A Senate panel passed two bills April 21 to ensure that Arizona collects federal stimulus money for Medicaid programs and for extended unemployment benefits.

The Senate Commerce and Economic Development committee adopted an amendment to S1322 to allow workers who exhaust their unemployment benefits to be eligible for an additional 13 to 20 weeks of benefits at no cost to the state.

The federal government will be shouldering the full cost of the program under the American Recovery and Reinvestment Act. 

The committee also approved an amendment to S1102, which changes the determination of Medicaid eligibility to once a year instead of every six months. It was a reversal from an earlier change to the six-month determination period.

The House Commerce Committee has also approved mirror versions in the 60-person chamber.  

The Legislature is expected to pass the twin measures and send them to the Governor's Office this week.

Both pieces of legislation contain an emergency clause, which means they become effective immediately after the signature of the governor.

Both bills also received unanimous votes in committee. Democrats are expected to support both measures on the floor, Senate minority leaders said.

Legislative action on Medicaid issue is necessary because, until it is resolved, Arizona risks losing out on the $1.7 billion available to the state under the federal stimulus package.

The federal Centers for Medicare and Medicaid Services had determined Arizona is in violation of a maintenance-of-effort requirement in the stimulus package because the state made its Medicaid eligibility "standards, methodologies or procedures" more restrictive than those in place on July 1, 2008.

The violation was a result of a law passed in June that requires Arizona to determine the eligibility of Medicaid recipients every six months, instead of once per year.

Last month, Gov. Jan Brewer appealed the CMS ruling with the U.S. Department of Health and Human Services, arguing that the law represented a change in timing rather than a tightening of eligibility requirements.

But Charles Johnson, the acting Secretary of Health and Human Services, sided with CMS, giving Arizona a deadline of June 30 to comply with the federal law.

Prior to receiving notice that it was out of compliance, though, Arizona had assured the federal government it meets the requirements of the stimulus act and applied for an initial disbursement of $286 million in Medicaid money, which was just the first portion of about $1.7 billion available to the state under the stimulus package. The state received the money last month.

Without meeting the requirements of the stimulus law, Arizona risks paying a $6,400 per day penalty or about 0.8 percent in interest on the initial money that the state received.

Meanwhile, S1322 will allow jobless Arizonans whose regular benefits are about to run out to get extended unemployment benefits at no cost to the state.

The state's unemployment rate has been steadily climbing in the last several months. As of March, it stands at 7.8 percent, according to the Bureau of Labor Statistics.

Timing is critical because the program lasts only until the end of the year. The sooner the states makes the necessary changes to its existing unemployment benefits laws, the sooner out-of-work Arizonans can avail of the extended unemployment benefits.

Under existing arrangements, the federal government and states share the cost of the extended unemployment benefits program. The stimulus law amended it to say the federal government will pay 100 percent of the cost instead of the usual 50 percent.

First, though, the state must change statute to reflect that the federal government would cover 100 percent of the program's cost through the end of 2009.