Nebraska Medicaid Work Rules Cut Off 7% of Enrollees, Mostly Over Missing Paperwork, KFF Data Show

Nebraska has now run Medicaid work requirements for several months, and the first numbers are in. They show a program that mostly sorts people into exemptions, and a smaller group that falls out over paperwork.

Nebraska started enforcing the rules on May 1, 2026, the first state to do so under the 2025 tax and spending law. Every state with Medicaid expansion must have its own version running by January 1, 2027.

What Nebraska's early numbers show

A KFF brief on Nebraska's early data found that 57% of people subject to the requirements qualified for an exclusion and kept coverage. That group includes medically frail people, parents and caregivers. Another 46% were already working or meeting other qualifying activities, such as education. The categories overlap, since some people fell into more than one.

Among new applicants, 14% were denied. Among people already enrolled, 7% lost coverage.

KFF notes that most of those denials were not affirmative findings of ineligibility. Most came from missing documentation or information. The data cannot say how many of the people cut off would have failed the rules and how many simply could not prove their hours, did not understand the requirements, or were wrongly screened by the state.

The rules require most adults without dependents to document at least 80 hours a month of work, schooling or other approved activity.

A rushed launch

Nebraska went live before the Trump administration released its rule explaining how it reads the law. According to the Medicare Rights Center's reading of the KFF material, the state will likely have to rework some of its newly built processes, and the federal standards may prove stricter or harder to administer.

Human Rights Watch, Oxfam America and Nebraska Appleseed called the rollout chaotic in a joint statement. They interviewed a dozen Nebraskans in August and September, plus one public employee involved in the process. One man, Eli McCreary, then 64, said he lost coverage during treatment for kidney cancer because his health plan told him he was not working. "If I could work, I would work," he said. His cancer specialist appointment was canceled. A Medicaid eligibility worker at Nebraska's Department of Health and Human Services described poor training, vague and inconsistent guidance, and technical problems.

Those accounts are from advocacy groups with a stated position against the requirements, and they are drawn from a small number of interviews. They are individual cases, not a statewide count.

Montana began its rollout in July with an October 1 compliance deadline. There has been widespread confusion among enrollees, and the state acknowledged in early September that most of the staff needed to run the new systems had not yet been hired. Montana says it is "prepared." Arkansas is the third state that started early.

The fight over proof

The sharpest dispute is how someone shows they are too sick to work. Federal rules let a state take a recipient's word for it for the first year. At least six Republican-led states, Arkansas, Idaho, Indiana, New Hampshire, North Carolina and Ohio, have laws or policies that bar that and demand documentation starting next year.

The Foundation for Government Accountability, a conservative group, has pushed that approach. Jonathan Ingram, its vice president of research and policy, called self-attestation "fraud-by-design." He said it was "developed by bureaucrats to maximize enrollment at the expense of program integrity." The group argues that able-bodied adults are driving enrollment and costs higher.

Self-attestation is made under penalty of perjury, though criminal charges for lying are rare, according to PBS's reporting.

Missouri Rep. Darin Chappell, a Republican, worked with the group on a proposed constitutional amendment requiring "documentary evidence" of work or exemption. It passed the House and died in the Senate without a vote. He plans to try again next year. "If someone has a debilitating physical ailment — or mental ailment for that matter — something that prohibits them from working, that's totally legitimate," he said.

Jennifer Tolbert, director of state health policy and data at KFF, described the catch for new applicants. Someone too sick to work may not have seen a doctor because they cannot afford one, and that is why they are applying for Medicaid. "But Medicaid is saying you need documentation from a provider," she said. Democrats in 25 states are suing over the rules, arguing they are too harsh.

The national projections

The Congressional Budget Office estimated shortly after enactment that the law would cut federal Medicaid spending by $911 billion over 2025 to 2034 and leave 7.5 million more people uninsured in 2034. Counting changes to ACA Marketplace coverage and other provisions, the projected increase is 10 million. KFF attributes 5.3 million of the Medicaid-related total to the work requirements.

A pair of Urban Institute briefs funded by the Annie E. Casey Foundation estimate that up to 2.3 million adults ages 19 to 24 could lose Medicaid by 2028. Up to 3.4 million could lose some form of coverage once marketplace changes are counted. The briefs say the number depends heavily on state implementation choices. Eligibility checks will also move from annual to twice a year.

The law set aside $50 billion for a rural health transformation fund, and all 50 states have received first-year allotments. KFF says that money will not offset the reductions in federal Medicaid support.

KFF also cautions that current estimates are hard to separate from other trends. Medicaid enrollment was already falling and state budgets are tight. Newer estimates in proposed or final regulations are not comparable to the CBO's older figures.

The immigrant eligibility restrictions took effect October 1. The work requirements arrive in the other expansion states on January 1, 2027, and Nebraska will likely have to change its processes once the federal standards are applied to it.