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Nebraska Becomes First State to Implement Medicaid Work Requirements Under Federal Law

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Nebraska Becomes First State to Enforce Medicaid Work Requirements Under New Federal Law

Nebraska began enforcing work requirements for certain Medicaid expansion enrollees on May 1, 2025, becoming the first state to implement the policy under the One Big Beautiful Bill Act.

The law, signed by President Donald Trump in July 2025, requires adults aged 19 to 64 enrolled in Nebraska's Medicaid expansion program to meet specific work or activity benchmarks. The expansion covers approximately 70,000 individuals out of Nebraska's total 346,000 Medicaid recipients.

Key Requirements

Enrollees subject to the requirement must meet one of the following criteria for at least 80 hours per month:

  • Employment
  • Volunteering or community service
  • Attendance at a school or job training program on at least a part-time basis
  • Earning at least $580 per month (equivalent to 80 hours at the federal minimum wage)

Exemptions

The following groups are exempt from the work requirement:

  • Pregnant women
  • Parents of children under a specified age (reported as 13 or 14, depending on the source)
  • Individuals deemed "medically frail" or with a condition that "actively interferes" with the ability to work
  • Individuals in substance use disorder treatment
  • Caregivers of disabled individuals
  • Veterans with disabilities

Nebraska has issued a 295-page list of qualifying medical conditions using medical codes for the "medical frailty" exemption.

Federal guidance from the Centers for Medicare & Medicaid Services (CMS), released on June 1, 2025, allows states discretion in defining qualifying medical conditions. The CMS guidance does not include a specific exemption for homeless individuals.

During the first year of implementation, enrollees may self-attest to meeting the requirement or qualifying for an exemption without providing supporting documentation. Starting in 2028, states must verify exemptions using claims data and other records.

Implementation Process

New applicants must demonstrate compliance with the work requirement in the month before applying for coverage. For existing enrollees, compliance will be checked at the time of renewal, beginning July 31, 2025. Failure to submit required information within one month of notification may result in loss of coverage.

Nebraska is using databases to verify work or exemption status for an estimated 60-72% of enrollees. Those who cannot be verified through data matching will be notified and can submit a declaration form online to report volunteer work, school attendance, or qualifying exemptions. The state has not added administrative staff specifically for implementation.

Nebraska began notifying enrollees about the new requirements in December 2024 through mail, email, text messages, and media campaigns.

Federal Timeline

The One Big Beautiful Bill Act requires states that expanded Medicaid under the Affordable Care Act to implement work requirements by January 1, 2027. States have the option to begin earlier. Nebraska is implementing the requirement eight months before the federal deadline.

Other states planning early implementation include:

  • Montana (July 2025)
  • Iowa (December 2025)
  • Other states are expected to begin in January 2027

Projected Impact

National Estimates

  • The Congressional Budget Office estimates that 4.8 to 5 million people will become uninsured over the next decade due to the work requirement.
  • The Urban Institute projects national enrollment declines of 3 to 7 million people by 2028.
  • A KFF report estimates approximately 5 million people could lose coverage by 2034 due to administrative hurdles rather than employment status.

Nebraska Estimates

  • The Urban Institute projects enrollment in Nebraska's Medicaid expansion could decrease by 16,000 to 30,000 people in 2028.
  • Approximately 25,000 enrollees (36% of those subject to the rules) could lose their health insurance, according to the Urban Institute.
  • Many of those losing coverage may actually meet the requirements but be dropped due to paperwork issues or failure to prove exemptions.

Previous State Experiences

Arkansas (2018)

Arkansas implemented a similar work requirement under a federal waiver. Over 18,000 people lost coverage in nine months, primarily due to paperwork issues. An analysis from Harvard researchers found no increase in employment among the affected population.

Georgia (2023-present)

Georgia's work requirement under a partial Medicaid expansion has enrolled approximately 8,000 people, far fewer than projected. The program rejected about 60% of applicants for paperwork issues and cost $110 million over its first two years.

Statements

Government Officials

  • Nebraska Governor Jim Pillen: Stated the mandate promotes long-term independence and helps recipients achieve greater self-sufficiency through employment.
  • Nebraska Medicaid Director Drew Gonshorowski: Stated the state's top priority is ensuring enrollees understand the changes and how to maintain coverage.
  • CMS Administrator Dr. Mehmet Oz: Praised Nebraska's early rollout as showing commitment to helping enrollees move toward independence. Regarding the exemption system, he stated, "We're forgiving, but we're not foolish."
  • House Speaker Mike Johnson: Described the requirements as a way to cut "fraud, waste and abuse" in Medicaid.

Advocacy and Policy Groups

  • Nebraska Appleseed (Sarah Maresh): Expressed concern that enrollees are confused and that the state has not provided sufficient outreach or clear notices. Stated that red tape, not lack of work, may cause coverage loss.
  • Families USA (Anthony Wright): Described the rollout as unnecessarily rushed.
  • Center on Budget and Policy Priorities (Jennifer Wagner, Allie Gardner): Noted that past experience shows eligible people often lose coverage due to complex reporting requirements, and that the rule lacks funding to help people find or retain employment.
  • KFF (Larry Levitt): Noted that self-declaration for the first year could prevent coverage gaps, but that the quick implementation timeline makes it harder for states to set up adequate systems.

Healthcare Providers

  • Nebraska Hospital Association: Warned that increased uninsured patients could hurt hospital finances, especially in rural areas.
  • Health Center Association of Nebraska (Amy Behnke): Stated that staff and clients have unanswered questions about implementation specifics, such as travel distance requirements for medical exemptions.
  • Coalition of 48 patient organizations: Criticized the rule for not adequately protecting people with serious health conditions.

Researchers

  • Adrianna McIntyre (Harvard health policy professor): Noted that the implementation timeline is unusually tight, as states typically require months or years for such changes.
  • Dr. Adam Gaffney (Harvard Medical School): Warned of dangerous care disruptions from coverage lapses.

Additional Policy Provisions

Enrollees who lose coverage and later reenroll may face reduced retroactive eligibility—from three months to one month. A new federal rule also requires redetermination of eligibility every six months.

The Urban Institute projects enrollment in Nebraska's Medicaid expansion could decrease by 16,000 to 30,000 people in 2028.