Nebraska Medicaid costs hit $8.2 million

Nebraska has spent $8.2 million on contractors to implement Medicaid work requirements that took effect May 1. The state was the first to enforce these rules under the One Big Beautiful Bill Act, acting eight months ahead of the federal timeline. This early rollout has drawn scrutiny over cost and administrative strain.

State documents obtained via public records request show payments to Public Consulting Group and Covendis over a two-year period. At least six contractors each cost more than $250,000. One individual received compensation exceeding $1.8 million. Jeff Powell, a spokesperson for the Nebraska Department of Health and Human Services, noted that these funding requests might not reflect final expenditures.

The new rules require approximately 70,000 adult Medicaid recipients in the state to prove 80 hours of monthly work or similar activity. Those who cannot demonstrate this activity must qualify for a specific exemption. The state reported that 86% of affected applicants met the requirement or qualified for an exclusion. Additionally, 93% of existing enrollees retained their coverage.

Eli McCreary, a 64-year-old Omaha resident diagnosed with kidney cancer in June, illustrates the administrative friction. McCreary was told by a local hospital that he lost coverage because he failed a work requirement. He contacted a call center, where a representative stated he had not fulfilled the requirement. McCreary, who also has diabetes and COPD, canceled a CT scan and delayed other appointments. He believes his health conditions should have exempted him under federal law.

Sarah Maresh, a program director with Nebraska Appleseed, described the contractor costs as shocking. Advocates cite poor training and inadequate staffing as primary issues. Internal state documents called denials due to unsubmitted paperwork expected. Call center wait times nearly doubled between May and July, rising from 13 minutes to 26 minutes. The state received over 101,000 calls in August, a 66% increase from May.

Federal regulators did not issue detailed regulations on exemptions until June 1. Nebraska relied on broad statutory language for initial decisions. Jacob Kawamoto, a deputy director at the state Medicaid division, acknowledged the difficulty during a sprint to implementation. Brent Weaver, a Medicaid IT official at the Centers for Medicare & Medicaid Services, recalled the federal reaction to the May 1 start date with shock.

The Congressional Budget Office estimates the policy will leave 5.3 million more people uninsured by 2034. Work requirements will apply to millions of enrollees in more than 40 states next year. Democrats plan to repeal the changes within their first 100 hours in Congress next January, though a presidential veto remains a possibility.