Nebraska Becomes First State to Enforce Medicaid Work Requirements, Threatening Coverage for Tens of Thousands

On May 1, 2026, Nebraska became the first state in the country to enforce Medicaid work requirements under the One Big Beautiful Bill Act (H.R. 1), the federal budget reconciliation law signed on July 4, 2025 [1]. The policy requires adults ages 19 to 64 who gained Medicaid coverage through the Affordable Care Act's expansion to document at least 80 hours per month of work, job training, education, or community service — or risk losing their health insurance [2].

Approximately 70,000 Nebraskans are subject to the new mandate. Researchers estimate between 25,000 and 41,000 of them will ultimately lose coverage [3][4]. The state launched eight months ahead of the federal deadline of January 1, 2027, a decision Governor Jim Pillen and CMS Administrator Mehmet Oz celebrated as national leadership [5]. Critics call it a reckless experiment on some of the state's most vulnerable residents [6].

What the Law Requires

Under H.R. 1, all 42 states plus the District of Columbia that expanded Medicaid must impose work requirements on expansion enrollees by January 2027. Nebraska chose to go first [1].

To maintain coverage, affected Nebraskans must meet one of the following each month: complete 80 hours of qualifying activities (employment, job training, education, volunteering, or community service), attend school or an apprenticeship at least half-time, or earn at least $580 — equivalent to 80 hours at the federal minimum wage [2].

Nebraska's Department of Health and Human Services (DHHS) has said it will use existing state and federal databases to verify compliance, allowing self-attestation for activities like volunteering and school attendance without requiring supporting documentation [7]. Members with renewal dates in May or June 2026 will not face compliance checks until their 2027 renewal. The first group subject to enforcement will be those with eligibility periods ending on or after July 31, 2026 [2].

The Congressional Budget Office projects the work requirement provisions will reduce federal Medicaid spending by $326 billion over ten years and cause approximately 4.8 million people nationally to become uninsured [7][1].

Who Is Exempt — and Who Falls Through the Cracks

Nebraska's exemption categories include pregnant women, parents or guardians of children under age 14, people who are "medically frail" (a category covering cancers, serious mental illness, heart conditions, and other chronic diseases), individuals in substance use disorder treatment, and those caring for a disabled family member [2][7].

On paper, these exemptions are broad. In practice, the Arkansas experience suggests many eligible people fail to claim them. When Arkansas imposed nearly identical requirements in 2018, 18,000 people lost coverage within nine months [8]. Subsequent analysis found that approximately 75% of those who lost coverage were terminated for paperwork failures, not for failing to meet the work standard itself [7]. Many were already working or qualified for exemptions but did not understand the reporting rules, lacked internet access, or missed deadlines [8].

KFF analysis of Nebraska's expansion population found that roughly 65% of Medicaid adults without dependent children who could face the work requirement already work 80 or more hours per month or attend school [9]. Nebraska's unemployment rate sits at 3%, among the lowest in the nation [9]. A recent study published in the Annals of Internal Medicine found that approximately one-third of adults at risk of losing coverage report a physical illness, mental illness, or disability [7].

The gap between who qualifies for an exemption and who successfully navigates the bureaucracy to claim one is where coverage losses concentrate.

Administrative Capacity: Doing More with Less

Nebraska DHHS has stated it will implement work requirements without hiring any additional staff. Current team members, the agency says, have "foundational expertise" to absorb the work and have received training [6]. Federal grants included in H.R. 1 for work requirement implementation are expected to cover state costs [6].

This stands in sharp contrast to Montana, which projects needing 60 new employees for its July 2026 launch [4]. The Families USA analysis noted that Nebraska allowed itself only months to accomplish tasks — IT system configuration, data matching, consumer outreach — that typically require 18 to 24 months, plus four months of testing [4].

