Background

Medicaid work requirements were established as part of the One Big Beautiful Bill Act (OBBBA), which was passed in July of last year.

In June, CMS published a final rule implementing the work requirements, establishing the standards states are required to use, including those exempt from the requirements, how to verify those exemptions, and state reporting requirements.

The work requirements will apply to adults enrolled in Medicaid through the program's expansion under the Affordable Care Act and to those with lower incomes who are not also enrolled in Medicare. There are several exceptions to the requirements, including for individuals who are pregnant or postpartum, disabled or medically frail, and parents and caretakers of children under the age of 14.

Under the rule, those who aren't exempt must prove they spent at least 80 hours per month either working, performing community service, or engaged in education at least half-time.

States have attempted some form of Medicaid work requirements in the past. In June 2018, Arkansas became the first state to implement such a program, requiring adults ages 30-49 to work 20 hours a week, participate in "community engagement" activities, or qualify for an exemption to maintain coverage.

According to an NIH study published in 2021, researchers found that 18,000 adults had already lost coverage due to Arkansas' work requirements by the time a federal judge had put them on hold in April 2019. They also found that work requirements didn't increase employment over 18 months of follow-up, and that 30- to 49-year-olds in the state who lost Medicaid in the prior year experienced adverse consequences, including:

• 50% who reported serious problems paying off medical debt
• 56% who delayed care due to cost
• 64% who delayed medications due to cost

How Nebraska's work requirements program is faring

From May through July, Nebraska processed 6,985 new applications, according to state records. The state denied 3,615 applications, including 336 due to work requirements and 3,279 for "any other reason," like procedural denials or ineligibility because of income.

The state issued a short-term hardship exemption for Dawson County due to high unemployment rates following the closure of a meatpacking plant.

According to healthcare providers and advocates, there has been a lot of misinformation and confusion over who is subject to the work requirements and how they can comply, as well as long wait times for assistance on the state's phone line.

Angela Lindstrom, from the Health Center Association of Nebraska (HCAN), said some residents have waited up to 90 minutes on the phone to get questions answered.

Lindstrom added that the new requirements have not only confused Medicaid enrollees and applicants but also some state workers who have been tasked with implementing the changes. For example, a pregnant applicant was denied coverage despite being eligible because the state missed that she was pregnant on her application.

"The rushed implementation has clearly caused significant issues in our state," said Sarah Maresh, program director for healthcare access at the advocacy group Nebraska Appleseed.

Nebraska has also run into trouble with the federal government, as some aspects of its program — such its medical frailty policies — don't comply with CMS' final rule published in June. CMS gave Nebraska 30 days to explain how it will adjust its program to align with federal requirements.

Meanwhile, community health centers in Nebraska are fielding pleas for help with navigating the state's verification systems that enrollees and applicants have to use to report their work records, according to Amy Behnke, CEO of HCAN.

Behnke said clinics are also seeing a decline in Medicaid patients, though that's likely due to a mixture of both work requirements and other factors. The clinics are closely monitoring their case mix and maximizing operational efficiencies so they're able to stretch their finances as far as they can and are doing everything possible to make sure Medicaid enrollees and eligible applicants are getting or keeping their coverage, Behnke added.

Laura Gamble, CEO of Pender Community Hospital, a critical access hospital, said her hospital has been training staff on work requirements and educating enrollees to help mitigate any fallout. While Gamble said she hasn't seen a significant increase in uncompensated care yet, she's preparing for it as more enrollees go through eligibility checks.

"We're going to probably be sending more people to collections. We're preparing that we're probably going to be seeing more people that will have to be on charity care or write-offs. We don't like to send anybody to collections. That is not our goal," she said. "That's why we're trying to do the education with the people that have Medicaid."