Nebraska enforces Medicaid work requirements as federal rules take effect

Why it matters locally: Vermont has not adopted federal Medicaid work requirements, but the state may face pressure to implement similar rules as more states follow Nebraska's lead. Vermont's Medicaid enrollment and coverage decisions could be affected by federal policy shifts regarding work requirement waivers.

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Nebraska started enforcing federal Medicaid work requirements this year, making it among the first states to implement the new eligibility rules. The shift places the state in a position to provide early data on how the requirements affect enrollment and coverage across the country. The federal rules require non-disabled, non-elderly Medicaid recipients to work, participate in job training, or perform volunteer service for a set number of hours per month to maintain coverage. States that adopt the requirements must notify recipients of the conditions and track compliance. Recipients who fail to meet the requirements lose coverage unless they qualify for an exemption. Under the policy, people caring for dependents, those with documented disabilities, and recipients in certain rural areas face different requirements or exemptions. The federal government allows states to design their own implementation plans and exemption categories. Nebraska Medicaid enrollment figures from the months following implementation show a decline in the number of active recipients. State officials attributed some of the change to administrative processes as beneficiaries were notified of new requirements and asked to verify their work status or request exemptions. Officials did not specify what portion of disenrollment resulted from failed compliance, voluntary withdrawal, or routine administrative transitions. National estimates suggest millions of people could lose Medicaid coverage as states implement the requirements. The Urban Institute and other research organizations projected coverage losses based on state implementation timelines and exemption policies. Actual figures have varied by state depending on how administrators processed the transition and how many recipients qualified for exemptions. State officials supporting the requirements argued that work conditions encourage economic participation and reduce long-term dependency on assistance programs. Opponents countered that the requirements create obstacles for people with unstable employment or caregiving obligations, though they acknowledged data on these effects remains limited. Nebraska's Department of Health and Human Services said it provided recipients with multiple channels to report work status, including phone and online systems. The agency stated it sent notices to affected beneficiaries and offered a 90-day compliance period before disenrollment. Advocacy groups working in Nebraska raised concerns about recipients losing coverage due to difficulty understanding the reporting process or meeting work hour thresholds while managing multiple jobs or caregiving. They requested additional extensions and clearer communication from the state, which officials evaluated on a case-by-case basis. The federal government approved work requirement waivers for 10 states under rules established in 2020. Expansion of the policy to additional states occurred after the change in federal administration in 2025. State officials in participating states are preparing implementation strategies and projecting enrollment impacts. Researchers plan to track enrollment and employment outcomes in states like Nebraska to assess whether the requirements correlate with increased workforce participation or whether coverage losses occur among people who already work.