
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC1397cc]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                       CHAPTER 7--SOCIAL SECURITY
 
        SUBCHAPTER XXI--STATE CHILDREN'S HEALTH INSURANCE PROGRAM
 
Sec. 1397cc. Coverage requirements for children's health 
        insurance
        

(a) Required scope of health insurance coverage

    The child health assistance provided to a targeted low-income child 
under the plan in the form described in paragraph (1) of section 
1397aa(a) of this title shall consist, consistent with subsection (c)(5) 
of this section, of any of the following:

                       (1) Benchmark coverage

        Health benefits coverage that is equivalent to the benefits 
    coverage in a benchmark benefit package described in subsection (b) 
    of this section.

                  (2) Benchmark-equivalent coverage

        Health benefits coverage that meets the following requirements:

        (A) Inclusion of basic services

            The coverage includes benefits for items and services within 
        each of the categories of basic services described in subsection 
        (c)(1) of this section.

        (B) Aggregate actuarial value equivalent to benchmark package

            The coverage has an aggregate actuarial value that is at 
        least actuarially equivalent to one of the benchmark benefit 
        packages.

        (C) Substantial actuarial value for additional services included 
                in benchmark package

            With respect to each of the categories of additional 
        services described in subsection (c)(2) of this section for 
        which coverage is provided under the benchmark benefit package 
        used under subparagraph (B), the coverage has an actuarial value 
        that is equal to at least 75 percent of the actuarial value of 
        the coverage of that category of services in such package.

           (3) Existing comprehensive State-based coverage

        Health benefits coverage under an existing comprehensive State-
    based program, described in subsection (d)(1) of this section.

                   (4) Secretary-approved coverage

        Any other health benefits coverage that the Secretary 
    determines, upon application by a State, provides appropriate 
    coverage for the population of targeted low-income children proposed 
    to be provided such coverage.

(b) Benchmark benefit packages

    The benchmark benefit packages are as follows:

      (1) FEHBP-equivalent children's health insurance coverage

        The standard Blue Cross/Blue Shield preferred provider option 
    service benefit plan, described in and offered under section 8903(1) 
    of title 5.

                     (2) State employee coverage

        A health benefits coverage plan that is offered and generally 
    available to State employees in the State involved.

                  (3) Coverage offered through HMO

        The health insurance coverage plan that--
            (A) is offered by a health maintenance organization (as 
        defined in section 2791(b)(3) of the Public Health Service Act 
        [42 U.S.C. 300gg-91(b)(3)]), and
            (B) has the largest insured commercial, non-medicaid 
        enrollment of covered lives of such coverage plans offered by 
        such a health maintenance organization in the State involved.

(c) Categories of services; determination of actuarial value of coverage

                  (1) Categories of basic services

        For purposes of this section, the categories of basic services 
    described in this paragraph are as follows:
            (A) Inpatient and outpatient hospital services.
            (B) Physicians' surgical and medical services.
            (C) Laboratory and x-ray services.
            (D) Well-baby and well-child care, including age-appropriate 
        immunizations.

                (2) Categories of additional services

        For purposes of this section, the categories of additional 
    services described in this paragraph are as follows:
            (A) Coverage of prescription drugs.
            (B) Mental health services.
            (C) Vision services.
            (D) Hearing services.

                  (3) Treatment of other categories

        Nothing in this subsection shall be construed as preventing a 
    State child health plan from providing coverage of benefits that are 
    not within a category of services described in paragraph (1) or (2).

                (4) Determination of actuarial value

        The actuarial value of coverage of benchmark benefit packages, 
    coverage offered under the State child health plan, and coverage of 
    any categories of additional services under benchmark benefit 
    packages and under coverage offered by such a plan, shall be set 
    forth in an actuarial opinion in an actuarial report that has been 
    prepared--
            (A) by an individual who is a member of the American Academy 
        of Actuaries;
            (B) using generally accepted actuarial principles and 
        methodologies;
            (C) using a standardized set of utilization and price 
        factors;
            (D) using a standardized population that is representative 
        of privately insured children of the age of children who are 
        expected to be covered under the State child health plan;
            (E) applying the same principles and factors in comparing 
        the value of different coverage (or categories of services);
            (F) without taking into account any differences in coverage 
        based on the method of delivery or means of cost control or 
        utilization used; and
            (G) taking into account the ability of a State to reduce 
        benefits by taking into account the increase in actuarial value 
        of benefits coverage offered under the State child health plan 
        that results from the limitations on cost sharing under such 
        coverage.

    The actuary preparing the opinion shall select and specify in the 
    memorandum the standardized set and population to be used under 
    subparagraphs (C) and (D).

               (5) Construction on prohibited coverage

        Nothing in this section shall be construed as requiring any 
    health benefits coverage offered under the plan to provide coverage 
    for items or services for which payment is prohibited under this 
    subchapter, notwithstanding that any benchmark benefit package 
    includes coverage for such an item or service.

(d) Description of existing comprehensive State-based coverage

                           (1) In general

        A program described in this paragraph is a child health coverage 
    program that--
            (A) includes coverage of a range of benefits;
            (B) is administered or overseen by the State and receives 
        funds from the State;
            (C) is offered in New York, Florida, or Pennsylvania; and
            (D) was offered as of August 5, 1997.

