Nebraska Started Enforcing Medicaid Work Rules in May. Economists Say a Million Jobs Are at Stake.
On May 1, 2026, Nebraska became the first state to begin enforcing Medicaid work requirements created by the 2025 reconciliation law, ahead of the national deadline. Montana follows on July 1, 2026. Arkansas begins a soft launch the same day, without disenrolling anyone until January 1, 2027. Iowa starts December 1, 2026. The national requirement does not formally take effect until December 31, 2026, but a handful of states are not waiting.
A report from the Commonwealth Fund and the George Washington University Milken Institute School of Public Health estimates that if the Medicaid and SNAP cuts in the same law are implemented as written, the country could lose more than 1 million jobs in 2026 alone, with state economies shrinking by a combined $113 billion.
What’s Actually in the Law
The 2025 reconciliation law, Public Law 119-21, conditions Medicaid eligibility for adults ages 19 to 64 in the Affordable Care Act expansion group on completing 80 hours per month of work, school, or other qualifying activity. States must verify compliance and will move to checking eligibility every six months instead of every twelve, starting in December 2026. The law also tightened SNAP work requirements, with the Agriculture Department’s implementation guidance requiring states to apply the new rules by November 2, 2025.
The Congressional Budget Office and independent researchers have repeatedly found that work requirements do not meaningfully increase employment among people already subject to them, because most beneficiaries are already working, caregiving, in school, or unable to work, and the primary effect is procedural: people who are working lose coverage anyway because they fail paperwork or reporting requirements, not because they fail to meet the underlying work standard.
Three States Are Moving Early
Nebraska, Montana, Arkansas, and Iowa all sought early implementation through state plan amendments rather than waiting for the December 31, 2026 federal deadline. Arkansas has been explicit that its July 1 start is a soft launch, building out verification systems and member outreach before anyone is removed from coverage, with disenrollment not beginning until 2027. The Center on Budget and Policy Priorities has warned states need more time to build the eligibility-checking infrastructure the law requires, and has published implementation guidance aimed at reducing the number of eligible people who lose coverage purely from reporting failures.
The Price Tag, By the Numbers
The Commonwealth Fund and GW Milken Institute analysis breaks the projected 2026 toll into two programs. Medicaid cuts alone are projected to eliminate 477,000 healthcare jobs, concentrated in hospitals, skilled nursing facilities, and physicians’ offices, while shrinking state GDPs by a combined $95 billion. SNAP cuts are projected to eliminate 143,000 jobs nationally, including 78,000 in food-related sectors like grocery stores, agriculture, and food production, and another 65,000 in other industries affected by reduced consumer spending, while shrinking state GDPs by $18 billion. The researchers separately estimate $8.8 billion in lost state and local tax revenue in 2026 from the combined cuts.
Who Pays First
The Commonwealth Fund’s state-by-state breakdown found that states with larger shares of low-income residents enrolled in Medicaid and SNAP face the steepest job losses, because those programs make up a larger share of local healthcare and food-retail spending in those states. Nebraska, Montana, Arkansas, and Iowa, the four states moving ahead of the federal deadline, are themselves among the states the report flags as more exposed to the combined economic impact, because rural hospitals and food retailers in lower-income counties depend more heavily on Medicaid and SNAP dollars circulating through the local economy.
Where It Stands
The national work requirement deadline is still more than six months away, but four states are already running the clock early, and a documented economic projection now exists for what happens if the rest of the country follows on schedule. Human Rights Watch warned in May 2026 that work requirements risk coverage loss for millions of people regardless of whether they meet the underlying work standard. The jobs and GDP numbers describe what happens to the economy around those people, the hospitals, nursing homes, and grocery stores in the same counties, whether or not the paperwork goes through.