SECTION 1. SHORT TITLE.

    This Act may be cited as the ``SCHIP Expansion Act of 2004''.

SEC. 2. ELIGIBILITY OF ALL UNINSURED CHILDREN FOR SCHIP.

    (a) In General.--Section 2110(b) of the Social Security Act (42 
U.S.C. 1397jj(b)) is amended--
            (1) in paragraph (1)--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B);
            (2) in paragraph (2)--
                    (A) by striking ``include'' and all that follows 
                through ``a child who is an'' and inserting ``include a 
                child who is an''; and
                    (B) by striking the semicolon and all that follows 
                through the period and inserting a period; and
            (3) by striking paragraph (4).
    (b) No Exclusion of Children With Access to High-Cost Coverage.--
Section 2110(b)(3) of the Social Security Act (42 U.S.C. 1397jj(b)(3)) 
is amended--
            (1) in the paragraph heading, by striking ``rule'' and 
        inserting ``rules'';
            (2) by striking ``A child'' and inserting the following:
                    ``(A) Certain non federally funded coverage.--A 
                child''; and
            (3) by adding at the end the following:
                    ``(B) No exclusion of children with access to high-
                cost coverage.--A State shall not exclude a child from 
                being treated as a targeted vulnerable child who has 
                access to coverage under a group health plan or health 
                insurance coverage if the total annual aggregate cost 
                for premiums, deductibles, cost sharing, and similar 
                charges imposed under the group health plan or health 
                insurance coverage with respect to all targeted 
                vulnerable children in the child's family exceeds 5 
                percent of such family's income for the year 
                involved.''.
    (c) Conforming Amendments.--
            (1) Titles XIX and XXI of the Social Security Act (42 
        U.S.C. 1396 et seq.; 1397aa et. seq.) are amended by striking 
        ``targeted low-income'' each place it appears and inserting 
        ``targeted vulnerable''.
            (2) Section 2102(b)(3)(C) of the Social Security Act (42 
        U.S.C. 1397bb(b)(3)(C)) is amended by inserting ``particularly 
        with respect to children whose family income exceeds 200 
        percent of the poverty line'' before the semicolon.
    (d) Effective Date.--The amendments made by this section take 
effect on October 1, 2004.

SEC. 3. INCREASE IN FEDERAL FINANCIAL PARTICIPATION UNDER SCHIP AND 
              MEDICAID FOR STATES WITH SIMPLIFIED ENROLLMENT AND 
              RENEWAL PROCEDURES FOR CHILDREN.

    (a) SCHIP.--Section 2105(c)(2) of the Social Security Act (42 
U.S.C. 1397ee(c)(2)) is amended by adding at the end the following:
                    ``(C) Nonapplication of limitation and increase in 
                federal payment for states with simplified enrollment 
                and renewal procedures.--
                            ``(i) In general.--Notwithstanding 
                        subsection (a)(1) and subparagraph (A)--
                                    ``(I) the limitation under 
                                subparagraph (A) on expenditures for 
                                items described in subsection (a)(1)(D) 
                                shall not apply with respect to 
                                expenditures incurred to carry out any 
                                of the outreach strategies described in 
                                clause (ii), but only if the State 
                                carries out the same outreach 
                                strategies for children under title 
                                XIX; and
                                    ``(II) the enhanced FMAP for a 
                                State for a fiscal year otherwise 
                                determined under subsection (b) shall 
                                be increased by 5 percentage points 
                                (without regard to the application of 
                                the 85 percent limitation under that 
                                subsection)) with respect to such 
                                expenditures.
                            ``(ii) Outreach strategies described.--For 
                        purposes of clause (i), the outreach strategies 
                        described in this clause are the following:
                                    ``(I) Presumptive eligibility.--The 
                                State provides for presumptive 
                                eligibility for children under this 
                                title and under title XIX.
                                    ``(II) Adoption of 12-month 
                                continuous eligibility.--The State 
                                provides that eligibility for children 
                                shall not be redetermined more often 
                                than once every year under this title 
                                or under title XIX.
                                    ``(III) Elimination of asset 
                                test.--The State does not apply any 
                                asset test for eligibility under this 
                                title or title XIX with respect to 
                                children.
                                    ``(IV) Passive renewal.--The State 
                                provides for the automatic renewal of 
                                the eligibility of children for 
                                assistance under this title and under 
                                title XIX if the family of which such a 
                                child is a member does not report any 
                                changes to family income or other 
                                relevant circumstances, subject to 
                                verification of information from State 
                                databases.''.
    (b) Medicaid.--
            (1) In general.--Section 1902(l) of the Social Security Act 
        (42 U.S.C. 1396a(l)) is amended--
                    (A) in paragraph (3), by inserting ``subject to 
                paragraph (5)'', after ``Notwithstanding subsection 
                (a)(17),''; and
                    (B) by adding at the end the following:
    ``(5)(A) Notwithstanding the first sentence of section 1905(b), 
with respect to expenditures incurred to carry out any of the outreach 
strategies described in subparagraph (B) for individuals under 19 years 
of age who are eligible for medical assistance under subsection 
(a)(10)(A), the Federal medical assistance percentage is equal to the 
enhanced FMAP described in section 2105(b) and increased under section 
2105(c)(2)(C)(i)(II), but only if the State carries out the same 
outreach strategies for children under title XXI.
    ``(B) For purposes of subparagraph (A), the outreach strategies 
described in this subparagraph are the following:
            ``(i) Presumptive eligibility.--The State provides for 
        presumptive eligibility for such individuals under this title 
        and title XXI.
            ``(ii) Adoption of 12-month continuous eligibility.--The 
        State provides that eligibility for such individuals shall not 
        be redetermined more often than once every year under this 
        title or under title XXI.
            ``(iii) Elimination of asset test.--The State does not 
        apply any asset test for eligibility under this title or title 
        XXI with respect to such individuals.
            ``(iv) Passive renewal.--The State provides for the 
        automatic renewal of the eligibility of such individuals for 
        assistance under this title and under title XXI if the family 
        of which such an individual is a member does not report any 
        changes to family income or other relevant circumstances, 
        subject to verification of information from State databases.''.
            (2) Conforming amendment.--The first sentence of section 
        1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) is 
        amended by striking ``section 1933(d)'' and inserting 
        ``sections 1902(l)(5) and 1933(d)''.
    (c) Effective Date.--The amendments made by this section take 
effect on October 1, 2004.

