Twenty-five states and the District of Columbia have filed a lawsuit against the Trump administration, challenging its strict interpretation of new Medicaid work requirements. The lawsuit, filed by Democratic attorneys general and governors, contends that the interim final rule issued by the Centers for Medicare and Medicaid Services (CMS) oversteps the existing law and will prevent eligible Americans from accessing necessary healthcare.
Plaintiffs argue that the administration's narrow reading of the statute, particularly concerning new limits to medical frailty exemptions, will erect harmful coverage barriers and cause disruption for states rushing to implement these changes before the January deadline. They claim that added administrative burdens will lead to eligible individuals losing or being denied coverage. The lawsuit states that people with disabilities, those undergoing cancer treatment, or individuals with serious health conditions should not be at risk of losing essential care.
The new restrictions, part of a broader 2025 policy law, affect individuals enrolled in Medicaid through state expansions. Starting January 1, expansion enrollees aged 19 to 64 must demonstrate at least 80 hours of work or community service per month, or be enrolled in school at least half-time. Exceptions are available for those deemed medically frail or participating in addiction treatment programs.
A key point of contention is CMS's updated definition of medical frailty, introduced in a recent rule. While the law previously included individuals with substance use disorders, disabilities, or serious medical conditions, the CMS rule requires a condition to "significantly impair" a person's ability to meet the work or school requirements for an exemption. Health analysts and state Medicaid directors have expressed uncertainty about what documentation will suffice to prove such an impairment, especially when individuals seek to renew their coverage in 2028 after initially attesting to their condition.
The lawsuit asserts that this change contradicts prior communications and preliminary guidance from CMS, upon which the plaintiff states based their implementation plans. According to the filing, states have not yet received sufficient clarity from CMS on how to properly update their systems.
New York Attorney General Letitia James, among the plaintiffs, stated that the new rule puts thousands of New Yorkers at risk. She added that individuals battling cancer, living with disabilities, managing serious mental health conditions, or recovering from addiction should be able to receive necessary healthcare without excessive administrative hurdles.