Nebraska to be the first state to implement work requirements for Medicaid coverage

LINCOLN — Nebraska will be the first state to implement new work reporting requirements to receive Medicaid, beating a deadline for states in the One Big Beautiful Bill Act by eight months.

Gov. Jim Pillen announced Nebraska's early participation in the federal changes at a press conference Monday with Dr. Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services. Oz attended the event through a video call.

By May 1, Nebraskans ages 19 to 64 who are physically able to work and earn less than 138% of the federal poverty level will need to report to the state 80 hours a month of working, volunteering, attending school or an apprenticeship or participating in a Department of Labor work program. The changes affect individuals who became eligible for Medicaid, a government health insurance program, through previous expansions.

Under the law, there are exceptions, including people who are disabled, pregnant or caregivers for disabled people or children under 13.

The deadline for states to implement Medicaid changes is Jan. 1, 2027.

Pillen praised the value of working and self-sufficiency and said the state wants to treat Medicaid as a hand up and not a handout.

"Working not only provides purpose but helps people become active, productive members of their communities," he said.

Pillen expects 30,000 Nebraskans will no longer receive Medicaid as a result of the changes. He said there are 100,000 job openings in the state.

Oz said Nebraska is using the OBBB as an opportunity to guide people to working: "It's going to allow people to find pathways, because we're going to make it easier for them to do the right thing when it comes to try to find work."

Critics of the OBBB and the work requirements for Medicaid have said the changes will create administrative burdens that could lead to errors and lapses in coverage. They also noted that reporting to the state can be burdensome for a family struggling to make ends meet.

Steve Corsi, chief executive of Nebraska's Department of Health and Human Services, said the changes will not result in new costs and that existing staff will manage the reporting from beneficiaries. Regarding how those beneficiaries will report, he said a system with existing and new technological infrastructure is in the works and will be tightened up until launch on May 1.

Oz pledged to support Nebraska and said, "others are going to look to you as an example." He added, "I highlight that when you go first, it's harder, but everyone's behind you and they can draft off you and benefit from your from your work."

The nonprofit advocacy group Nebraska Appleseed said Nebraska should not have rushed to be the first state to implement the new federal requirements.

"We have seen in other states that when Medicaid work requirements are implemented too quickly, like what Nebraska is proposing here, thousands of people who are eligible for the program unnecessarily lose coverage and millions of state dollars are wasted on ineffective administrative costs," the group said in a press release.

Arkansas implemented Medicaid work requirements for adults ages 30 to 49 in 2018, but the program only lasted a year due to a court ruling. In that time, 18,000 people disenrolled from Medicaid. Georgia spent $26 million mostly on administration and consultation in the first few months of its state health care system with work reporting requirements.

Appleseed also said work requirements can negatively affect even those who already meet them or are exempt from them. The group said, "rushing to implement work requirements will cause them to lose coverage anyway. The fact that the Governor is already estimating that 30,000 people will lose their coverage proves that our state is not prepared or ready for the task ahead of them."

Corsi said Medicaid recipients will receive notice of the program changes before the new year through call, text and mail.