SEC. 4. ELIMINATION OF SCHIP DIP AND INCREASE IN FUNDING.

    (a) In General.--Section 2104(a) of the Social Security Act (42 
U.S.C. 1397dd(a)) is amended--
            (1) in paragraphs (5), (6), and (7), by striking 
        ``$3,150,000,000'' each place it appears and inserting 
        ``$4,275,000,000'';
            (2) in paragraphs (8) and (9), by striking 
        ``$4,050,000,000'' each place it appears and inserting 
        ``$9,050,000,000''; and
            (3) in paragraph (10), by striking ``$5,000,000,000'' and 
        inserting ``$10,000,000,000''.
    (b) Effective Date.--The amendments made by this section take 
effect on October 1, 2004, and apply to allotments and redistributions 
of unused allotments made on or after that date.

SEC. 5. LIMITATION ON PAYMENTS TO STATES THAT HAVE AN ENROLLMENT CAP 
              BUT HAVE NOT EXHAUSTED THE STATE'S AVAILABLE ALLOTMENTS.

    (a) In General.--Section 2105 of the Social Security Act (42 U.S.C. 
1397ee) is amended by adding at the end the following:
    ``(h) Limitation on Payments to States That Have an Enrollment Cap 
but Have Not Exhausted the State's Available Allotments.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, payment shall not be made to a State under this 
        section if the State has an enrollment freeze, enrollment cap, 
        procedures to delay consideration of, or not to consider, 
        submitted applications for child health assistance, or a 
        waiting list for the submission or consideration of such 
        applications or for such assistance, and the State has not 
        fully expended the amount of all allotments available with 
        respect to a fiscal year for expenditure by the State, 
        including allotments for prior fiscal years that remain 
        available for expenditure during the fiscal year under 
        subsection (c) or (g) of section 2104 or that were 
        redistributed to the State under subsection (f) or (g) of 
        section 2104.
            ``(2) Rule of construction.--Paragraph (1) shall not be 
        construed as prohibiting a State from establishing regular open 
        enrollment periods for the submission of applications for child 
        health assistance.''.
    (b) Effective Date.--The amendments made by this section take 
effect on October 1, 2004.

SEC. 6. APPLICATION OF MEDICAID MANAGED CARE REQUIREMENTS TO SCHIP.

    (a) In General.--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:
                    ``(E) Sections 1903(m) and 1932 (relating to 
                requirements for managed care).''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on October 1, 2004.
SCHIP Expansion Act of 2004 - Amends title XXI (State Children's Health Insurance Program) (SCHIP) of the Social Security Act (SSA) to: (1) make all uninsured children eligible for SCHIP; (2) prohibit the State from excluding a child who has access to high cost coverage under a group health plan or health insurance coverage from being treated as a targeted vulnerable child under SCHIP; (3) increase Federal financial participation under SCHIP and Medicaid for States with simplified enrollment and renewal procedures for children, regardless of their family income; (4) provide for an increase in funds under SCHIP and Medicaid for outreach strategies for children; (5) increase funding for SCHIP; (6) prohibit payments to a State with an enrollment cap (or related procedures) which has not exhausted its available allotments; and (7) provide for the application of Medicaid managed care requirements to States under SCHIP.
A bill to amend title XXI of the Social Security Act to make all uninsured children eligible for the State children's health insurance program, to encourage States to increase the number of children enrolled in the medicaid and State children's health insurance programs by simplifying the enrollment and renewal procedures for those programs, and for other purposes.