A coalition of 25 states and the District of Columbia filed a lawsuit challenging the Trump administration’s new Medicaid work requirement rule, arguing that it unlawfully makes it harder for vulnerable Americans to maintain their health insurance.
The lawsuit targets an Interim Final Rule (IFR) issued by the Centers for Medicare and Medicaid Services (CMS) that changes the way certain Medicaid recipients qualify for waivers from the new work requirements. State attorneys general argue that the rule creates unnecessary paperwork, deviates from longstanding federal policy and could cause millions of eligible people to lose coverage despite qualifying for exemptions.
The lawsuit was filed by 25 states and the District of Columbia against the Trump administration over changes to Medicaid eligibility requirements.
As the defendant in the complaint, CMS Administrator Dr. Mehmet Öz and Secretary of Health and Human Services Robert F. Kennedy Jr. It is located. Plaintiffs claim that by issuing the Interim Final Rule, the agency exceeded its statutory authority and deviated from Congress’ original intent for the Medicaid program.
The states are asking the court to temporarily block enforcement of the rule while the lawsuit continues.
What the new Medicaid work rule requires
Under the new CMS rule, some healthy Medicaid recipients must work, volunteer or attend school at least 20 hours a week to qualify for the state health insurance program.
The rule also changes the way people with serious health conditions qualify for exemptions. Rather than allowing states to automatically identify many individuals as medically exempt using existing health records, some beneficiaries will now be required to provide documentation proving they qualify for the exemption.
Work requirements are scheduled to take effect from January 2027.
States argue the rule creates new barriers for vulnerable patients. The biggest concern, according to the lawsuit, is not the work requirement itself but the documentation process for medically vulnerable recipients.
Before CMS issued this rule in early June, government agencies could automatically exempt many people with serious health conditions by reviewing existing medical records without requiring beneficiaries to fill out additional paperwork.
The lawsuit argues that eliminating these automatic deductibles puts people with serious health conditions at risk of losing coverage because they cannot meet complex administrative requirements.
Lawsuit warns disabled people could lose insurance coverage
Plaintiffs argue the new documentation rules could impact some of Medicaid’s most medically vulnerable beneficiaries.
“People with disabilities, patients in the midst of cancer treatment, or those dealing with another serious or complex health condition should not be at risk of losing care that helps protect their health,” the lawsuit said.
State officials argue that the new requirements make it more likely that those who qualify will lose benefits because of paperwork problems, not because they don’t qualify.
The lawsuit cites CMS’s own projections that claim the new rule could significantly reduce Medicaid enrollment.
According to the filing, CMS projects that approximately 2.3 million Medicaid enrollees will lose coverage during the first year the rule is in effect.
The agency also estimates that about 7 percent of people who work or otherwise qualify for exemptions may lose health insurance due to confusing paperwork requirements, missed deadlines or missing documentation.
The plaintiffs argue that these figures demonstrate the administrative burden created by the new policy.
Self-certification rules will become more restrictive
The case also challenges new limits on self-certification for people who cannot immediately provide medical documentation.
Beginning in 2028, enrollees without readily available medical records will be limited to a single opportunity to submit a self-affidavit declaring they are medically incapable of work, under penalty of perjury.
Under previous CMS guidance, beneficiaries could submit self-reports multiple times as their medical conditions changed.
The states argue that the revised policy reduces flexibility for people with emerging or chronic medical conditions.
States say the rule would increase administrative costs. Beyond concerns about Medicaid recipients, the lawsuit argues that the rule would create significant new costs for state governments.
According to the complaint, many states have already invested in automated systems designed to identify medical exemption beneficiaries using existing health data.
Plaintiffs say the new federal requirements will force them to abandon those systems and instead create more labor-intensive manual review processes, slowing eligibility determinations while increasing administrative costs.
Trump administration says guardrails protect Medicaid
CMS Director Dr. Mehmet Oz argued that work requirements are necessary protections designed to preserve Medicaid for those who truly need it.
Oz argued that the requirements help prevent fraud and encourage healthy adults who receive taxpayer-funded health care to contribute through work, education or volunteer service.
Öz said, “If you can work, you should get up and work.”
He also defended the broader policy, saying: “If we put guardrails around these programs, we will allow them to thrive. I’m here because I love Medicaid. The president has already said he loves and values Medicaid and Medicare. … We can’t let these programs get dragged into a mess they can’t get out of. If we love these programs, we’ll make the tough decisions.”
Democrat-led states join lawsuit against Medicaid rule
Plaintiffs include 25 Democratic-led states and the District of Columbia: California, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, Arizona, Colorado, Michigan, Minnesota, Nevada, New Mexico, North Carolina, Pennsylvania, Virginia, Wisconsin, Kentucky and the District of Columbia.
Together, they argue that the rule conflicts with federal Medicaid law and creates obstacles that Congress never intended when it created the program.
The legal challenge comes as states prepare to notify Medicaid recipients of upcoming work requirements.
As the Aug. 31 deadline for mailing notices to beneficiaries approaches, plaintiffs are asking the court for a temporary reprieve and an injunction that would prevent CMS and HHS from enforcing the new rule while the case is pending.
If the court grants the request, implementation of key parts of the rule could be delayed while judges decide whether the administration is acting within its legal authority.
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John Dealbreuin came to the United States from a third world country without knowing anyone and with only $1,000; Guided by an immigrant dream. He reached his retirement number in 12 years.
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