Judge strikes down CMS rule on Medicaid work requirements

A federal judge in Boston ruled Thursday that sick Medicaid recipients do not need to prove their conditions prevent them from working to qualify for an exemption.

U.S. District Judge Richard Stearns issued the partial victory for a coalition of 25 states and the District of Columbia. The group sued the Trump administration in June over new guidance from the Centers for Medicare and Medicaid Services.

The guidance stems from the 2025 law known as the One Big Beautiful Bill. That statute defines medically frail individuals as those who are blind, disabled, have substance use disorders, or suffer from serious medical conditions.

The CMS rule added an extra layer of scrutiny. It required people in those categories to demonstrate that their conditions significantly impair their ability to comply with the law's work requirements.

Stearns found that the stricter rule went beyond the text of the law. He determined that the administration's approach would cause irreparable harm to the state systems tasked with verifying eligibility.

The judge noted that states face the burden of costly and intensive alterations to their eligibility verification systems. He stated that monetary damages would not adequately compensate for those changes.

The ruling does not strike down the work requirements themselves. It merely removes the additional impairment test for those seeking a medical exemption. This change is expected to help some patients keep their coverage.

Morgan Henderson, an economist at the University of Maryland, Baltimore County, said the decision preserves coverage for individuals who are sick but not quite sick enough to meet the stricter federal standard.

Dev Sangvai, the North Carolina Health and Human Services Secretary, said the decision helps patients avoid confusing paperwork. He noted that the ruling allows the state to focus on delivering reliable health care to vulnerable residents.

Stearns upheld two other federal restrictions on how states verify medical frailty. The court kept the requirement that states reject proof of frailty if the diagnosis is more than a year old.

The judge also upheld a policy that allows states to accept only one self-attestation per continuous period of enrollment. He explained that the government provided a non-frivolous rationale for adopting each provision.

Stearns said the government explained why it did not find the states' concerns of disenrollment compelling. The CMS declined to comment on the ruling.