Federal officials have approved a temporary hardship exemption from Nebraska’s new Medicaid work requirements for Dawson County, the county that includes Lexington and the site of the closed Tyson Foods plant that eliminated about 3,000 jobs.
Who is covered and why it matters
Nebraska Department of Health and Human Services officials said the waiver applies automatically to people who have lived in Dawson County at any point since Feb. 1. That temporary exemption shields potential Medicaid enrollees in the county from the state’s newly implemented work, volunteer and education conditions while the hardship designation remains in effect.
The exemption follows a directive from Gov. Jim Pillen for DHHS to seek a county-level hardship waiver after the plant — which had operated in Lexington for 35 years and was the city’s largest employer — closed in January.
Why the county qualified
The 2025 federal law provides a hardship pathway when a county’s unemployment rate is above 8% or at least 1.5 times the national rate. Preliminary, non-seasonally adjusted data showed Dawson County had the highest monthly unemployment rate in Nebraska in April, at nearly 20%, while the national unemployment rate was 4.3% that month.
| Measure | Value |
|---|---|
| Dawson County unemployment (April, prelim.) | ~20% |
| National unemployment (April) | 4.3% |
| Hardship threshold | 8% or 1.5× national rate |
State implementation and local concerns
Nebraska became the first state to implement the expanded federal Medicaid work requirements on May 1. Under the program, certain work-eligible adults ages 19 to 64 face new conditions tied to employment, volunteering or education to retain coverage.
"substantial and sustained"
State DHHS has emphasized extensive outreach efforts and said that enrollees will have opportunities to demonstrate compliance before any coverage is terminated. Still, advocates for Medicaid recipients have warned the new rules could cause confusion, increase paperwork burdens and lead to inadvertent loss of coverage among vulnerable populations.
- Who’s temporarily exempt: People who have lived in Dawson County at any point since Feb. 1.
- Reason for exemption: Sharp spike in local unemployment tied to the Tyson plant closure.
- Duration: Temporary hardship exemption approved by Centers for Medicare & Medicaid Services; state and federal agencies will determine length and next steps.
The waiver offers immediate relief for residents still seeking work after the plant’s closure, ensuring they are not subject to the new reporting and activity requirements while the county remains designated as facing a hardship. DHHS officials said the agency will continue outreach to affected residents to explain next steps and any documentation needed to maintain coverage.
Local leaders and service providers in Lexington are expected to monitor how long the exemption lasts and what additional state or federal assistance might be available as the community continues to adjust to the economic disruption caused by the plant shutdown.
