Series 14: State Implementation of Work Requirements
On December 17, 2025, Governor Jim Pillen announced that Nebraska would become the first state in the nation to implement Medicaid work requirements under the One Big Beautiful Bill Act. Enforcement would begin May 1, 2026, seven months ahead of the federal deadline. By January 1, 2026, the state would begin notifying approximately 70,000 Heritage Health expansion adults through mail, phone, and text that new requirements were coming. Nebraska chose to implement through a state plan amendment rather than a Section 1115 waiver, bypassing the public comment periods and CMS negotiation that the waiver process requires.
The announcement transformed Nebraska from a reluctant implementer with a conflicted work requirement history into the proving ground for federal Medicaid work requirements. What happens in Nebraska between May and December 2026 will shape how every other state approaches the January 2027 deadline.
CMS Administrator Mehmet Oz praised the decision, emphasizing federal commitment to technology improvements and streamlined verification processes. Nebraska Appleseed, the state’s leading Medicaid advocacy organization, raised concerns about state readiness, anticipated error rates, and inadequate staff capacity to support navigation. Both reactions recognized the same reality: Nebraska was about to test, at speed, whether the federal work requirement framework could function without producing the kind of coverage losses that defined Arkansas’s 2018 experience.
State Profile#
Nebraska’s Heritage Health expansion population of approximately 72,000 adults is modest by national standards, smaller than a single large county in California or Ohio. Total Medicaid enrollment reaches roughly 346,000. The expansion population skews working-age, with about 50% between 25 and 44, 35% between 45 and 64, and 15% between 19 and 24. Approximately 80% are white, 12% Hispanic or Latino, 5% Black, and 2% Native American.
The state’s geography creates starkly different implementation environments. The Omaha metropolitan area (Douglas and Sarpy counties) contains 40% of the state population in less than 2% of the land area. The Lincoln metro adds another 17%. Combined, the Omaha-Lincoln corridor holds roughly 60% of Nebraskans. Beyond these two cities, more than half of the state’s 93 counties lost population between 2010 and 2020. Western Nebraska is classified as 55.5% frontier and remote. Twelve rural counties have populations under 1,000. Residents in western Nebraska may live 60 or more minutes from urban areas with populations above 50,000.
Nebraska’s unemployment rate of 2.5 to 3.0% is consistently among the lowest nationally, with only 39 to 66 workers available per 100 job openings depending on sector. The state cited over 100,000 unfilled positions as context for its accelerated timeline. Seventy-five percent of expansion adults are working, with 45% employed full-time. The primary compliance challenge will be documentation and verification rather than actual employment. People who are working may lose coverage not because they fail to meet hour requirements but because they cannot navigate reporting systems while working demanding schedules.
The Meatpacking Dynamic#
Nebraska’s economy depends heavily on meatpacking and food processing industries that employ large numbers of immigrants, including substantial undocumented populations. Towns like Lexington, Grand Island, Schuyler, Columbus, and Crete have been transformed by meatpacking plants. Hispanic populations now comprise 50% or more of some communities, and the statewide Hispanic population exceeds 10%.
Work requirements in these communities face unique complications. Many workers are employed full-time in physically demanding jobs but may lack formal documentation or employer cooperation with verification systems. Cash economy employment and employer reluctance to provide documentation create barriers to demonstrating compliance even for people who are clearly working.
The June 2025 immigration raid at Glenn Valley Foods in Omaha, which detained approximately 100 workers despite the company’s compliance with E-Verify, illustrates the precarious situation facing immigrant workers. Work requirement verification in meatpacking communities will need to navigate documentation challenges while avoiding creating additional fear that discourages enrollment among eligible populations. Workers who are employed 50 to 60 hours weekly in physically demanding jobs may lose coverage because employers will not provide documentation, workers fear immigration enforcement, or verification systems cannot accommodate non-standard employment arrangements.
Work Requirement History#
Nebraska has a conflicted relationship with work requirements that provides important context for the current moment. Voters approved Medicaid expansion through Initiative 427 in November 2018 with 53% support, overriding years of legislative resistance. Governor Pete Ricketts, who had opposed expansion, began implementation planning but sought to modify expansion through a Section 1115 waiver proposing a two-tiered benefit structure. Under this design, expansion enrollees would receive basic coverage at enrollment but would need to complete wellness and community engagement requirements to access prime benefits including dental, vision, and over-the-counter drug coverage.
CMS approved the waiver during the first Trump administration, and Nebraska launched expansion in October 2020 with the tiered structure in place. The system proved administratively complex and generated significant opposition. Nebraska Appleseed filed suit arguing the structure violated the terms of the ballot initiative. Following the Biden administration’s signal that work requirements would not be permitted, Nebraska abandoned the tiered system in June 2021. All expansion enrollees automatically received the full benefit package beginning October 1, 2021, and the infrastructure developed for work requirements was largely dismantled.
The abbreviated experiment revealed dynamics directly relevant to the current implementation. Administrative complexity created barriers even before enforcement began. The tiered structure confused both enrollees and providers about benefit availability. When the state abandoned the approach, enrollment stabilization improved significantly, reaching approximately 75,000, near the 90,000 originally projected but never achieved under the tiered system.
The Federal Framework and Early Implementation#
The OBBBA, signed July 4, 2025, requires states to condition Medicaid eligibility for expansion adults ages 19 to 64 on 80 hours monthly of work, education, training, or qualifying activity, effective January 1, 2027. The CMS Informational Bulletin of December 8, 2025, established data-first verification requirements, a 30-day cure period before termination, mandatory outreach by year-end 2026, and semi-annual redeterminations for the expansion population. Individuals losing coverage for noncompliance are barred from marketplace premium tax credits. Congress allocated $200 million in implementation funding.
