Improved Children's Health Coverage Act of 1998

Improved Children's Health Coverage Act of 1998 - Amends titles XIX (Medicaid) and XXI (Children's Health Insurance Program) (CHIP) of the Social Security Act (SSA) to mandate: (1) development and use of a uniform, simplified application form for establishing eligibility for Medicaid and CHIP benefits; (2) coordinated enrollment processes; and (3) timely response to inquiries received through a national toll-free telephone number for information on children's coverage under such programs. Requires the Secretary of Health and Human Services to establish such number.

(Sec. 2) Declares the costs to administer such development and use to be a reasonable cost to administer a State's CHIP plan regardless of whether such expenditures might also be related to the administration of SSA title XIX. Eliminates certain limitations from applying to such administrative costs. Requires the Secretary to permit common administrative expenditures between SSA titles XIX and XXI to be paid for under SSA title XXI.

Mandates periodic independent State audits of enrollment processes to determine the extent to which children provided CHIP assistance are eligible for Medicaid assistance (and, therefore, should be provided Medicaid assistance rather than CHIP assistance).

Amends SSA titles XIX to provide for additional entities (including elementary and secondary schools, child support enforcement agencies, and child care resource and referral agencies) that are qualified to determine Medicaid presumptive eligibility for low-income children.

(Sec. 3) Amends SSA title XXI to require a State child health plan to: (1) specify methods to ensure coordination of pediatric care within a family; (2) make the State and its contractors, and not beneficiaries and families, responsible for applying limitations on cost-sharing; (3) impose, at its option, a flat limit (of up to $500) on out-of-pocket expenditures for certain low-income children (as an alternative to the current five percent of family income); and (4) provide a grace period and prior notice before disenrollment for nonpayment of premiums.

Prohibits State child health plan eligibility standards from permitting the use of mandatory waiting periods, unless the Secretary finds that such a period would not be contrary to title XXI.

(Sec. 4) Amends SSA title XIX to provide for: (1) automatic reassessment of eligibility for CHIP benefits for children losing Medicaid eligibility; (2) optional CHIP coverage of low-income, uninsured pregnant women; (3) State option to cover legal immigrants under the Medicaid and CHIP programs; (4) elimination of the funding offset for exercise of the presumptive eligibility option; and (5) CHIP and Medicaid program coordination with the Maternal and Child Health Services program under SSA title V.