                          (2) Modifications

        A State may modify a program described in paragraph (1) from 
    time to time so long as it continues to meet the requirement of 
    subparagraph (A) and does not reduce the actuarial value of the 
    coverage under the program below the lower of--
            (A) the actuarial value of the coverage under the program as 
        of August 5, 1997, or
            (B) the actuarial value described in subsection (a)(2)(B) of 
        this section,

    evaluated as of the time of the modification.

(e) Cost-sharing

                 (1) Description; general conditions

        (A) Description

            A State child health plan shall include a description, 
        consistent with this subsection, of the amount (if any) of 
        premiums, deductibles, coinsurance, and other cost sharing 
        imposed. Any such charges shall be imposed pursuant to a public 
        schedule.

        (B) Protection for lower income children

            The State child health plan may only vary premiums, 
        deductibles, coinsurance, and other cost sharing based on the 
        family income of targeted low-income children in a manner that 
        does not favor children from families with higher income over 
        children from families with lower income.

       (2) No cost sharing on benefits for preventive services

        The State child health plan may not impose deductibles, 
    coinsurance, or other cost sharing with respect to benefits for 
    services within the category of services described in subsection 
    (c)(1)(D) of this section.

            (3) Limitations on premiums and cost-sharing

        (A) Children in families with income below 150 percent of 
                poverty line

            In the case of a targeted low-income child whose family 
        income is at or below 150 percent of the poverty line, the State 
        child health plan may not impose--
                (i) an enrollment fee, premium, or similar charge that 
            exceeds the maximum monthly charge permitted consistent with 
            standards established to carry out section 1396o(b)(1) of 
            this title (with respect to individuals described in such 
            section); and
                (ii) a deductible, cost sharing, or similar charge that 
            exceeds an amount that is nominal (as determined consistent 
            with regulations referred to in section 1396o(a)(3) of this 
            title, with such appropriate adjustment for inflation or 
            other reasons as the Secretary determines to be reasonable).

        (B) Other children

            For children not described in subparagraph (A), subject to 
        paragraphs (1)(B) and (2), any premiums, deductibles, cost 
        sharing or similar charges imposed under the State child health 
        plan may be imposed on a sliding scale related to income, except 
        that the total annual aggregate cost-sharing with respect to all 
        targeted low-income children in a family under this subchapter 
        may not exceed 5 percent of such family's income for the year 
        involved.

                (4) Relation to medicaid requirements

        Nothing in this subsection shall be construed as affecting the 
    rules relating to the use of enrollment fees, premiums, deductions, 
    cost sharing, and similar charges in the case of targeted low-income 
    children who are provided child health assistance in the form of 
    coverage under a medicaid program under section 1397aa(a)(2) of this 
    title.

(f) Application of certain requirements

      (1) Restriction on application of preexisting condition 
                                 exclusions

        (A) In general

            Subject to subparagraph (B), the State child health plan 
        shall not permit the imposition of any preexisting condition 
        exclusion for covered benefits under the plan.

        (B) Group health plans and group health insurance coverage

            If the State child health plan provides for benefits through 
        payment for, or a contract with, a group health plan or group 
        health insurance coverage, the plan may permit the imposition of 
        a preexisting condition exclusion but only insofar as it is 
        permitted under the applicable provisions of part 7 of subtitle 
        B of title I of the Employee Retirement Income Security Act of 
        1974 [29 U.S.C. 1181 et seq.] and title XXVII of the Public 
        Health Service Act [42 U.S.C. 300gg et seq.].

               (2) Compliance with other requirements

        Coverage offered under this section shall comply with the 
    requirements of subpart 2 of part A of title XXVII of the Public 
    Health Service Act [42 U.S.C. 300gg-4 et seq.] insofar as such 
    requirements apply with respect to a health insurance issuer that 
    offers group health insurance coverage.

(Aug. 14, 1935, ch. 531, title XXI, Sec. 2103, as added Pub. L. 105-33, 
title IV, Sec. 4901(a), Aug. 5, 1997, 111 Stat. 554.)

                       References in Text

    The Employee Retirement Income Security Act of 1974, referred to in 
subsec. (f)(1)(B), is Pub. L. 93-406, Sept. 2, 1974, 88 Stat. 832, as 
amended. Part 7 of subtitle B of title I of the Act is classified 
generally to part 7 (Sec. 1181 et seq.) of subtitle B of subchapter I of 
chapter 18 of Title 29, Labor. For complete classification of this Act 
to the Code, see Short Title note set out under section 1001 of Title 29 
and Tables.
    The Public Health Service Act, referred to in subsec. (f), is act 
July 1, 1944, ch. 373, 58 Stat. 682, as amended. Title XXVII of the Act 
is classified generally to subchapter XXV (Sec. 300gg et seq.) of 
chapter 6A of this title. Subpart 2 of part A of title XXVII of the Act 
is classified generally to subpart 2 (Sec. 300gg-4 et seq.) of part A of 
subchapter XXV of chapter 6A of this title. For complete classification 
of this Act to the Code, see Short Title note set out under section 201 
of this title and Tables.

                  Section Referred to in Other Sections

    This section is referred to in sections 1397aa, 1397ee, 1397jj of 
this title.
