On May 1, Nebraska will become the first state to put in place new punitive requirements from the 2025 budget bill HR 1. This law creates new red tape for people enrolled in, or wanting to enroll in, Medicaid expansion coverage, requiring people to repeatedly file paperwork showing that they are working or qualify for an exemption. Despite the high rate of employment or qualifying exemptions—like caregiving, medical frailty, or school attendance—for this population, the Congressional Budget Office (CBO) projected these requirements will kick over 5 million people out of Medicaid, many for paperwork or process failures alone. Other analysis predicts even greater losses.
Nebraska Rushing Ahead
The work and reporting requirement aspect of HR 1 does not go into effect nationwide until January 1, 2027. Final regulations that establish national guidelines have not yet been released. The state burden of creating and enforcing these new validations systems without disruption for those who meet all requirements will be high, requiring investments of time and labor to determine how to put the rules in place and testing to ensure that those who are working, have an exemption, or are not subject to the new requirements at all are not impacted.
Final regulations that establish national guidelines have not yet been released.
Despite this, Nebraska has rushed ahead.
Work and Reporting Requirements Do Not Help People Find Jobs
Previous analysis from CBO estimated that Medicaid work requirements would lead to a higher number of people without insurance coverage, a rise in state costs, and no increase in employment for those subject to the requirement.
In Arkansas, 18,000 people lost coverage when a new work requirement law went into effect.
This is in line with findings from pre-HR 1 efforts in states like Arkansas where 18,000 people lost coverage when a new law went into effect. When states erect new barriers to getting and staying enrolled, technical problems, lack of information, and poorly designed state systems, not the underlying eligibility change, largely drive the fall in enrollees.
Law Goes Into Effect Nationally on January 1
While Nebraska jumped the gun on establishing these new administrative burdens, the work and reporting requirement law goes into effect for all states on January 1, 2027. Some states may be able to seek and receive “good faith” waivers to temporarily delay implementation, but all states will eventually have to comply.
Likely Harms to Older Adults and People With Disabilities
As states ramp up work and reporting requirements, older adults and people with disabilities are likely to be affected in three major ways: (1) State staffing and resources will be aimed at implementing these new requirements; (2) Data errors will likely lead to some dually eligible people losing coverage despite their statutory exclusion; and (3) Home care workers and other caregivers may lose their own health insurance coverage and be unable to continue to provide vital assistance.
Congress Can Still Reverse Course
Despite Nebraska’s action, Congress could still reverse course and stop HR 1’s punitive and harmful cuts from going into effect. At Medicare Rights, we are deeply concerned that HR 1 will lead to higher uninsured numbers, economic instability, greater suffering, and worse health for millions of people. We urge policymakers to shift gears entirely and focus on increasing access to care and coverage.
Further Reading
Follow KFF’s Medicaid Work Requirements Tracker for additional state-by-state information.
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