A coalition of 25 states and the District of Columbia has sued the Trump administration over a new Medicaid work requirement rule that could affect millions of low-income adults before it takes effect in January 2027.
States Move to Block Medicaid Rule
The lawsuit challenges an interim final rule issued by CMS in early June. The rule sets new requirements for certain Medicaid recipients to keep coverage. Under the policy, many adults must show they are working, volunteering, attending school, or participating in another approved activity. The states argue the rule creates unlawful barriers for people with serious medical conditions.
CMS Rule Requires Monthly Activity
The rule applies to many Medicaid adults aged 19 to 64. CMS says that affected recipients must complete 80 hours of qualifying activity per month.
Medical Exemptions Drive Legal Fight
The main dispute centers on people considered medically frail. The states argue CMS changed the exemption process in a way that could hurt vulnerable patients. Before the rule, states were expected to identify many exempt recipients through existing health records. The lawsuit says the new policy requires some people to provide extra documentation before they can keep coverage.
Coverage Losses Could Be Significant
CMS estimated the policy could lead to 2.3 million fewer enrollees in the first year. The agency also estimated that some people who are working or qualify for exemptions could still lose coverage. Missed paperwork, strict deadlines, or incomplete documentation could trigger those losses.
States Say Systems Face Pressure
The plaintiffs say the rule would force Medicaid agencies to change systems already built around automated reviews. Those systems often use existing health, income, and eligibility data. The lawsuit argues the new rule could require more manual reviews, more notices, and more staff time.
Trump Officials Defend Work Requirements
Oz has defended the policy as a safeguard against fraud and improper use of federal benefits. He has said able-bodied people who receive taxpayer-funded coverage should contribute through work or other approved activity.
Coalition Includes Major Medicaid States
Other states in the coalition include Arizona, Colorado, Connecticut, Delaware, Hawaii, Maine, Maryland, Minnesota, Nevada, New Mexico, North Carolina, Rhode Island, Vermont, Wisconsin, and Kentucky. The District of Columbia also joined the case.
Court Fight Comes Before Deadline
The case could shape how Medicaid work requirements are enforced nationwide. It also tests how far CMS can go in defining exemptions for medically vulnerable recipients.
If the administration wins, states will have to move forward with notices, verification systems, and enforcement plans. Medicaid recipients covered by the rule would then need to prove compliance or show they qualify for an exemption.
The latest status is that the rule remains scheduled for January 2027. The states are seeking emergency court relief before enforcement begins.
