1st state enacts Medicaid work rules under HR 1: What healthcare leaders need to know

On May 1, Nebraska becomes the first state to launch Medicaid work requirements under HR 1, setting the stage as other states prepare to follow suit by 2027.

The community engagement requirements will apply to adults — with some exceptions — in states’ expanded Medicaid programs. Enrollees must work, engage in community service or attend school — or some combination of these — for at least 80 hours per month. This includes half-time students and seasonal workers whose average monthly income over the preceding six months matched the federal minimum wage.

In December, Nebraska Public Media reported that more than 70,000 Nebraskans were supposed to be notified of the work requirements. Of those, roughly 30,000 will need to take steps to comply, Nebraska Republican Gov. Jim Pillen said. The Nebraska Examiner recently reported the state’s department of health and human services does not plan on hiring more staff as it works toward implementation. The department said existing staffers have the “foundational expertise” to assume responsibilities.

While expansion states have until 2027 to align with HR 1’s provisions, Nebraska is going first thanks to a state plan amendment. Other states could also get a headstart through a waiver, and several states have waivers awaiting CMS’ greenlight. In July, Montana plans to move forward with work requirements, while Arkansas anticipates a soft launch. While Iowa leaders planned to roll out work requirements this year, state documents point to implementation in 2027.

Georgia has not fully expanded Medicaid, but the state launched its own work requirements in 2023. A September Government Accountability Office report found Georgia spent $54 million to test its work requirements while enrollment fell short, resulting in steep administrative spend per enrollee.

Not all states are full speed ahead. Last June, a news release from California Democratic Gov. Gavin Newsom estimated the HR 1’s work requirements would lead to an estimated loss of up to a $22.3 billion in federal funding, as well as a decrease of 3 million California enrollees.

In 2028, between 4.9 million and 10.1 million fewer people could be enrolled through Medicaid expansion in an average month due to the work requirements and more frequent redeterminations. A Commonwealth Fund analysis also determined operating margins for hospitals in expansion states could drop by up to 13.3% under the requirements.

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