A federal judge has ruled that chronically ill Medicaid recipients are not required to meet new work requirements in order to qualify for exemptions under updated federal guidelines. The decision, issued Thursday by U.S. District Judge Richard Stearns in Boston, partially blocks the Trump administration’s recent interpretation of the Centers for Medicare and Medicaid Services (CMS) rules tied to a 2025 law known as the “One Big Beautiful Bill.”
The ruling came in response to a lawsuit filed by a coalition of 25 states and the District of Columbia in June, challenging CMS’s stricter standards for defining who is “medically frail” and thus exempt from Medicaid’s new work mandates. The law specifies that individuals who are blind or disabled, have substance use disorders or disabling mental health conditions, or suffer from serious and complex medical issues should automatically qualify for these exemptions. However, CMS’s guidance added a requirement that these conditions must also “significantly impair” the recipient’s ability to comply with the work-related criteria.
Plaintiffs argued that this heightened threshold deviated from the statute’s intent and would deny necessary coverage to eligible individuals. Stearns sided with the states, stating that they had demonstrated the potential for irreparable harm due to the costly modifications required to their eligibility systems and the risk of inappropriately removing coverage for vulnerable populations.
Though the ruling eases access to exemptions for some Medicaid participants, it does not invalidate the work requirements themselves. Beginning January 1, 2025, most adults aged 19 to 64 enrolled in Medicaid through state expansions must demonstrate at least 80 hours per month of work or community engagement, or be enrolled in school at least half-time, to maintain coverage. Certain exemptions apply, including for those classified as medically frail under the law.
Experts suggest the court decision will help preserve Medicaid coverage for individuals whose health issues might have previously disqualified them from exemptions based on the stricter CMS interpretation. Morgan Henderson, an economist at The Hilltop Institute at the University of Maryland, Baltimore County, noted this ruling could prevent some from losing coverage due to not meeting the enhanced impairment criteria.
CMS declined to comment on the ruling. The updated work requirements and exemption criteria reflect a significant shift in Medicaid policy under the current administration, affecting millions of lower-income Americans who gained coverage through the program’s expansion in numerous states.