnancy'.

(d) Effective Date- The amendments made by this section shall apply to services furnished on or after the date that is 1 year after the date of enactment of this Act.

SEC. 5. PROMOTING CESSATION OF TOBACCO USE UNDER THE MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT PROGRAM.

(a) Quality Maternal and Child Health Services Include Tobacco Cessation Counseling and Medications-

(1) IN GENERAL- Section 501 of the Social Security Act (42 U.S.C. 701) is amended by adding at the end the following new subsection:

`(c) For purposes of this title, counseling for cessation of tobacco use (as defined in section 1905(y)), drugs and biologicals used to promote smoking cessation, and the inclusion of antitobacco messages in health promotion counseling shall be considered to be part of quality maternal and child health services.'.

(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take effect on the date that is 1 year after the date of enactment of this Act.

(b) Evaluation of National Core Performance Measures-

(1) IN GENERAL- The Administrator of the Health Resources and Services Administration shall assess the current national core performance measures and national core outcome measures utilized under the Maternal and Child Health Block Grant under title V of the Social Security Act (42 U.S.C. 701 et seq.) for purposes of expanding such measures to include some of the known causes of low birth weight and prematurity, including the percentage of infants born to pregnant women who smoked during pregnancy.

(2) REPORT- Not later than 1 year after the date of enactment of this Act, the Administrator of the Health Resources and Services Administration shall submit to the appropriate committees of Congress a report concerning the results of the evaluation conducted under paragraph (1).

SEC. 6. STATE OPTION TO PROVIDE FAMILY PLANNING SERVICES AND SUPPLIES TO INDIVIDUALS WITH INCOMES THAT DO NOT EXCEED A STATE'S INCOME ELIGIBILITY LEVEL FOR MEDICAL ASSISTANCE.

(a) In General- Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) is amended--

(1) by redesignating section 1936 as section 1937; and

(2) by inserting after section 1935 the following new section:

`STATE OPTION TO PROVIDE FAMILY PLANNING SERVICES AND SUPPLIES

`SEC. 1935. (a) In General- Subject to subsections (b) and (c), a State may elect (through a State plan amendment) to make medical assistance described in section 1905(a)(4)(C) available to any individual whose family income does not exceed the greater of--

`(1) 185 percent of the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved; or

`(2) the eligibility income level (expressed as a percentage of such poverty line) that has been specified under a waiver authorized by the Secretary or under section 1902(r)(2)), as of October 1, 2005, for an individual to be eligible for medical assistance under the State plan.

`(b) Comparability- Medical assistance described in section 1905(a)(4)(C) that is made available under a State plan amendment under subsection (a) shall--

`(1) not be less in amount, duration, or scope than the medical assistance described in that section that is made available to any other individual under the State plan; and

`(2) be provided in accordance with the restrictions on deductions, cost sharing, or similar charges imposed under section 1916(a)(2)(D).

`(c) Option To Extend Coverage During a Post-Eligibility Period-

`(1) INITIAL PERIOD- A State plan amendment made under subsection (a) may provide that any individual who was receiving medical assistance described in section 1905(a)(4)(C) as a result of such amendment, and who becomes ineligible for such assistance because of hours of, or income from, employment, may remain eligible for such medical assistance through the end of the 6-month period that begins on the first day the individual becomes so ineligible.

`(2) ADDITIONAL EXTENSION- A State plan amendment made under subsection (a) may provide that any individual who has received medical assistance described in section 1905(a)(4)(C) during the entire 6-month period described in paragraph (1) may be extended coverage for such assistance for a succeeding 6-month period.'.

(b) Effective Date- The amendments made by subsection (a) apply to medical assistance provided on and after October 1, 2005.

SEC. 7. STATE OPTION TO EXTEND THE POSTPARTUM PERIOD FOR PROVISION OF FAMILY PLANNING SERVICES AND SUPPLIES.

(a) In General- Section 1902(e)(5) of the Social Security Act (42 U.S.C. 1396a(e)(5)) is amended--

(1) by striking `eligible under the plan, as though' and inserting `eligible under the plan--

`(A) as though';

(2) by striking the period and inserting `; and'; and

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

`(B) for medical assistance described in section 1905(a)(4)(C) for so long as the family income of such woman does not exceed the maximum income level established by the State for the woman to be eligible for medical assistance under the State plan (as a result of pregnancy or otherwise).'.

