Nebraska's Medicaid Work Rules Cost $8.2 Million
State officials spent millions on consultants to enforce new federal work requirements, even as call center wait times doubled.
By Lucas Collins ·
Nebraska spent $8.2 million on private contractors to administer new Medicaid work requirements that took effect on May 1. This figure comes from state documents obtained through a public records request. The costs cover two years of staffing and information technology support from Public Consulting Group and Covendis.
The state launched these rules eight months ahead of most other states. This early start was driven by a desire to be the first to enforce provisions of the One Big Beautiful Bill Act. Approximately 70,000 adult Medicaid recipients in Nebraska are now subject to these mandates. They must prove they work or participate in similar activities for 80 hours each month unless they qualify for an exemption.
Eli McCreary, a 64-year-old Omaha resident, experienced the confusion these rules can cause. He was diagnosed with kidney cancer in June after being discharged from a substance use treatment program in March. A hospital affiliated with CHI Health told him his Medicaid coverage had lapsed because he did not meet work requirements. McCreary said he canceled a CT scan and delayed other appointments to avoid out-of-pocket costs.
Jeff Powell, a spokesperson for Nebraska’s Department of Health and Human Services, said the rollout has been successful. He cited state data showing 93% of existing enrollees kept their coverage. However, internal documents indicate that most denials among new applicants in early July were due to unsubmitted paperwork. The state described this outcome as expected.
Operational strain is visible in call center metrics. Average wait times at the health department call center nearly doubled between May and July, rising from 13 minutes to 26 minutes. Total calls in August exceeded 101,000, a 66% jump from May. Kenny McMorris, CEO of the Charles Drew Health Center in North Omaha, noted that many of his patients work and cannot spend hours on the phone. About 42% of his Medicaid patients are subject to the work rules.
Governor Jim Pillen praised the federal administration for delivering the reform. In December, he stated that state officials appreciated the changes. Pillen also instituted a government-wide hiring freeze in July. Despite this, the state relied on contractors for specialized skills. One individual contractor received compensation exceeding $1.8 million.
Sarah Maresh, program director at Nebraska Appleseed, described the spending as shocking. She argued that large corporations are profiting from the complexity of the new policies. The state submitted these records to federal Medicaid regulators to secure funding, though Powell noted the requests may not reflect actual expenditures.
The Congressional Budget Office estimates the policy will leave 5.3 million more people uninsured by 2034. In Nebraska, the experience highlights the cost and administrative burden of the new federal framework. McCreary is still trying to understand why he was told to work while battling cancer, diabetes, and chronic obstructive pulmonary disease.
