A federal district court in Massachusetts ruled Thursday, Jan. 29, that the part of the federal Medicaid work requirement implementation rule that narrows the exemption for the "medically frail" is unlawful. The lawsuit was co-led by the New Jersey Attorney General's Office and joined by New York and other states. The court vacated the language in question and issued a permanent injunction.
The U.S. District Court for the District of Massachusetts ruled Thursday, Jan. 29, that the "medically frail" exemption portion of the Medicaid work requirement rule implemented by the federal Centers for Medicare & Medicaid Services (CMS) violates the law, the New Jersey Attorney General's Office announced the same day. The court vacated the language in question and issued a permanent injunction, and it granted the plaintiff states a six-month stay of enforcement.
The lawsuit was filed in June. It was led by New Jersey Attorney General Jennifer Davenport together with California Attorney General Rob Bonta and Massachusetts Attorney General Andrea Joy Campbell. At issue was whether CMS could narrow, through the interim final rule it issued this year, the scope of the exemption for the medically frail under the Medicaid work requirements created by the One Big Beautiful Bill Act (OBBBA). The court found that CMS has no authority to require states to separately assess, in addition to the exemption categories, whether a condition significantly impairs a person's ability to work.
According to the Attorney General's Office, the medically frail exemption is meant to ensure that people with serious or complex medical conditions, mental illness or substance use disorders do not lose coverage or have their treatment interrupted. The office said that if the rule had been implemented as written, thousands of New Jersey residents could have lost coverage because of paperwork requirements even though they were eligible. It explained that in past work requirement cases, increased administrative procedures also led eligible people to lose coverage, and the burden fell on state Medicaid programs, safety-net providers and emergency rooms.
The New York State Attorney General is also among the states that joined the suit. Attorney General Davenport said the ruling "will help people with complex or serious medical conditions keep their Medicaid and protect their access to health care."