A coalition of 25 states and the District of Columbia has filed a lawsuit against the Trump administration, challenging a new rule that imposes work requirements on Medicaid enrollees. The states contend that the policy, designed to prevent fraud, unlawfully restricts access to healthcare coverage and violates federal law, departing from Congress's original intent.
The lawsuit names Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services (CMS), and Robert F. Kennedy Jr., secretary of Health and Human Services (HHS), as defendants. The interim final rule (IFR), issued by CMS in early June, requires certain individuals to provide documentation proving they are exempt from work, volunteer, or school attendance requirements for Medicaid.
Previously, highly vulnerable Medicaid recipients were automatically exempt from such requirements, with exemptions granted based on existing health records without additional paperwork. The new rule mandates that able-bodied individuals must work 20 hours a week, volunteer, or pursue education while receiving free healthcare coverage.
According to the lawsuit, CMS's own projections estimate that 2.3 million enrollees could lose Medicaid coverage in the first year alone. The agency also anticipates that approximately 7% of working enrollees or those qualifying for an exemption might lose coverage due to documentation issues or strict deadlines.
Under the revised policy, beginning in 2028, enrollees without immediate medical records on file will have a single opportunity to submit a self-attestation form declaring they are too sick to work. This contrasts with previous guidance, which allowed multiple self-attestations as medical needs evolved.
The plaintiffs, including California, New York, Virginia, and others, argue that the new rules will compel states to abandon established automated systems in favor of more complex and costly manual review processes. They are seeking an emergency court order, including a temporary stay and preliminary injunction, to block the enforcement of the rules, with a deadline of August 31 to mail notices to Medicaid enrollees approaching.
Dr. Mehmet Oz has previously stated that such measures are intended to prevent programs from being defrauded and that able-bodied enrollees should contribute to society if they are able to work. "If we put guardrails around these programs, we'll allow them to thrive," Oz said. "We cannot allow these programs to be defrauded into a turmoil that they cannot pull up from. If we love these programs, we will make the difficult decisions."