Dawson County gets temporary waiver from Medicaid work rules following Tyson plant closure

LINCOLN — Federal officials have approved a temporary exemption from new Medicaid work requirements to Dawson County — home of the now-shuttered Tyson Foods plant that ended about 3,000 jobs.

Gov. Jim Pillen last month announced that he directed the Nebraska Department of Health and Human Services to seek the temporary hardship exemption for the county that includes Lexington, home to about 11,000 people where the meatpacking plant had operated 35 years and was the city’s largest employer.

The hardship provision, authorized under the 2025 law President Donald Trump calls big and beautiful, allows states to request the temporary exemption for counties where the unemployment rate exceeds 8% or is at least 1.5 times the national average, which was 4.3% in April.

Dawson had the highest monthly unemployment rate in Nebraska in April, at nearly 20% in preliminary, non seasonally adjusted data. The Lexington meatpacking plant, which earlier operated under a different name, closed in January.

People who have lived in Dawson at any point since Feb. 1 will be automatically and temporarily exempt from the new Medicaid work requirements, Nebraska DHHS officials said in a Friday statement announcing the temporary waiver approved by the Centers for Medicare & Medicaid Services.

On May 1 and at Pillen’s direction, Nebraska became the first state in the country to implement the new federally mandated work requirements. All states are to enforce the new and expanded Medicaid work requirements by Jan. 1, 2027. 

Advocates for Medicaid recipients have voiced concerns, saying that the new work, volunteer and education requirements for some Medicaid recipients will cause confusion, paperwork burdens and other problems that could lead to loss of public insurance coverage for the state’s vulnerable populations.

State DHHS officials have cited “substantial and sustained” outreach efforts. The agency said no one would lose coverage without an opportunity to show they meet new requirements.

Generally, the new federal requirements apply to work-eligible adults, ages 19 to 64, who are enrolled through the Medicaid expansion program. They must show they’re working or performing community service at least 80 hours a month or that they’re enrolled in school at least half-time. Exemptions exist for people with serious medical conditions or who are full-time caregivers.

DHHS estimates that up to 29,000 of the 72,000 Nebraskans enrolled in Medicaid expansion could be impacted by the new work requirements. That’s out of a total population receiving Medicaid benefits of 336,000 as of February, DHHS has said.

The temporary hardship provision is to exempt Dawson County until that county’s unemployment rate falls below the 8% or 1.5% national average.

Pillen, a Republican, has told state agencies to continue coordinating workforce assistance and community support resources to Tyson-impacted families.