SEC. 1703. CHIP AND MEDICAID MAINTENANCE OF EFFORT.

[a] CHIP Maintenance of Effort- Section- 1902 of the Social Security Act [42 U.S.C. 1396a] is amended--

[1] in subsection [a], as amended by section 1631[b][1][D]--

[A] by striking 'and' at the end of paragraph [72];

[B] by striking the period at the end of paragraph [73] and inserting '; and'; and

[C] by inserting after paragraph [74] the following new paragraph:

'[75] provide for maintenance of effort under the State child health plan under title XXI in accordance with subsection [gg].'; and

[2] by adding at the end the following new subsection:

'[gg] CHIP Maintenance of Effort Requirement-

'[1] IN GENERAL- Subject to paragraph [2], as a condition of its State plan under this title under subsection [a][75] and receipt of any Federal financial assistance under section 1903[a] for calendar quarters beginning after the date of the enactment of this subsection and before CHIP MOE termination date specified in paragraph [3], a State shall not have in effect eligibility standards, methodologies, or procedures under its State child health plan under title XXI [including any waiver under such title or under section 1115 that is permitted to continue effect] that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan [or waiver] as in effect on June 16, 2009.

'[2] LIMITATION- Paragraph [1] shall not be construed as preventing a State from imposing a limitation described in section 2110[b][5][C][i][II] for a fiscal year in order to limit expenditures under its State child health plan under title XXI to those for which Federal financial participation is available under section 2105 for the fiscal year.

'[3] CHIP MOE TERMINATION DATE- In paragraph [1], the 'CHIP MOE termination date' for a State is the date that is the first day of Y1 [as defined in section 100[c] of the America's Affordable Health Choices Act of 2009] or, if later, the first day after such date that both of the following determinations have been made:

'[A] The Health Choices Commissioner has determined that the Health Insurance Exchange has the capacity to support the participation of CHIP enrollees who are Exchange-eligible individuals [as defined in section 202[b] of the America's Affordable Health Choices Act of 2009],

'[B] The Secretary has determined that such Exchange, the State, and employers have procedures in effect to ensure the timely transition without interruption of coverage of CHIP enrollees from assistance under title XXI to acceptable coverage [as defined for purposes of such Act].

In this paragraph, the term 'CHIP enrollee' means a targeted low-income child or [if the State has elected the option under section 2112, a targeted low-income pregnant woman] who is or otherwise would be [but for acceptable coverage] eligible for child health assistance or pregnancy-related assistance, respectively, under the State child health plan referred to in paragraph [1].'.

[b] Medicaid Maintenance of Effort; Simplifying and Coordinating Eligibility Rules Between Exchange and Medicaid-

[1] IN GENERAL- Section- 1903 of such Act [42 U.S.C. 1396b] is amended by adding at the end the following new subsection:

'[aa] Maintenance of Medicaid Effort; Simplifying and Coordinating Eligibility Rules Between Health Insurance Exchange and Medicaid-

'[1] MAINTENANCE OF EFFORT- A State is not eligible for payment under subsection [a] for a calendar quarter beginning after the date of the enactment of this subsection if eligibility standards, methodologies, or procedures under its plan under this title [including any waiver under this title or under section 1115 that is permitted to continue effect] that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under such plan [or waiver] as in effect on June 16, 2009. The Secretary shall extend such a waiver [including the availability of Federal financial participation under such waiver] for such period as may be required for a State to meet the requirement of the previous sentence.

'[2] REMOVAL OF ASSET TEST FOR CERTAIN ELIGIBILITY CATEGORIES-

'[A] IN GENERAL- A State is not eligible for payment under subsection [a] for a calendar quarter beginning on or after the first day of Y1 [as defined in section 100[c] of the America's Affordable Health Choices Act of 2009], if the State applies any asset or resource test in determining [or redetermining] eligibility of any individual on or after such first day under any of the following:

'[i] Subclause [I], [III], [IV], or [VI] of section 1902[a][10][A][i].

'[ii] Subclause [II], [IX], [XIV] or [XVII] of section 1902[a][10][A][ii].

'[iii] Section- 1931[b].

'[B] OVERRIDING CONTRARY PROVISIONS; REFERENCES- The provisions of this title that prevent the waiver of an asset or resource test described in subparagraph [A] are hereby waived.

'[C] REFERENCES- Any reference to a provision described in a provision in subparagraph [A] shall be deemed to be a reference to such provision as modified through the application of subparagraphs [A] and [B].'.

[2] CONFORMING AMENDMENTS-

[A] Section- 1902[a][10][A] of such Act [42 U.S.C. 1396a[a][10][A]] is amended, in the matter before clause [i], by inserting 'subject to section 1903[aa][2],' after '[A]'.

[B] Section- 1931[b][2] of such Act [42 U.S.C. 1396u-1[b][1]] is amended by inserting 'subject to section 1903[aa][2]' after 'and [3]'.

[c] Standards for Benchmark Packages- Section- 1937[b] of such Act [42 U.S.C. 1396u-7[b]] is amended--

[1] in paragraph [1], by inserting 'subject to paragraph [5]'; and

[2] by adding at the end the following new paragraph:

'[5] MINIMUM STANDARDS- Effective January 1, 2013, any benchmark benefit package [or benchmark equivalent coverage under paragraph [2]] must meet the minimum benefits and cost-sharing standards of a basic plan offered through the Health Insurance Exchange.'.