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Nebraska Launching Punitive Medicaid Work Requirements Early, Even as States Lack Information and Time
All eyes are on Nebraska this week as it becomes the first state to implement a policy taking Medicaid coverage away from people not meeting work requirements. It’s doing this well ahead of the harmful Republican megabill’s (H.R. 1) deadline of January 1 — which is itself a rushed timeline. Key implementation questions remain unanswered amid a lack of federal guidance, and states have limited capacity to handle such a massive change, especially under such a compressed timeline.
States are in a difficult spot: the work requirements in H.R. 1 are so damaging, and its Medicaid cuts so deep, that widespread harm and barriers to care are expected in all states, regardless of when they implement the policy. Rushing implementation will likely only make these problems worse.
At their core, work requirements keep people from or take away health coverage, and indeed people will lose coverage by the millions, even if they are eligible. This conclusion is supported by ill-fated, real-world experiences in Arkansas and Georgia, as well as recent estimates from the Urban Institute which find 4.9 million people (with a range of 3 to 7 million) are projected to lose Medicaid coverage in 2028 from H.R. 1’s new mandate. The same research estimates that even more people (8 million on average, with a range of 4.9 to 10.1 million) will lose Medicaid coverage in 2028 due to the combination of work requirements and the megabill’s burdensome requirement that eligibility be redetermined more frequently for people getting Medicaid through the Affordable Care Act’s expansion to low-income people.
In Nebraska, around 25,000 people are projected to lose Medicaid coverage from the two provisions, equivalent to a 35 percent decline in the Medicaid expansion population. No amount of time, state implementation choices, or communication efforts will fix the fundamental flaws inherent in the policy.
States had less than 18 months between the enactment of H.R. 1 and the required January 1, 2027, implementation of work requirements. This timeline is problematic in and of itself given the massive systems changes required to operationalize the provision.
However, the rollout is likely to be even worse due to the lack of timely guidance and important specifics from the Centers for Medicare & Medicaid Services (CMS). CMS is not required to release a final rule on work requirements until June 1 (less than three months before most states must send out notices to enrollees subject to the policy). To date, CMS has not released substantive public guidance, leaving states trying to build systems without final policy decisions that are critical to implementation.
Against this backdrop, Nebraska has decided to rush ahead with implementing work requirements May 1, making it harder, sooner, for people to get and keep their Medicaid coverage. The self-inflicted, accelerated timeline poses more acute harm for enrollees since the state is proceeding without adequate guidance, with rushed system development and testing, and without the time for robust stakeholder feedback. The state also has failed to invest in additional staff, and local stakeholders have noted limited outreach by the state and the likelihood of confusion among enrollees.
And the chaos and confusion will not be limited to the Medicaid expansion population that is subject to the work requirements. The effects could also hit people who should be exempt or to whom the policy should not apply, such as children, some parents, and pregnant people. Because the state has explicitly said it would not be hiring additional staffing, application processing times could increase, leading to potential enrollment delays for eligible people across all Medicaid populations. Similarly, all enrollees are likely to face longer call wait times as more people seek assistance to navigate new requirements; and those who need but don’t get that assistance may fail to enroll in or keep coverage.
Nebraska seems likely to become another example of how work requirements keep eligible people from getting their basic needs met. The first signs of harm will likely be anecdotal reports from people who are unable to enroll in coverage or confused about how to meet the new requirements. Then in August, under the state’s current plans, we may see reports of existing enrollees who can’t overcome the policy’s red tape and lose coverage despite working or having an exemption. (See timeline.) For example, providers or pharmacists may report individuals showing up for appointments or to fill medications only to realize they have lost coverage, indicating insufficient outreach or general enrollee confusion about how to navigate the new requirements. Measurable data on how the requirements are impacting enrollees — or key measures like call center wait times and procedural disenrollments — will take time and may depend on how transparent the state or CMS is willing to be.
Given how fast the state is moving, Nebraska can opt for the “hold harmless” period CMS has made available to early adopter states, under which people wouldn’t lose coverage if they don’t meet the work requirement or show that they are exempt. While a “hold harmless” period is the least the state could do to protect people given the warp speed and lack of information it is operating on, enrollees will still face chaos and confusion.
Though Nebraska is at the forefront of the nation’s focus on work requirements, Montana will follow soon after, and 42 states and D.C. will soon have this punitive policy in place. While red tape and coverage losses are intrinsic to work requirements, and much harm to low-income people can’t be avoided regardless of the timing, states should take as much care as they can. CMS, meanwhile, should grant state implementation delays, and best yet, Congress should repeal this harmful law.