Nebraska to Become First State to Launch Medicaid Work Requirements

Nebraska Gov. Jim Pillen said the state will be ready to move forward with the work requirements well before the federally mandated start date of Jan. 1, 2027.

Nebraska Gov. Jim Pillen speaks during a ceremony in Statuary Hall of the U.S. Capitol on June 7, 2023. Jim Watson/AFP via Getty Images

Nebraska plans to become the first state in the nation to implement work requirements for certain Medicaid recipients, with Gov. Jim Pillen and federal health officials announcing an accelerated rollout under provisions of the One Big Beautiful Bill Act (OBBB).

At a Dec. 17 news conference, Pillen said the state has formally notified the Centers for Medicare & Medicaid Services (CMS) of its intent to require Medicaid expansion enrollees to meet work or community engagement standards beginning May 1, 2026—well ahead of the federal compliance deadline.

The event was also attended by Nebraska Department of Health and Human Services CEO Steve Corsi, and remotely by CMS Administrator Dr. Mehmet Oz.

Under the new rules, able-bodied adults aged 19 to 64 enrolled through Medicaid expansion will be required to complete at least 80 hours per month of employment, education, job training, community service, or other qualifying activities to maintain coverage, unless they qualify for an exemption.

“These requirements will help Nebraskans achieve greater self-sufficiency through employment and other meaningful activities,” Pillen said.

“Working not only provides purpose but helps people become active, productive members of their communities.”

Pillen added that Nebraska will be ready to move forward with the work requirements well before the federally mandated start date of Jan. 1, 2027.

His office said that work requirements are associated with greater success in finding better-paid work and more stable incomes over time, and that higher employment rates are linked to lower crime rates. Children in working households also tend to have improved educational outcomes and stronger routines.

Federal Law Mandates Medicaid Work Rules

The work requirements stem from the OBBB Act, which President Donald Trump signed into law on July 4. The bill mandates work or community engagement conditions for most adults covered through Medicaid expansion nationwide. While it directs states to implement the requirements by the end of 2026, states may move sooner, as Nebraska now plans to do.

Oz, who joined the conference by video, praised Nebraska for acting quickly.

“Nebraska is leading the way as the first state to launch its community engagement requirements, and we congratulate Governor Pillen and his team for their commitment to helping more Nebraskans move toward greater independence and opportunity,” he said.

“CMS will be working together with Nebraska and its 50 counterparts to ensure every program is implemented smoothly, responsibly, and in compliance with federal law.”

According to state officials, the policy will apply only to the Medicaid expansion population—low-income adults earning up to 138 percent of the federal poverty level—while leaving traditional Medicaid groups unaffected. Children, pregnant women, seniors, and people who are blind or disabled are excluded from the requirement.

The Nebraska Department of Health and Human Services estimates that around 350,000 residents are enrolled in Medicaid, with Pillen saying that some 30,000 Nebraskans will be subject to the new work requirement once it is implemented.

Critics contend that the accelerated timeline could strain Nebraska’s eligibility system and lead to coverage losses among people who qualify for exemptions but struggle with paperwork or verification.

“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,” Nebraska Appleseed Health Care Access program director Sarah Maresh said in a statement.

“We know a vast majority of Nebraskans subject to these requirements work or meet an exemption to work requirements, but rushing to implement work requirements will cause them to lose coverage anyway.”

The Congressional Budget Office projected in June that 4.8 million able-bodied adults would lose Medicaid coverage by 2034 for failing to meet new work requirements under the OBBB.