Judge blocks CMS rule requiring proof of severe impairment for Medicaid work exemption

A federal judge in Boston issued a partial ruling on Thursday that blocks a new rule requiring chronically ill Medicaid recipients to prove their conditions severely limit their ability to meet work requirements. The decision favors a coalition of 25 states and the District of Columbia that challenged the guidance issued by the Centers for Medicare and Medicaid Services. The lawsuit was filed in June against the Trump administration over regulations tied to the 2025 legislation known as the One Big Beautiful Bill.

The 2025 law defines medically frail individuals to include those who are blind or disabled, have substance use or mental disorders, or possess conditions that significantly impair daily activities. However, the CMS rule added a stricter layer by requiring these individuals to demonstrate that their conditions also significantly impair their ability to comply with the new work mandates. The plaintiff states argued this additional hurdle would prevent eligible Americans from accessing necessary care and went beyond the statutory language.

U.S. District Judge Richard Stearns wrote in his 16-page opinion that the states demonstrated irreparable harm that monetary damages could not fix. He noted that the states faced the burden of making costly and intensive changes to their eligibility verification systems. The ruling allows some recipients to obtain exemptions from work requirements more easily, but it does not strike down the work requirements themselves as unlawful.

Morgan Henderson, an economist who studies Medicaid at The Hilltop Institute at the University of Maryland, Baltimore County, said the decision likely preserves coverage for people who are sick but do not meet the strictest definition of frailty. He stated that individuals who might have lost coverage under the previous rule could now keep it.

Dev Sangvai, the North Carolina Health and Human Services Secretary, said the ruling helps patients avoid stressful administrative situations. In a statement, he said the decision allows the state to focus on delivering reliable health care to vulnerable residents. He emphasized the goal of ensuring people receive critical care without facing confusing paperwork or the fear of losing coverage during treatment.

The judge upheld two other federal restrictions on how states verify medical frailty. These include a requirement for states to reject proof of medical frailty if the diagnosis is more than a year old. He also upheld a policy allowing states to accept only one self-attestation per continuous period of enrollment. Stearns explained that the government provided a non-frivolous rationale for adopting each provision and did not find the states' concerns of disenrollment compelling.

The new Medicaid restrictions are part of the Trump administration's 2025 tax and policy law. The changes affect individuals covered through the Medicaid expansion, which in most states provides government safety net healthcare to more lower-income people. CMS declined to comment on the ruling.

Starting January 1, expansion enrollees aged 19 to 64 must show they work or perform community service for at least 80 hours a month. They must also be in school at least half the time to maintain coverage. Exceptions exist for those considered medically frail or enrolled in addiction treatment programs.

The ruling applies to the specific guidance challenged by the coalition. The administration and the states continue to manage the implementation of the 2025 law's provisions. The decision impacts how state agencies process eligibility for the work requirement exemptions.