Judge Throws Out Trump Medicaid Rule That Made Sick Patients Prove They Can't Work. The Work Requirement Stays.

Medicaid's new work requirement is still due to start Jan. 1, the deadline Congress set. But a federal judge in Boston ruled Thursday that the Trump administration drew one of its biggest exemptions too narrowly.

The 2025 tax-and-spending law, H.R. 1, which its sponsor called the "One Big Beautiful Bill," requires many adults covered through Medicaid expansion to work, volunteer or attend school at least 80 hours a month to keep their coverage. The law exempts anyone "who is medically frail or otherwise has special medical needs (as defined by the Secretary)." It says that group includes people who are blind or disabled, people with a substance use disorder, people with a disabling mental disorder, people with a disability that significantly impairs one or more activities of daily living, and people with "a serious or complex medical condition."

When the Centers for Medicare & Medicaid Services (CMS) wrote the rules in June, it added a test. A person in one of those five groups would count as medically frail only if their condition "significantly impairs the individual's ability to comply with the community engagement requirement," the 80 hours. Twenty-five states and the District of Columbia sued. Kentucky and Pennsylvania joined through their governors.

In a 16-page opinion on cross-motions for summary judgment, U.S. District Judge Richard Stearns sided with the states on that point. According to the opinion, the five groups Congress listed are a "definitional floor," and CMS "lacked authority to exclude any subset of individuals in the five subcategories." Stearns called the added test "beyond the powers of CMS (ultra vires) and thus contrary to law."

What the court ordered. In a separate two-page order, Stearns:

• declared the "significantly impairs ... ability to comply" language unlawful and vacated it, meaning he struck it from the rule;
• permanently barred the federal government from "implementing, enforcing, retroactively enforcing, or otherwise applying" that language "to Plaintiff States";
• barred CMS from penalizing the plaintiff states "for any errors or delays in implementing" the rule for six months, so they have time to rebuild their eligibility systems.

That injunction covers the states that sued. It is not a nationwide injunction. Vacating the language is a broader remedy, but the order doesn't spell out how CMS must handle the roughly 18 other states that CMS says also have to run the work requirement. CMS hasn't said either. The court then entered judgment and closed the case. No appeal appeared on the docket as of Thursday afternoon.

What the states lost. Stearns upheld the two other provisions they challenged:

• A 12-month look-back. States may use only claims and encounter data from the previous 12 months to verify that someone is medically frail.
• A limit on self-attestation. A person may self-certify medical frailty only once per continuous period of enrollment.

The judge found the states' objections to both "unconvincing and falling well short of the arbitrary or capricious standard." He wrote that CMS "provided a non-frivolous rationale for adopting each provision." He did not reach the states' Spending Clause claim. The ruling also doesn't touch the rule's optional short-term hardship exceptions, which weren't part of the case.

The ruling also leaves the start date alone. "The States made clear ... that they do not seek to extend the Congressionally mandated January 1, 2027, implementation date," Stearns wrote, "a form of relief that the court in any event would be powerless to grant." This was the states' second attempt. In July, Stearns denied their request for a preliminary injunction, finding they hadn't yet shown irreparable harm. He put the case on a fast track to a final ruling before January instead.

We first covered the work requirement in our explainer on the welfare cliff.