Medicaid work rules: Judge eases proof of illness for millions

Federal Judge Richard Stearns in Boston blocked a new rule that required Medicaid recipients with chronic illnesses to prove their conditions prevent them from working. The decision halts a Centers for Medicare and Medicaid Services regulation that demanded individuals show their medical issues significantly impair their ability to meet work requirements.

The ruling came on Thursday after a coalition of 25 states and the District of Columbia filed a lawsuit in June. The states challenged guidance issued under the 2025 law known as the One Big Beautiful Bill. The legislation defines medically frail people as those who are blind or disabled, have substance use disorders, have disabling mental disorders, or have serious medical conditions. The CMS rule added a layer by requiring proof that these conditions specifically interfere with work capacity.

Stearns issued a 16-page decision that partially favored the states. He wrote that the states showed irreparable harm because they faced the burden of costly and intensive alterations to their eligibility verification systems. Monetary damages would not adequately compensate for these structural changes, according to the judge. The ruling does not strike down the work requirements themselves, only the specific method CMS used to verify medical frailty.

Morgan Henderson, an economist at The Hilltop Institute at the University of Maryland, Baltimore County, said the decision will help preserve coverage for individuals who are sick but do not meet the stricter impairment threshold. Henderson noted that these patients might have lost coverage under the previous rule. The change simplifies the process for obtaining exemptions from the new mandates.

Dev Sangvai, the North Carolina Health and Human Services Secretary, said the decision helps patients avoid confusing paperwork. In a statement, Sangvai said the ruling allows the state to focus on delivering reliable health care to vulnerable residents. He emphasized the importance of avoiding the fear of losing coverage during treatment.

Stearns upheld two other federal restrictions in his ruling. He kept the requirement that states reject proof of 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. Stearns explained that the government provided a non-frivolous rationale for adopting these provisions and explained why it did not find the states' concerns of disenrollment compelling.

The new Medicaid restrictions affect expansion enrollees in most states. Starting January 1, 2027, individuals aged 19 to 64 must show they work or do community service at least 80 hours a month, or are in school at least half the time. Exceptions exist for those considered medically frail or in addiction treatment programs. CMS declined to comment on the ruling.

The law is part of Trump’s 2025 tax and policy package. It changes how lower-income people access the government’s safety net healthcare program. The decision in Boston affects the implementation of these work mandates nationwide.