The attorneys general of Oregon, Minnesota, New Mexico and Washington are suing HHS and CMS, arguing the federal government cannot pull existing Medicaid funding from states that don’t adopt the Medicaid work requirement in HR 1.
The lawsuit, filed Nov. 5 in an Oregon federal court, cites the Supreme Court’s 2012 decision in National Federation of Independent Business v. Sebelius and argues the work requirement creates a new program. The states said Congress cannot force that program on states by threatening the Medicaid dollars they already receive.
The requirement applies to adults in the ACA expansion population. They must log 80 hours a month of work, community service, a work program or half-time education, or meet an equivalent income level. HR 1 also requires redeterminations every six months for these enrollees and bars states from waiving the rule through Section 1115.
According to the lawsuit, 564,177 Oregonians are in the expansion group, roughly 16% of the state’s adults. That group accounts for about $5.1 billion, or 54%, of Oregon’s federal Medicaid funding this fiscal year. The complaint cites a study estimating that Oregon will have to disenroll about 20% of its Medicaid enrollees, with large-scale disenrollment starting in early 2027.
Oregon Attorney General Dan Rayfield said in a Nov. 5 news release that “it would be the height of bureaucratic cruelty to rip away someone’s life-saving health care just because of unreasonable paperwork.”
The states seek a declaration that withholding Medicaid funds for noncompliance is unconstitutional. They also seek preliminary and permanent injunctions to block any such withholding.
Forty states and Washington, D.C., have expanded Medicaid. The expansion covers about 19.2 million of the roughly 66 million people enrolled in Medicaid nationally, according to the lawsuit.
A CMS spokesperson said the agency does not comment on pending litigation. HHS did not immediately respond to a request for comment.
