Democratic governors and attorneys general from 25 states and Washington, D.C., sued the Trump administration June 29 over CMS’ interim final rule implementing Medicaid work requirements.
Eight things to know:
1. The 74-page lawsuit, filed in U.S. District Court for the District of Massachusetts, challenges CMS’ June 3 rule, which outlines how states must implement new community engagement requirements under HR 1. The plaintiffs argue the rule unlawfully narrows exemptions for medically frail Medicaid beneficiaries and creates administrative barriers that could cause eligible people to lose coverage.
2. Under HR 1, certain Medicaid expansion enrollees must work, attend school, volunteer or participate in other qualifying activities to maintain coverage. CMS has said the rule is designed to prioritize coverage for Medicaid’s most vulnerable populations and promote economic stability, self-sufficiency and independence.
“Able-bodied individuals on Medicaid spend an average of 6.1 hours watching TV or just hanging out [per day],” CMS Administrator Mehmet Oz, MD, said on a June 1 press call. “This is a concern, not criticism.”
3. The states argue CMS went beyond the law by requiring people with serious health conditions to prove their condition significantly impairs their ability to meet work requirements. The complaint says HR 1 does not require a person’s ability to work to be impaired to qualify as medically frail or to have a serious or complex medical condition.
“Added administrative burdens will cause individuals who are eligible for Medicaid to lose or be denied coverage,” the complaint states. “Defendants’ action will cause immediate and irreparable harms to plaintiff states’ operation of their state Medicaid programs.”
4. The states argue the rule will “disproportionately” affect older adults not yet eligible for Medicare and people with serious chronic conditions, place “further strain on safety net providers,” and increase uncompensated emergency care and “further strain” safety-net and rural hospitals — likely causing even more to shutter.
5. The lawsuit also challenges limits on self-attestation. Beginning in 2028, CMS’ rule allows states to accept a self-attestation for the medically frail exemption only once during a Medicaid enrollee’s continuous period of coverage, according to the complaint.
6. The states said they had already spent months modifying eligibility systems, preparing member notices, hiring staff and developing processes based on the statute and earlier CMS guidance. The complaint argues the interim rule departed from that guidance with only months left before states must begin sending notices Aug. 31 and implement the requirements Jan. 1, 2027.
7. The plaintiffs are asking the court to block the challenged provisions, declare them unlawful under the Administrative Procedure Act and the Constitution’s Spending Clause, and ultimately vacate them.
8. The plaintiffs include Massachusetts, California, New Jersey, Arizona, Colorado, Connecticut, Delaware, Washington, D.C., Hawaii, Illinois, Kentucky Gov. Andy Beshear, Maine, Maryland, Michigan, Minnesota, New Mexico, New York, Nevada, North Carolina, Oregon, Pennsylvania Gov. Josh Shapiro, Rhode Island, Vermont, Virginia, Washington and Wisconsin.
Becker’s has reached out to HHS for comment and will update this story as more information becomes available.
CMS said it does not comment on pending litigation.
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