Federal Judge Blocks New Medicaid Work Rule for Sick Beneficiaries

US District Judge Richard Stearns blocked a new federal rule on Thursday that would have required chronically ill Medicaid recipients to prove they are 'medically frail' to qualify for work exemptions. The ruling prevents the Trump administration from enforcing stricter eligibility standards for patients with serious medical conditions.

Twenty-five states and the District of Columbia sued the administration in June over the change. They argued the rule unlawfully limited exemptions for people with serious medical conditions. The law requires the definition of medical frailty to include individuals who are blind or disabled, have substance use disorders, or have disabling mental disorders.

The administration’s rule added a new layer of scrutiny. It required people in those categories to show their conditions also 'significantly impair' their ability to comply with work requirements. The plaintiffs contended this stricter standard would prevent eligible Americans from accessing necessary care. They said the rule oversteps the text of the existing law.

Stearns wrote a 16-page opinion finding that the states faced irreparable harm. He noted that the states must undergo costly and intensive alterations to their eligibility verification systems if the rule is enforced. Monetary damages would not adequately compensate for these systemic changes. The Centers for Medicare and Medicaid Services, the agency that adopted the rule, declined to comment on the decision.

Medicaid is a public health insurance program for low-income people funded by state and federal governments. Starting January 1, 2027, expansion enrollees aged 19 to 64 must work or do community service at least 80 hours a month. Alternatively, they must be in school at least half the time. Exceptions exist for those considered medically frail or in addiction treatment programs.

The ruling makes it easier for some recipients to obtain exemptions from these new work requirements. However, Stearns did not strike down the work requirements as unlawful. His decision upheld two other federal restrictions on how states verify medical frailty. The states and the District of Columbia had also contested these restrictions in their lawsuit.

Stearns serves in the District of Massachusetts. President Bill Clinton appointed him to the bench. The ruling halts the enforcement of the specific 'significant impairment' language that the administration had added to the existing legal framework.