Coalition of 25 States Challenges Trump Administration's Medicaid Work Rule

A coalition comprising 25 states and the District of Columbia has initiated legal action against the Trump administration concerning new Medicaid work requirements. The plaintiffs argue that these mandates, ostensibly designed to prevent fraud, unlawfully impede access to essential health care coverage for many.

The lawsuit, submitted by a diverse group of states, asserts that the Interim Final Rule (IFR) — recently put forth by the Centers for Medicare & Medicaid Services (CMS) — contravenes federal statutes. It further contends that the rule deviates significantly from the original legislative intent of Congress and previous guidance issued by CMS.

The IFR stipulates that certain individuals must now submit documentation to prove their eligibility for exemptions from Medicaid rules. These rules typically require enrollees to engage in work, volunteer activities, or educational pursuits. Exemptions are granted for severe medical conditions.

Prior to the rule's implementation in early June, highly vulnerable Medicaid beneficiaries were slated for automatic exemption from such requirements. Under the former framework, agencies would have processed these exemptions through a review of existing health records, eliminating the need for individuals to complete additional paperwork before the requirements were to take effect in January 2027.

Administration's Justification and Defendants

The lawsuit names Dr. Mehmet Oz, the administrator for CMS, which promulgated the IFR, and Robert F. Kennedy Jr., the Secretary of Health and Human Services (HHS), as defendants.

Dr. Oz has previously defended such protective measures, asserting they are crucial to prevent programs from being "defrauded into a turmoil." He emphasized that able-bodied individuals who receive taxpayer funds should contribute to society.

"If you can work, you should get up and work," Oz stated. "If we put guardrails around these programs, we'll allow them to thrive. I'm here because I love Medicaid. The president has already said he loves and cherishes Medicaid and Medicare. … 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."

The new regulation mandates that able-bodied individuals enrolled in free healthcare coverage must either work 20 hours per week, engage in volunteering, or pursue educational opportunities.

Widespread Concerns and Projected Impact

The states involved in the litigation include California, Connecticut, Delaware, the District of Columbia, 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, and Kentucky.

The legal complaint highlights a key concern: "People with disabilities, patients in the middle of cancer treatment, or those struggling with another serious or complex health condition, shouldn’t be at risk of losing the care that helps maintain their health."

According to projections cited in the lawsuit, CMS itself estimates that approximately 2.3 million enrollees could lose Medicaid coverage within the initial year alone. Furthermore, the agency anticipates that 7% of enrollees who are actively working or otherwise qualify for an exemption will still lose their coverage. This loss is attributed to confusing paperwork requirements, stringent deadlines, or missing documentation, as detailed in the court document.

Beginning in 2028, enrollees without immediate medical records on file would be granted only one opportunity to submit a "self-attestation" form. This form, submitted under penalty of perjury, would declare their inability to work due to illness. This contrasts with prior guidance, which permitted enrollees to utilize self-attestation multiple times as their medical needs changed.

Additionally, the plaintiffs contend that these new rules would compel states to dismantle existing automated systems they have invested in, forcing them to establish more intricate and costly manual review processes instead.

With the Aug. 31 deadline fast approaching for mailing notices to Medicaid enrollees, the plaintiffs are urgently seeking a temporary stay and a preliminary injunction. Their aim is to prevent CMS and HHS from enforcing these contested rules.