Amends title XXI (State Children's Health Insurance) (SCHIP) of the Social Security Act (SSA) to make a technical amendment to the definition of qualifying State used for purposes of giving certain States operating under waivers of specified State plan requirements the authority to use up to 20 percent of their FY 1998 through 2001 SCHIP allotments, for fiscal years in which they are available, for paying the costs of covering under Medicaid (SSA title XIX) certain low-income children whose family income meets an income eligibility standard under such waivers of at least 185 percent of the poverty line. Allows New Mexico to use such portion of its unspent SCHIP funds for covering such children under Medicaid.