People who are blind, disabled, seriously ill or have a substance use disorder can keep their Medicaid coverage and are exempt from newly established work or volunteering requirements, a federal judge ruled Thursday. The court found the Trump administration erred by arguing that it had the discretion to require some of them to do so.
U.S. District Judge Richard Stearns in Boston gave a partial victory to a coalition of Oregon, California and 23 other states and the District of Columbia, which sued the Trump administration in June over the new Centers for Medicare and Medicaid Services guidance implementing the 2025 law known as the “One Big Beautiful Bill.”
Oregon was one of the states that sued the Trump administration over this guidance. About 1 in 3 Oregonians is on Medicaid, known in the state as the Oregon Health Plan.
“This ruling means Oregonians fighting cancer or living with a disability can keep their focus on their health, not whether they’re going to lose the coverage that’s keeping them alive,” said Oregon Attorney General Dan Rayfield in a statement.
The states had been working closely with the administration to implement the law and understood that certain groups would be exempt based on their medical diagnosis or health condition. According to their civil suit, they were caught off guard when the administration released guidance in June that didn’t categorically exempt medically frail people from the 80-hour-a-month requirement.
The law passed by Congress says the definition of medically frail must include people who are blind or disabled, have substance use disorders or disabling mental disorders, have certain disabilities that significantly impair daily activities, or have serious or complex medical conditions. The CMS rule released in June went further, requiring people in those categories to show that their conditions also “significantly impair” their ability to comply with the law’s work requirements.
The plaintiffs argued that the stricter rule would prevent eligible Americans from accessing the care they need — and that it oversteps the text of the law itself.
“The states have met their burden of showing irreparable harm for which monetary damages would provide inadequate compensation — they face the burden of costly and intensive alterations to their eligibility verification systems,” Stearns said in his 16-page ruling.
Notably, while the ruling will make it easier for some Medicaid recipients with qualifying medical conditions to obtain an exemption from the new work requirements, Stearns’ decision does not strike down the work requirements as unlawful.
Additionally, Stearns upheld two other federal restrictions on how states can verify medical frailty: including the requirement that states reject proof of patients’ 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.
Explaining why he upheld the portions in favor of the government, Stearns said “the government provided a non-frivolous rationale for adopting each provision and explained why it did not find the States’ concerns of disenrollment compelling.”
Representatives from the Department of Health and Human Services and CMS did not immediately respond to an Associated Press request for comment.
The new Medicaid restrictions are part of Trump’s big tax and policy law in 2025. The change affects those covered through an expansion in most states that gave more lower-income people access to the government’s safety net healthcare program.
Starting next year, expansion enrollees aged 19 to 64 must show that they work or do community service at least 80 hours a month, or are in school at least half the time. There are exceptions for those considered medically frail or in addiction treatment programs, among others.
The work requirement does not apply to people who qualify for the Oregon Health Plan based on pregnancy or disability.
