Why It Matters
Nebraska is set to become the first state in the nation to implement Medicaid work requirements under President Donald Trump’s One Big Beautiful Bill Act, and the consequences for federally funded community health clinics could be severe. For clinics like Lincoln’s Bluestem Health, which serve low-income and uninsured patients who have few other healthcare options, the financial strain threatens to reduce services and staff at a time when patient need is rising.
The legislation, signed into law on July 4, 2025, reshapes the Medicaid landscape across the country — and Nebraska’s early adoption of its provisions makes the state a leading indicator of how the law will ripple through the broader community health system.
What Happened
Bluestem Health, a community health clinic in Lincoln, Nebraska, has operated at a loss for each of the past two years. CEO Brad Meyer says the situation is expected to worsen significantly as the state moves to enforce new Medicaid work requirements ahead of the federal deadline.
Nebraska will begin imposing work requirements on eligible adult Medicaid enrollees on May 1 — seven months before the law mandates it. Under the One Big Beautiful Bill Act, nondisabled Medicaid enrollees must work, volunteer, or perform another approved activity for at least 80 hours per month to maintain coverage.
Meyer estimates that up to 15% of Bluestem’s 21,000 patients could lose Medicaid coverage as a result, costing the clinic approximately $600,000 per year. That potential shortfall could force cuts to services or staff at a clinic that many vulnerable residents depend on for primary and preventive care.
By the Numbers
17,000 — The number of federally funded community health centers operating nationwide, collectively serving approximately 1 in 7 Americans.
$32 billion — The projected collective revenue loss for community health centers over the next five years, according to the Commonwealth Fund, a health research organization.
5.6 million — The estimated number of health center patients nationwide expected to lose Medicaid coverage over the next decade as states implement work requirements.
50% — The approximate share of community health center patients, out of roughly 33 million total in 2024, who were covered by Medicaid — making it the single largest revenue source for these clinics.
$600,000 — The estimated annual revenue loss for Bluestem Health alone if up to 15% of its Medicaid-enrolled patients lose coverage under Nebraska’s early implementation timeline.
Zoom Out
Community health centers were established to provide care to populations that would otherwise go without it — including the uninsured, low-income families, and rural residents with limited access to private practices. Their financial model depends heavily on Medicaid reimbursements, which supplement federal grants and allow them to offer sliding-scale fees to patients who cannot afford traditional healthcare costs.
The Commonwealth Fund projects that most patients who lose Medicaid will do so not because they fail to meet the work requirement itself, but because of administrative and paperwork errors — such as failing to document their hours or verify an exemption. This pattern was observed during Arkansas’s brief implementation of Medicaid work requirements in 2018, where tens of thousands of enrollees were disenrolled before federal courts blocked the program.
Nationally, health centers have already been navigating tighter financial conditions following the end of pandemic-era funding expansions. The additional pressure from Medicaid enrollment losses stands to accelerate those challenges, particularly in states like Nebraska that are moving quickly to enforce the new rules.
What’s Next
Nebraska’s May 1 implementation date will make the state one of the earliest real-world tests of how Medicaid work requirements affect community health center operations under the One Big Beautiful Bill Act. Clinic administrators across the state are expected to monitor enrollment changes closely in the months that follow.
Health center advocates are likely to track patient disenrollment data and any corresponding drops in clinic revenue to build a policy record ahead of broader national implementation. Legal challenges to Medicaid work requirements, similar to those that blocked Arkansas’s program in 2019, remain a possibility as enforcement begins in more states.
For Bluestem Health and clinics like it, the immediate priority will be determining how to sustain operations and staffing levels if projected revenue losses materialize — decisions that will directly affect access to care for tens of thousands of Nebraska residents.