Nebraska’s decision to implement early through a state plan amendment rather than a waiver carries both advantages and risks. The SPA pathway is faster, avoiding the public comment and CMS negotiation cycles. But it also means Nebraska implements with whatever flexibility the federal statute and CMS guidance provide, without the tailored exemptions and alternative designs that waiver authority could enable.
Geographic and Tribal Challenges#
Implementation approaches that work in Omaha will fail in Scottsbluff or Valentine. Internet connectivity remains limited in frontier areas. Travel times to employment centers or verification offices can exceed 60 minutes each way. The state must develop rural-appropriate verification methods or accept disproportionate coverage losses in already underserved communities.
Four federally recognized tribes maintain reservations in Nebraska, primarily in the northeastern part of the state. The Winnebago and Omaha reservations in Thurston County and the Santee Sioux and Ponca service areas in Knox County present distinct implementation challenges. Tribal members face potential jurisdictional complexity between state requirements and tribal sovereignty. The Winnebago Tribe’s economic success through Ho-Chunk Inc. has created employment opportunities on the reservation, but many tribal members work in seasonal or traditional activities that may not produce standard employment documentation. Nebraska has no recent experience with tribal Medicaid exemption administration.
Administrative Infrastructure#
Nebraska operates Medicaid through the Division of Medicaid and Long-Term Care within the Department of Health and Human Services. The Heritage Health managed care program contracts with three MCOs: Molina Healthcare of Nebraska, Nebraska Total Care (a Centene subsidiary), and UnitedHealthcare Community Plan of the Midlands. These contracts began January 1, 2024, and run for five years. The state implemented the iServe Nebraska integrated benefit application in October 2023, creating a single portal for food, utilities, and healthcare applications. A centralized credentialing system through Verisys reduced administrative burden on providers in 2024 and 2025.
The Pillen administration philosophically supports work requirements but had not invested in building independent verification infrastructure, having abandoned such efforts in 2021. The most likely approach involves leveraging existing workforce system connections, using SNAP coordination where possible, and relying on MCOs to manage navigation and compliance support. The Heritage Health MCOs, particularly Nebraska Total Care and UnitedHealthcare, bring national experience with compliance systems and social determinants navigation.
What Nebraska Will Test#
Nebraska’s early implementation creates a natural experiment that every other state will watch. Several questions will be answered by the time the federal deadline arrives in January 2027.
Can a state with a strong labor market and a small expansion population implement work requirements without significant coverage losses? Nebraska’s tight labor markets mean most enrollees are already working. If the state cannot maintain coverage under these favorable conditions, states with weaker labor markets face even steeper odds.
Does data-first verification actually reduce documentation burden? The CMS mandate to use reliable data sources before requesting enrollee documentation has not been tested at scale. Nebraska’s EDD data, SNAP records, and employer databases will reveal whether automated matching can identify compliance for the majority or whether significant populations fall through to manual verification.
Can meatpacking and agricultural communities navigate verification systems designed around standard employment? Nebraska’s workforce composition makes this question unavoidable. Workers who clearly meet hour requirements through physically demanding labor but cannot produce standard documentation will test whether the system recognizes work or merely recognizes paperwork.
How do advocacy concerns about error rates and staff capacity play out in practice? Nebraska Appleseed’s warnings about state readiness will be validated or refuted by actual implementation outcomes. The state’s 2021 experience abandoning the tiered benefit system suggests institutional memory about high-friction approaches, but whether that memory translates into coverage-protective implementation under federal mandate remains uncertain.
The Hospital Quality Assurance and Access Assessment Act (LB 1087), signed in 2024, creates a provider tax mechanism generating approximately $1 billion annually in additional federal Medicaid funding for Nebraska hospitals. Hospital systems now have substantial financial interest in maintaining Medicaid coverage. Coverage losses from work requirements would reduce patient volume and associated provider tax revenue, creating incentives to support navigation infrastructure that maintains enrollment.
Nebraska uses the federal healthcare.gov marketplace rather than a state-based exchange. Expansion adults losing Medicaid who earn above 100% FPL may qualify for marketplace coverage with premium tax credits, but the OBBBA’s exclusion of individuals terminated specifically for work requirement noncompliance eliminates this safety net for many.
Cross-Program Context#
Nebraska operates SNAP Employment and Training through the same department administering Medicaid. In June 2025, Governor Pillen signed LB 192, prohibiting the state from seeking SNAP work requirement waivers and permanently setting SNAP eligibility at 165% FPL. This ensures ABAWD requirements remain in effect statewide regardless of local unemployment conditions.
Deemed compliance between SNAP and Medicaid work requirements could significantly reduce verification burden. Many expansion adults also receive SNAP benefits, and automatic recognition of SNAP compliance would eliminate duplicate reporting. However, SNAP eligibility at 165% FPL creates a population receiving SNAP who earn too much for Medicaid, complicating cross-program coordination.
Nebraska’s TANF program includes standard work requirements for a small population, and TANF and Medicaid operate through the same department, creating coordination potential. The four federally recognized tribes operate health programs with varying levels of integration with state systems. Tribal-state coordination mechanisms for work requirement exemptions will require development under compressed timelines.
By the time other states begin implementation on January 1, 2027, Nebraska will have eight months of data on what works, what fails, and what the distance is between policy design and operational reality. That data will be the most valuable implementation resource available to any state.