(b) Effective Date- The amendments made by subsection (a) apply to medical assistance provided on and after October 1, 2005.

SEC. 8. STATE OPTION TO PROVIDE WRAP-AROUND SCHIP COVERAGE TO CHILDREN WHO HAVE OTHER HEALTH COVERAGE.

(a) In General-

(1) SCHIP-

(A) STATE OPTION TO PROVIDE WRAP-AROUND COVERAGE- Section 2110(b) of the Social Security Act (42 U.S.C. 1397jj(b)) is amended--

(i) in paragraph (1)(C), by inserting `, subject to paragraph (5),' after `under title XIX or'; and

(ii) by adding at the end the following:

`(5) STATE OPTION TO PROVIDE WRAP-AROUND COVERAGE-

`(A) IN GENERAL- A State may waive the requirement of paragraph (1)(C) that a targeted low-income child may not be covered under a group health plan or under health insurance coverage if the State satisfies the conditions described in subsection (c)(8). The State may waive such requirement in order to provide--

`(i) services for a child with special health care needs; or

`(ii) all services.

`(B) AUTHORITY TO LIMIT INCOME ELIGIBILITY- In waiving such requirement, a State may limit the application of the waiver to children whose family income does not exceed a level specified by the State, so long as the level so specified does not exceed the maximum income level otherwise established for other children under the State child health plan.'.

(B) CONDITIONS DESCRIBED- Section 2105(c) of the Social Security Act (42 U.S.C. 1397ee(c)) is amended by adding at the end the following:

`(8) CONDITIONS FOR PROVISION OF WRAP-AROUND COVERAGE- For purposes of section 2110(b)(5), the conditions described in this paragraph are the following:

`(A) INCOME ELIGIBILITY- The State child health plan (whether implemented under title XIX or this title)--

`(i) has the highest income eligibility standard permitted under this title as of January 1, 2005;

`(ii) subject to subparagraph (B), does not limit the acceptance of applications for children; and

`(iii) provides benefits to all children in the State who apply for and meet eligibility standards.

`(B) NO WAITING LIST IMPOSED- With respect to children whose family income is at or below 200 percent of the poverty line, the State does not impose any numerical limitation, waiting list, or similar limitation on the eligibility of such children for child health assistance under such State plan.

`(C) NO MORE FAVORABLE TREATMENT- The State child health plan may not provide more favorable coverage of dental services to the children covered under section 2110(b)(5) than to children otherwise covered under this title.'.

(C) STATE OPTION TO WAIVE WAITING PERIOD- Section 2102(b)(1)(B) of the Social Security Act (42 U.S.C. 1397bb(b)(1)(B)), as amended by section 2(b)(3)(B), is amended--

(i) in clause (ii), by striking `, and' at the end and inserting a semicolon;

(ii) in clause (iii), by striking the period at the end and inserting `; and'; and

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

`(iv) at State option, may not apply a waiting period in the case of a child described in section 2110(b)(5), if the State satisfies the requirements of section 2105(c)(8).'.

(2) APPLICATION OF ENHANCED MATCH UNDER MEDICAID- Section 1905 of the Social Security Act (42 U.S.C. 1396d), as amended by section 2(a)(2), is amended--

(A) in subsection (b), in the fourth sentence, by striking `or (u)(4)' and inserting `(u)(4), or (u)(5)'; and

(B) in subsection (u)--

(i) by redesignating paragraph (5) as paragraph (6); and

(ii) by inserting after paragraph (4) the following:

`(5) For purposes of subsection (b), the expenditures described in this paragraph are expenditures for items and services for children described in section 2110(b)(5), but only in the case of a State that satisfies the requirements of section 2105(c)(8).'.

(3) APPLICATION OF SECONDARY PAYOR PROVISIONS- Section 2107(e)(1) of the Social Security Act (42 U.S.C. 1397gg(e)(1)), as amended by section 3(b), is amended by adding at the end the following:

`(F) Section 1902(a)(25) (relating to coordination of benefits and secondary payor provisions) with respect to children covered under a waiver described in section 2110(b)(5).'.

(b) Effective Date- The amendments made by subsection (a) shall take effect on January 1, 2005, and shall apply to child health assistance and medical assistance provided on or after that date.

END