Nebraska becomes first state to enforce Medicaid work requirements

Nebraska launched 📖Medicaid 📖work requirements on May 1, 2026, eight months before the January 2027 federal deadline set by the 📖One Big Beautiful Bill Act. The state used a state plan amendment — not a 📖Section 1115 waiver — to implement the rules early, a path made available by Congress when it passed the OBBBA in 2025. About 72,000 Nebraskans covered through 📖Medicaid expansion are subject to the new requirements.

To keep coverage, enrollees ages 19-64 must document at least 80 hours per month of work, job training, volunteering, school attendance, or community service, or earn at least $580 per calendar month. Exemptions apply to pregnant women, people caring for children under 13 or disabled family members, and those with qualifying medical conditions — but enrollees must prove the exemption through a verification process Nebraska DHHS manages.

Nebraska Governor Jim Pillen announced the early implementation in December 2025, calling it a model for the nation. Nebraska DHHS Director Steve Corsi argued the state was "in a situation where we can be more nimble" because it owns its eligibility system and can verify about 72% of enrollees' work status automatically through state and federal databases.

Health advocates challenged that framing. Nebraska Appleseed, Families USA, and the Georgetown Center for Children and Families warned that the state gave enrollees insufficient notice, did not increase DHHS staffing to handle the new administrative load, and rushed implementation before CMS had issued full federal guidance to states.

The Urban Institute projects enrollment in Nebraska's 📖Medicaid expansion will decline by 16,000 to 30,000 people by 2028 due to the work requirement combined with a new provision requiring enrollees to redetermine eligibility every six months instead of annually. A separate Urban Institute analysis found that about 25,000 Nebraskans who qualified under the ACA expansion would lose coverage specifically from the work requirement.

Researchers at KFF found that roughly 65% of Nebraska 📖Medicaid adults without dependent children who are subject to the requirements are already working 80 or more hours per month or attending school. Coverage losses are projected to fall most heavily on people who are working but can't document it — not on people who are unemployed.

The Arkansas precedent is the only completed U.S. data point on 📖Medicaid 📖work requirements at scale. Arkansas implemented requirements in June 2018 for adults ages 30-49 under the first Trump administration's 📖Section 1115 waiver approval. By April 2019, 18,000 Arkansans had lost coverage — about 25% of those subject to the requirement — in just seven months.

The coverage losses were driven primarily by the reporting system, not by people who were actually non-compliant. A Health Affairs study found that among those who lost coverage: 56% delayed care due to cost, 64% delayed taking medications, and 50% reported serious problems paying medical debt. Employment among the target population did not increase over 18 months of follow-up.

U.S. District Judge James Boasberg — an Obama appointee — halted Arkansas's program in March 2019, ruling CMS's approval '📖arbitrary and capricious' because the agency failed to consider 'whether and how the project would implicate the core objective of 📖Medicaid: the provision of medical coverage to the needy.' The D.C. Circuit Court of Appeals upheld that ruling in 2020.

The legal landscape shifted in 2025. Rather than relying on 📖Section 1115 waiver authority — the mechanism courts struck down — Congress embedded mandatory 📖work requirements directly into statute through the OBBBA. That statutory grounding changes the legal analysis: states implementing 📖work requirements under the OBBBA aren't acting on executive discretion subject to arbitrary-and-capricious review in the same way waiver approvals were.

The 📖Section 1115 waiver process has historically served as a proving ground for 📖Medicaid policy experiments. Under the Obama administration, CMS declined to approve work requirement waivers, concluding they "could undermine access to care and do not support the objectives of the program." During the first Trump term, CMS approved work requirement waivers in 13 of 22 states that applied — but courts blocked implementation in every state where it was challenged, including Kentucky and Arkansas in March 2019. President Biden reversed all approved work requirement waivers. The second Trump administration and Congress together addressed the legal vulnerability by moving from waiver authority to statutory mandate.

CMS Administrator Dr. Mehmet Oz was confirmed by the Senate 53-45 on April 3, 2025, on a party-line vote. Before confirmation, Oz stated his support for 📖Medicaid 📖work requirements at his confirmation hearing. Under Oz's leadership, CMS has simultaneously tightened most other 📖Medicaid waiver expansions while accelerating implementation of 📖work requirements.

CMS operates with roughly 300 fewer staff than it had before the Trump administration's 2025 workforce reductions, leaving the agency to implement the most significant structural change to 📖Medicaid since the ACA expansion while operating with a diminished workforce.

The OBBBA mandates that all 43 states with 📖Medicaid expansion implement 📖work requirements by January 1, 2027, with extensions available through December 31, 2028. The Congressional Budget Office projects the work requirement provision will reduce 📖Medicaid spending by $344 billion over 10 years and remove coverage from 4.8 million people.

Montana has announced it will begin enforcement on July 1, 2026; Iowa on December 1, 2026. At least seven states have pending Section 1115 waivers for 📖work requirements that pre-date the OBBBA and remain under CMS review. Nebraska's implementation is the first live test of the new statutory framework's administrative machinery, exemption verification systems, and political durability.

Nebraska Appleseed and Families USA criticized the state's implementation timeline as rushed and inadequately resourced. DHHS confirmed it doesn't plan to hire additional staff to manage work requirement reporting or increased eligibility redeterminations.

The Center on Budget and Policy Priorities estimated that at least two-thirds of people who lose coverage nationally under 📖work requirements will be workers or individuals who qualify for an exemption — people who lose coverage through the administrative process, not through actual non-compliance with the work standard.