Nebraska plans to be the first state to implement Trump’s new Medicaid work requirements

Nebraska will become the first state to implement new work requirements for some people with Medicaid health insurance under a law President Donald Trump signed last year.

Gov. Jim Pillen, a Republican, announced Wednesday that the requirement would take effect in the state May 1 and could impact about 30,000 people who have slightly higher incomes than traditional Medicaid beneficiaries.

“We’re not here to take everybody to the curb,” he said. Instead, he said, the aim is “making sure we get every able-bodied Nebraskan to be part of our community.”

The sweeping tax and policy law Trump signed in July requires states to make sure many recipients are working by 2027 but gave them the option to do it sooner.

Beneficiaries will have more reporting duties

The law mandates that people ages 19 to 64 who have Medicaid coverage work or perform community service at least 80 hours a month or be enrolled in school at least half-time to receive and keep coverage.

It applies only to people who receive Medicaid coverage through an expansion that covers a population with a slightly higher income limit. Forty states and the District of Columbia have opted to expand the coverage income guidelines under former President Barrack Obama’s 2010 health insurance overhaul.

Of 346,000 Nebraska residents enrolled in Medicaid as of May, about 72,000 were in the higher income expansion group.

Some people will be exempted, including disabled veterans, pregnant women, parents and guardians of dependent children under 14 or disabled individuals, people who were recently released from incarceration, those who are homeless and people getting addiction treatment. States can also offer short-term hardships for others if they choose.

All Medicaid beneficiaries who are eligible because of the expansion will be required to submit paperwork at least every six months showing they meet the mandate.

Those who don’t would lose their coverage.

The reporting requirement is twice as frequent as it is for most people covered by Medicaid now. That change means more work for the state agencies — and for some of them, extensive and likely expensive computer program updates.

Pillen said he does not expect the state government to increase staffing to make the changes.

When and how to implement the change is likely to be on the agenda for governors and state lawmakers across the country as legislative sessions start — most of them in January.

The policy is expected to lead to lost coverage

The nonpartisan Congressional Budget Office estimates that the requirement will reduce Medicaid costs by $326 billion over a decade — and that it will result in 4.5 million people becoming uninsured each year starting in 2027. Currently, about 77 million Americans are covered by Medicaid.

Because most people covered by Medicaid who are able to work already do, it’s not expected to increase employment rates.

Mehmet Oz, the administrator of the Centers of Medicare and Medicaid Services, joined Pillen’s announcement via a video feed and said the administration believes there are jobs available across the country, and the challenge is connecting people with them.

“Most people who are able-bodied on Medicaid actually want to get a job,” Oz said.

Georgia implemented similar requirements in 2023. Far fewer people are covered than projected, in part because of the work and reporting requirements.

Arkansas tried another variation of Medicaid work requirements — later blocked by a judge — that saw 18,000 people kicked off coverage in the first seven months after it took effect in 2018.