A bill to encourage States not presently having in effect an approved medicaid plan to establish and put into effect such a plan.

Provides that in the case of any State which does not have in effect a State plan approved under title XIX (Medicaid) of the Social Security Act, and is preparing to put such a plan into effect not later than January 1, 1976, such State shall with respect to expenditures made in preparation of its implementation, be entitled to payments under specified provisions of the Social Security Act.

Imposes a liability to repay if any State fails to implement by January 1, 1976, a State plan approved under title XIX of the Social Security Act.