Nebraska Spent $8.2 Million to Rush Medicaid Work Rules

By Daniel Okafor

Nebraska paid contractors $8.2 million to launch Medicaid work requirements eight months ahead of most states — and a 64-year-old kidney cancer patient was told mid-treatment that he had lost coverage.

Eli McCreary of Omaha said a hospital run by CHI Health called him shortly after his cancer diagnosis. He was told he no longer had Medicaid and would have to pay out of pocket or the hospital would cancel his appointments. A call center representative, he said, told him: "You're required to do work to stay on. And you haven't fulfilled your work requirement."

The requirement should not have applied to him. McCreary had completed four months of substance use treatment starting in November 2025 and suffers from diabetes, chronic obstructive pulmonary disease, and kidney cancer diagnosed in June. Attorneys and policy professionals said those conditions should have exempted him under the federal law's categories, which cover people considered too ill to work.

"I don't understand what job I can get," McCreary said. "I can't walk. I can hardly breathe. I can't move around. What job am I going to get?"

What did Nebraska actually build?

Nebraska launched its work requirements May 1 under President Donald Trump's One Big Beautiful Bill Act — the first state to enforce the policy. Roughly 70,000 adult Medicaid recipients must now prove 80 hours a month of work or a qualifying activity, unless they qualify for an exemption.

State documents obtained through a public records request outline $8.2 million in contractor costs over two years. The money went to two companies: Public Consulting Group of Boston and Atlanta-based Covendis, which supplies IT staffers. Nebraska listed at least half a dozen contractors costing more than $250,000 each, including one person whose compensation exceeds $1.8 million. The state submitted the records to federal Medicaid regulators to secure federal money. Department spokesperson Jeff Powell said the funding requests "may not reflect actual expenditures."

Sarah Maresh, a program director at Nebraska Appleseed, called the amounts "shocking."

"When you put in complicated policies like this, there are large corporations making money behind the scenes," Maresh said. "This just further confirms that it's happening in Nebraska quietly."

How did the rollout perform?

Powell said the rollout "has been very successful," pointing to state data showing 86% of affected applicants met the requirement or qualified for an exclusion, and 93% of existing enrollees kept coverage.

The operational data tells a harder story. Average call center wait times nearly doubled from about 13 minutes in May to 26 minutes in July. Nebraska received more than 101,000 calls in August, a 66% jump from May. As of August, roughly 1,100 Nebraskans had been denied benefits because of the work requirements — most because they did not respond to requests for information. Total Medicaid enrollment fell by roughly 4,600 people since May, a 1.4% drop.

Kenny McMorris, CEO of the Charles Drew Health Center in North Omaha, said roughly half of its 13,385 patients are on Medicaid, and 42% of those fall under the work requirements. "If people are working, they just don't have time to be sitting on the phone to go through all of this stuff," McMorris said. "You can leverage the technology, but you still got to have people there to help."

Gov. Jim Pillen said in December the state "won't be adding workforce" to implement the rules, and in July he imposed a government-wide hiring freeze. Pillen praised the policy alongside Mehmet Oz, the Trump administration official overseeing Medicare and Medicaid: "We're excited to be able to be the first to make it happen."

Who advised the state?

CMS had not issued regulations on key details such as exemptions when Nebraska went live — it would do so June 1. State officials said they relied on the law's broad language.

"They said, 'We're going to go live May 1.' To which CMS said, 'Oh, my God!'" said Brent Weaver, a Medicaid IT official at CMS, during an August panel in Oregon.

"We had to get comfortable being uncomfortable," said Jacob Kawamoto, a deputy director at Nebraska's Medicaid division.

A group of 60 people held hours-long meetings three days a week, said Latanya Michaux, senior consultant at Public Consulting Group. "I really cannot brag enough about how well Nebraska handled this requirement," Michaux said. She added: "Even though it was not so easy, we definitely had fun standing up the Medicaid work requirement program."

The company's spokesperson, Alyssa Brown, said Public Consulting Group has advised Nebraska Medicaid since 2019 but that Nebraska developed the process guides and training itself. Maresh disputed the quality: "There are gaps" in the training materials, she said, and caseworkers "are confused."

Federal taxpayers carry most of the cost. Congress allocated $200 million in one-time funding to states, and federal rules pay up to 90% of state IT system changes.

What happened to the cancer patient?

McCreary canceled a CT scan and other tests, and delayed a cancer appointment with a visiting physician. "I missed my window of opportunity with him for another month," he said. The number he dialed for help was not the state's AccessNebraska center but a separate SNAP call center run by a private company.

Powell maintained McCreary experienced "no lapses in coverage" and was disenrolled after turning 65 — aging out of Medicaid and into Medicare before work requirements could apply. Gelila Selassie of Justice in Aging said his care should not have been disrupted.

McCreary now has Medicare, with Medicaid covering some costs. He rescheduled his appointments and had surgery in early November to remove his right kidney. "The cancer has grown so much," he said.

Next year the same requirements will reach millions of adults in more than 40 states. The Congressional Budget Office estimates the policy will leave 5.3 million more Americans uninsured by 2034 — with Nebraska's early data now the reference case for what speed costs.