Outreach has been limited. DHHS sent approximately 70,000 notification letters, but roughly half of enrollees did not receive text messages, and fewer than 15% received emails [4]. For a population that frequently faces unstable housing and inconsistent internet access, mail-only communication is a significant barrier.

Drew Gonshorowski, Nebraska's Medicaid Director, said the agency's "top priority is making sure members clearly understand changes to the program and how to maintain their coverage" [7]. Advocates counter that the consumer-facing materials lack detail on how compliance will be verified and how to claim exemptions [4].

The Arkansas Precedent

Arkansas remains the most studied case of Medicaid work requirements in action. Its Arkansas Works program, launched in June 2018, required beneficiaries ages 19 to 49 to report 80 hours per month of qualifying activities through an online portal [8].

Within seven months, 18,000 people — one in four of those subject to the requirement — lost coverage [8]. A peer-reviewed study published in the New England Journal of Medicine found the policy produced no statistically significant increase in employment over 18 months of follow-up [10]. A follow-up study in Health Affairs confirmed the two-year results: coverage declined, employment did not change, and affordability of care worsened [11].

Source: KFF, Urban Institute, GAO

Data as of May 1, 2026CSV

Among those who lost coverage in Arkansas, 56% reported delaying needed care because of cost, and 64% delayed taking medications [8]. Nearly half reported serious problems paying medical debt [8]. The coverage losses fell disproportionately on people who faced reporting barriers — lack of internet access, confusion about rules, unstable contact information — rather than on people who refused to work [8][10].

In February 2020, the D.C. Circuit Court of Appeals vacated Arkansas's waiver in Gresham v. Azar, ruling unanimously that HHS had violated the Administrative Procedure Act by approving the program without considering its effect on Medicaid coverage — which the court called "the principal objective of Medicaid" [12]. The ruling established that the Secretary of HHS cannot approve work requirement waivers while ignoring projected coverage losses [12].

Georgia's Pathways Program: A Cautionary Comparison

Georgia's Pathways to Coverage program, launched in 2023, is the only other state work requirement that has been operational. Its results have been similarly discouraging for proponents.

After two years, only 8,077 Georgians were actively enrolled — out of roughly 250,000 eligible low-income adults [13]. About 60% of applications were denied, with 11% of denials stemming from failure to meet qualifying hours [13]. The state spent $10.7 million on a marketing contract that moved enrollment from approximately 2% to under 3% of the eligible population [13].

The program's cost structure drew particular scrutiny. A September 2025 GAO report found that Georgia had spent $54.2 million on administrative costs versus $26.1 million on actual health care — meaning the program spent more than twice as much on bureaucracy as on medical services [14]. Per-enrollee administrative costs reached approximately $5,900 [14].

Source: GAO Report GAO-25-108160

Data as of Sep 24, 2025CSV

A quasi-experimental study published in a peer-reviewed journal found no significant change in employment among low-income adults in Georgia compared to control states 15 months after implementation [15]. CMS extended the program through December 2026, but the evidence of its effectiveness remains thin [13].

What the Research Says About Work and Medicaid

The empirical case that Medicaid work requirements increase employment is weak. Multiple peer-reviewed studies — from Arkansas, Georgia, and broader analyses — have found no significant employment gains attributable to the mandates [10][11][15].

The premise that Medicaid itself discourages work is not supported by the balance of evidence. A Georgetown University Center for Children and Families review of the research literature found that a higher share of enrollees in states that expanded Medicaid were employed (44%) compared to those in non-expansion states (37%), consistent with studies showing that coverage made it easier for people to look for and maintain work [16]. The Robert Wood Johnson Foundation has published analysis warning that work requirements "threaten health and increase costs" rather than promoting self-sufficiency [17].

The Commonwealth Fund projects that national Medicaid work requirements could trigger the loss of hundreds of thousands of jobs, as coverage losses reduce health care spending and the economic activity it supports [18].

