JULY 2, 2026
25 States and D.C. Sue Trump Administration Over Medicaid Work-Requirement Documentation Rule
A coalition of 25 states and the District of Columbia filed a lawsuit against the Trump administration challenging a new Interim Final Rule (IFR) issued by the Centers for Medicare & Medicaid Services that requires certain Medicaid enrollees to document exemptions from work, volunteering, or school requirements due to severe medical conditions. The lawsuit names CMS Administrator Dr. Mehmet Oz and HHS Secretary Robert F. Kennedy Jr. as defendants. Plaintiffs are seeking a temporary stay and a preliminary injunction ahead of an August 31 deadline for states to mail notices to enrollees.
The lawsuit, filed in advance of a work requirement framework set to take effect in January 2027, centers on a specific procedural change embedded in the IFR: before the rule was issued in early June 2026, individuals with severe medical conditions were set to receive automatic exemptions from Medicaid work requirements, with agencies reviewing existing health records on their behalf. The new rule instead requires those individuals to submit documentation proactively proving their exempt status.
According to the complaint, CMS's own projections estimate that 2.3 million enrollees will lose Medicaid coverage in the first year. The agency also estimates that 7% of enrollees who are working or otherwise qualify for an exemption will nonetheless lose coverage due to paperwork complexity, strict deadlines, or missing documentation, Fox News reported.
The plaintiffs — a group that includes California, New York, Illinois, Michigan, North Carolina, Pennsylvania, Virginia, Kentucky, and 17 other states and D.C. — argue the IFR violates federal law and departs from Congress's original intent and earlier CMS guidance. The suit states that people with disabilities, patients undergoing cancer treatment, and those with serious or complex medical conditions "shouldn't be at risk of losing the care that helps maintain their health." Plaintiffs also said the rule would force states to dismantle automated systems already built and replace them with more costly manual review processes.