Judge strikes CMS limit on 'medically frail' exemption from Medicaid work requirements

A federal judge in Boston on Thursday, Oct. 29, threw out part of the federal rule that decides who counts as “medically frail” and is therefore exempt from new Medicaid work requirements. U.S. District Judge Richard G. Stearns ruled that the Centers for Medicare & Medicaid Services went beyond its authority when it required people in the exempt categories Congress listed to also show that their condition “significantly impairs” their ability to meet the requirement.¹ The case is Commonwealth of Massachusetts v. Oz, No. 1:26-cv-12962. The plaintiffs are 23 states, the District of Columbia and the governors of Kentucky and Pennsylvania. Maryland is one of the plaintiff states.¹

What the order does

• It declares unlawful, vacates and sets aside the limiting language in the interim final rule “Community Engagement Requirement for Certain Individuals,” 91 Fed. Reg. 33348 (June 3, 2026).²³
• It bars HHS and CMS from implementing, enforcing or otherwise applying that provision to the plaintiff states.²
• For six months, it bars the agencies from penalizing the plaintiff states for errors or delays in implementing the rule.²
• Judgment went to the states on their contrary-to-law claim; the government won partial judgment on the arbitrary-and-capricious claim, and the case was dismissed.⁴

The vacatur paragraph names no states; both injunction paragraphs apply to the plaintiff states.²

The work requirement comes from the law President Donald Trump signed July 4, 2025, known as H.R. 1. Beginning Jan. 1, 2027, it requires people in the Medicaid expansion population to work or do community service 80 hours a month, or to be enrolled at least half time in an educational program. The law exempts people who are “medically frail” and says the term includes five listed groups, among them people who are blind or disabled and people with a serious or complex medical condition.¹

Stearns wrote that the word “including” in the statute sets “a definitional floor” that CMS could not narrow. He also wrote that enforcing the definition “may lead to the disenrollment of otherwise eligible vulnerable individuals.”¹

Stearns sided with the government on two other provisions the states challenged. One lets states use only claims and encounter data from the 12 months before an application when verifying frailty. The other allows a person to self-attest to frailty only once per enrollment period. He did not rule on the states' Spending Clause claim. He wrote that the Jan. 1, 2027, start date is unchanged and that the states did not ask to extend it. On July 29, he had denied the states' request for a preliminary injunction, without prejudice.¹⁵

What each side says

When the states sued June 29, Massachusetts Attorney General Andrea Joy Campbell said “Congress made clear that people with serious medical conditions should not lose coverage.”⁶⁷ After the ruling, North Carolina Attorney General Jeff Jackson said, “Congress specifically protected these patients, and CMS broke the law by trying to take that protection away.” His office estimated that 64,000 North Carolinians are affected.⁸

Government lawyers argued in a Sept. 18 brief that Congress gave CMS the authority to define who is medically frail. They wrote that without a functional test, people with a nicotine-related substance use disorder or well-controlled asthma or diabetes would be fully exempt. Alternatively, they asked that the rule go back to the agency without vacatur, writing that vacatur would “upend that development process minutes to midnight.”⁹ Politico reported that CMS declined to comment on the decision or on whether it would appeal.¹⁰

What the records do not show

• As of Thursday evening, no notice of appeal appeared on CourtListener's copy of the docket, and CMS had made no public statement on the ruling.
• The court records do not say how many people nationwide fall within the restored exemption. North Carolina's release does not explain how it reached its 64,000 estimate.⁸