Supporters of work requirements argue the policy promotes personal responsibility and that able-bodied adults should contribute to society in exchange for public benefits. Governor Pillen has framed Nebraska's early implementation as showing that "Nebraska leads" [5]. CMS Administrator Oz has expressed confidence that states will refine their systems over time, stating that "by the end of this year they will get into a more sophisticated place" [7].

Rural Hospitals on the Front Line

Nebraska's rural health infrastructure faces particular risk. The Nebraska Hospital Association has warned that the requirements could strain staffing, increase uncompensated care, and force cutbacks in services [19]. Critical access hospitals — often the only facility within a large geographic area — operate on narrow fiscal margins and depend heavily on Medicaid reimbursements [19].

Jeremy Nordquist, president of the Nebraska Hospital Association, said: "There is a lot of concern on many different levels" [7].

H.R. 1 also reduces retroactive Medicaid eligibility from three months to one month for expansion enrollees, meaning hospitals that provide emergency care to patients who lose coverage may not be reimbursed for those services [7]. One World Community Health Centers, a community health center serving Medicaid patients, projects a $500,000 revenue loss if just 10% of its 4,000 expansion patients lose coverage [7].

Source: FRED / Bureau of Labor Statistics

Data as of Mar 1, 2026CSV

With the national unemployment rate at 4.3% as of March 2026, and Nebraska's rate at 3%, the vast majority of affected enrollees are already working or face barriers — disability, caregiving responsibilities, health conditions — that make standard employment difficult [9][7].

Who Bears the Greatest Risk

Medicaid work requirements have historically affected communities of color disproportionately. Analysis of the Arkansas program found that Black Medicaid enrollees were more likely to lose coverage, in part because they were twice as likely to lack private vehicles and faced greater barriers to meeting reporting requirements [20]. Black women, who face maternal mortality rates three times higher than white women, stand to lose coverage that Medicaid expansion has helped reduce [20].

In Nebraska, specific demographic breakdowns of the at-risk population by race and county have not been published by DHHS. However, the state's combination of geographically isolated rural communities, significant provider shortages, and populations with limited broadband access mirrors the conditions that produced high procedural disenrollment rates in Arkansas [21][4].

Seasonal and gig workers face particular vulnerability. The 80-hour monthly threshold does not account for workers whose hours fluctuate — agricultural laborers, construction workers, and service-sector employees whose schedules vary month to month [9].

Legal Landscape

The legal terrain has shifted since the Gresham v. Azar ruling. H.R. 1 imposes work requirements through federal statute rather than through Section 1115 waivers, which changes the legal framework [1]. The D.C. Circuit's holding that HHS must consider coverage loss when approving waivers may not directly apply to a congressionally mandated program [12].

However, legal advocates are examining potential challenges on other grounds. The Americans with Disabilities Act and Section 504 of the Rehabilitation Act could provide a basis for claims that work requirements discriminate against people with disabilities who face barriers to obtaining and documenting exemptions [6]. Equal protection arguments may arise if the policy's effects fall disproportionately on racial minorities [20].

Legal Aid of Nebraska has been providing guidance to affected residents on how to claim exemptions and maintain coverage [22]. National health law organizations are monitoring Nebraska's implementation for potential test cases [6].

What Happens Next

Nebraska is the leading edge of a national rollout. Montana plans to begin enforcement in July 2026, Iowa in December 2026, and all remaining expansion states face the January 2027 deadline [7]. How Nebraska's implementation unfolds — the rate of coverage loss, the accuracy of exemption processing, the burden on hospitals — will shape how other states design their programs.

Schmeeka Simpson, a 46-year-old Nebraskan who works three jobs, put it simply: "Adding more barriers won't make the program work any better" [7].

Crystal Schroer, 30, who has been unemployed since 2024 and relies on Medicaid for mental health treatment, described the anxiety of the new mandate: "It's made my depression way worse" [7].

The policy is now in effect. The data from the months ahead will determine whether Nebraska's early start was prudent leadership or a premature experiment with real human costs.