Neb. Medicaid work requirements yield 7% coverage losses

The first four months of Nebraska's Medicaid work requirements have resulted in 7% coverage losses and 14% coverage denials, according to new KFF data. With more stringent verification protocols on the horizon in 2028, policymakers expect more people to fall off the Medicaid rolls nationwide.

Nebraska was the first state to implement Medicaid work requirements on May 1, 2026, meaning it could serve as a bellwether for what's to come for other states enacting the requirements by the Jan. 1, 2027, deadline. This latest analysis, which used information from Nebraska's September Medicaid Advisory Committee meeting, looked at 4,089 new Medicaid applications subject to work requirements and 7,280 total renewal applications.

Broadly speaking, the data showed that Medicaid work requirements are resulting in coverage losses.

Of the new applications submitted, 46% met qualifying community engagement requirements, such as working at least 80 hours per month, having a monthly household income of at least $580 or attending school. For renewal applications, that figure was 34%.

Most people fulfilling community engagement requirements for both new applications and renewals did so either by meeting the 80-hour monthly work requirement or the monthly income threshold.

About 4 in 10 (39%) of new Medicaid applications and 57% of renewals received a community engagement exemption. Being medically frail or a caregiver were the most common exemptions, although notably, 12% of new applications received an exemption for being American Indian or Alaska Native.

The remaining 14% of new applicants had their coverage denied, and 7% of renewal applicants lost their coverage because they did not fulfill work requirements or qualify for an exemption.

According to the KFF researchers, those coverage denials and losses could grow in the next year, as all states are required to adopt more stringent verification processes.

Currently, Nebraska uses publicly available data to verify whether an individual is hitting community engagement thresholds or qualifies for an exemption. When public data is not available, the state relies on self-declaration forms to verify information. The forms are sent by mail and require a 30-day turnaround, KFF reported.

But this self-attestation process is only allowed through the end of 2027. Starting in January 2028, all states must create systems that ask enrollees to submit formal verification that they meet work requirements or exclusion criteria.

This could become a future hurdle for the folks whose coverage was accepted or renewed this year.

Being the first state to enact Medicaid work requirements, Nebraska serves as a proving ground for how states can comply with the laws -- and the impact it might have on low-income individuals who rely on Medicaid. According to the KFF researchers, there's more to learn about Nebraska's experience, especially regarding individuals whose coverage was denied or ended.

More granular data could reveal what types of people fall into this category, such as whether they are gig workers or folks piecing together multiple part-time positions. Previous data has shown that these people would be particularly vulnerable to coverage losses, as they nearly miss the 80-hour threshold.

More data could also uncover these individuals' understanding of the Medicaid work requirements, especially the paperwork and attestation required.

The state's verification process for medical frailty is also in flux, with the CMS recently notifying Nebraska Medicaid leaders that the system needs to be realigned, KFF explained. KFF said that if the agency asked Nebraska to tighten its medical frailty verification, it could result in more coverage denials and losses.

Sara Heath is an executive editor at Xtelligent Healthcare Media, where she covers patient engagement, healthcare policy and health IT.