States are entering the first phase of implementing new federal Medicaid work requirements, with Nebraska becoming the first state where some beneficiaries are beginning to lose coverage after failing to meet the reporting requirements.
Nebraska is the first state to implement the requirements ahead of the Jan. 1 national deadline. About 200 Medicaid beneficiaries are expected to lose coverage this week after failing to report qualifying activities, with each case undergoing multiple reviews before notifications are issued, according to a report published Monday by Axios, which cited the state’s Medicaid director.
Under the federal rules, certain Medicaid beneficiaries must complete at least 80 hours per month of qualifying work, education, community service or other approved activities, or qualify for an exemption, to maintain coverage. States are also required to verify compliance and generally provide beneficiaries with a 30-day notice period before terminating coverage, according to the Centers for Medicare & Medicaid Services (CMS).
Patient advocates and healthcare providers have warned the rollout could create confusion for beneficiaries and increase administrative burdens for physicians responsible for documenting medical exemptions.
Matt Salo, a healthcare consultant and former executive director of the National Association of Medicaid Directors, told Axios, “If that goes wrong, people are going to be really, really upset, and that is a political firestorm that nobody wants.”
Exemption Rules
The rollout follows CMS’ interim final rule issued in June outlining how states must implement the federal work requirements. The policy requires certain Medicaid recipients ages 19 to 64 to complete at least 80 hours each month of qualifying work, education, volunteer service or other approved activities unless they qualify for an exemption. CMS previously estimated the requirements could affect millions of beneficiaries as states update eligibility systems and verification processes.
Days later, CMS also tightened guidance for the program’s “medically frail” exemption. Beneficiaries with serious medical conditions must now demonstrate that those conditions significantly limit their ability to work or meet the monthly participation requirement, while states are responsible for determining exemption eligibility. Patient advocacy groups argued the stricter standard could make it harder for vulnerable individuals to retain coverage.
Medicaid Oversight
The Trump administration has also intensified oversight of Medicaid programs. Last month, the Centers for Medicare & Medicaid Services (CMS) paused more than $1 billion in federal Medicaid payments to California and Minnesota while reviewing suspected billing irregularities and directed states to strengthen Medicaid fraud controls. The payment deferrals did not affect Medicaid eligibility or benefits.
Separately, Vice President JD Vance‘s anti-fraud task force expanded enforcement efforts across Medicaid, Medicare and Affordable Care Act programs.
Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image via Shutterstock/ Drozd Irina
