Sets forth health insurance coverage options for recently unemployed individuals and their families. Requires establishment of a temporary program under which 75 percent of the premium for COBRA continuation coverage for Medicaid be provided for any individual who: (1) is separated from employment at any time during the period from September 11, 2001, through December 31, 2002; and (2) is eligible for, and has elected coverage under, COBRA continuation coverage. (COBRA refers to title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, and concerns continuation of coverage by employee group health plans under specified provisions of the Public Health Service Act, the Internal Revenue Code, and the Employee Retirement Income Security Act of1974.) Permits a State to elect to provide temporary Medicaid coverage (under title XIX of the Social Security Act) for individuals who: (1) are separated from employment at any time during the period that from September 11, 2001, through December 31, 2002; (2) are not eligible for COBRA continuation coverage; (3) are uninsured; and (4) do not have assets, resources, and earned or unearned income that exceed limitations set by the State. Permits a State to pay the entire COBRA premium for individuals whose family income does not exceed 200 percent of the poverty line and who are receiving COBRA premium assistance under this Act. Provides for temporary increases in the Medicaid Federal Medical assistance percentage (FMAP) for FY 2002.