Nebraska is set to become the first state to implement new work requirements for some Medicaid recipients, following a law signed by President Donald Trump in July 2022. This mandate, announced by Republican Governor Jim Pillen, will take effect on May 1 and is expected to impact approximately 30,000 individuals who have incomes slightly above the traditional Medicaid beneficiary limits. Governor Pillen stated that the goal of these requirements is to encourage participation in the community among able-bodied Nebraskans rather than to eliminate support for those in need.
The law requires recipients aged 19 to 64 to either work or engage in community service for at least 80 hours a month, or be enrolled in school at least half-time, in order to qualify for and retain their Medicaid coverage. This provision targets individuals receiving Medicaid through an expansion that covers higher income limits—a policy designed under former President Barack Obama's Affordable Care Act (ACA) in 2010. As of May 2023, around 346,000 residents were enrolled in Nebraska's Medicaid program, with about 72,000 participants falling within the higher income expansion group.
Exemptions from these new work requirements will be available for certain populations, such as disabled veterans, pregnant women, parents or guardians of dependent children under 14, individuals who have recently been released from incarceration, the homeless, and those undergoing addiction treatment. Additionally, states have the option to offer short-term hardship exemptions for other individuals affected by the policy.
All beneficiaries eligible due to the expansion will be required to submit documentation every six months to show compliance with the work requirement, a significant increase from the current reporting frequency. This change is anticipated to create additional administrative burdens for state agencies, which may necessitate costly updates to their computer systems. Governor Pillen has indicated that he does not expect an increase in state staffing to accommodate these changes.
The introduction of these work requirements is expected to lead to coverage losses among Medicaid recipients. The nonpartisan Congressional Budget Office has estimated that, by 2027, approximately 4.5 million individuals will become uninsured each year as a result of the implementation of the new rules, contributing to an overall reduction of Medicaid costs by $326 billion over the next decade. Currently, around 77 million Americans rely on Medicaid for health coverage, with most already working and unlikely to see a significant increase in employment rates due to the new requirements.
During the announcement, Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services, expressed confidence in the availability of jobs across the country, emphasizing the importance of connecting people with job opportunities. Oz noted that many individuals capable of working who are currently on Medicaid are eager to find employment.
Prior to Nebraska's decision, other states such as Georgia and Arkansas attempted to implement similar work requirements with varying levels of success. Georgia enacted its own rules in 2023, but experienced a significant decrease in coverage due to the new mandates. Meanwhile, Arkansas faced legal challenges after implementing a similar program in 2018, which resulted in approximately 18,000 individuals losing their Medicaid coverage within the first seven months.
