Full Breakdown
Nebraska Leads Early Test of Federal Medicaid Work Requirements
6/6/2026, 7:02:59 AM
Legislative Background and Federal Mandate
The “One Big Beautiful Bill Act,” signed by President Donald Trump in the summer of 2025, added “community-engagement requirements” to Medicaid for low-income adults and people with disabilities. The rule, issued by the Centers for Medicare & Medicaid Services (CMS) on June 1 2026, obliges enrollees in 43 states and the District of Columbia to work, volunteer, or attend school at least 80 hours per month—or earn $580, the equivalent of 80 hours at the federal minimum wage—by the start of 2027. Exemptions include parents of children 13 or younger, veterans with disabilities, pregnant people, and those classified as “medically frail.” The CMS rule adopts a more restrictive definition of medical frailty, limiting states’ ability to exempt individuals based solely on diagnosis.
Nebraska’s Early Implementation
Nebraska became the first state to enact the requirements on May 1 2026, eight months ahead of the federal deadline. The state applied the rule to new applicants, requiring proof of compliance or an exemption in the month preceding enrollment. Existing enrollees renewing in May or June are exempt; the first affected re-enrollees are those with July renewals. Approximately 72,000 Nebraskans are enrolled in the state’s Medicaid expansion.
Operational Details and Exemptions
Compliance can be demonstrated by (1) 80 hours of paid work, (2) 80 hours of community service, (3) participation in a work program, (4) half-time school enrollment, or (5) meeting the $580 income threshold. Seasonal workers may average the income over six months. Nebraska lists nearly 300 conditions that may qualify as “medically frail,” but verification relies on primary diagnosis codes and a 12-month claims review, creating challenges for individuals whose conditions are not captured in recent visits.
Projected Impact and Data
The Congressional Budget Office estimates the work requirements will save the federal government $326 billion over ten years while causing roughly 5 million people to lose Medicaid coverage annually between 2029 and 2034. The rule is part of a $900 billion Medicaid cut, with work requirements accounting for about one-third of that reduction. Prior state experiments—Arkansas (18,000 losses in 2018) and New Hampshire (? one-third of expansion population non-compliant)—suggest substantial enrollment drops despite high exemption rates.
Official Government Statements
CMS frames the rule as a measure to curb fraud and waste, directing states to verify work or exemption status at least once per six-month enrollment period and to accept limited self-declaration when data are unavailable. The Trump administration, via CMS Administrator Dr. Mehmet Oz, described the prior system as “perverted” and asserted that the new requirements will restore integrity. The Paragon Health Institute, a conservative policy group, praised the rule as “the appropriate balance between program integrity and accommodations.”
Criticism and Opposition from Experts and Advocacy Groups
Health-policy scholars warn that the requirements will likely cause “hundreds of thousands” of eligible individuals to lose coverage. Dr. Ben Sommers (Harvard) notes that past implementations produced coverage losses without measurable employment gains. Advocacy coalitions—including 48 patient organizations, the American Academy of Pediatrics, and the HIV + Hepatitis Policy Institute—have condemned the narrow exemption criteria, arguing they jeopardize treatment for serious illnesses such as cancer and HIV.
On-the-Ground Reports from Nebraska
Amy Behnke, CEO of the Health Center Association of Nebraska, reported that the organization enrolled no new Medicaid recipients after the May rollout, a stark contrast to its typical 15-person monthly enrollment. She cited misdirected Spanish-language calls and an instance where an applicant was mistakenly disenrolled after reporting unemployment.
Conflicting Estimates and Gaps
Estimates of future coverage loss vary: CBO projects 5 million annual losses, while Sommers emphasizes “tens of thousands” based on earlier state pilots. The CMS rule does not provide a definitive list of qualifying diagnoses for medical frailty, leaving states to interpret eligibility, which may widen the gap between projected and actual outcomes.
Verbatim Quotes
- “If you're sitting at home, which is true for the millions of people who are able-bodied on Medicaid, on average, you're spending 6.1 hours watching television, or just hanging around,” — Dr. Mehmet Oz, CMS Administrator
- “That's also a really good example when we say the rules and the processes on paper may not look overly burdensome, but when we come to the application of it, that's where we start to really see the bumps in the road,” — Amy Behnke, CEO, Health Center Association of Nebraska
- “We're just going to lose people to Medicaid and then they're going to get sick and then they're going to die,” — Carl Schmid, Executive Director, HIV + Hepatitis Policy Institute
- “The new burdensome requirements that many parents will face under this rule will ultimately undermine families' health and financial stability,” — Dr. Andrew D. Racine, President, American Academy of Pediatrics
- “We know from past experience in Medicaid and other programs that it's usually the eligible people who lose coverage because of the work requirement,” — Jennifer Wagner, Analyst, Center on Budget and Policy Priorities
Upcoming Developments
The CMS interim final rule remains open for public comment until July 2026, and several advocacy groups have announced plans to file lawsuits. States are expected to finalize their verification systems throughout 2026, with many slated to launch the requirements by January 1 2027.
