Press Release  AG Campbell Sues Trump Administration Over Unlawful Medicaid Work Requirements Rule

Boston — Massachusetts Attorney General Andrea Joy Campbell today co-led a coalition of 26 states in filing a lawsuit challenging the Trump Administration's unlawful implementation of new Medicaid work requirements included in the One Big Beautiful Bill Act.  

The lawsuit challenges provisions of an interim final rule published by the U.S. Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) on June 3, 2026. Medicaid is the nation’s primary safety net healthcare program for low-income individuals and is jointly funded by states and the federal government, with the federal government providing at least 50% of the cost of services. 

Congress created exclusions from its newly created Medicaid work requirements to ensure that people with serious illnesses and disabilities do not lose coverage or face interruptions in care. Despite months of working with states on ways to honor Congress’s categorial exclusions, CMS issued the interim final rule which rejected Congress’s requirements – including the reinterpretation of a key statutory term, “medically frail.” CMS’s abrupt change, if allowed to stand, will make it significantly harder for vulnerable individuals to qualify for exclusions from the Medicaid work requirements and harder to maintain Medicaid coverage. 

Although the work requirement provision does not go into effect until January 1, 2027, Congress directed states to notify Medicaid recipients of these changes by August 31, 2026. CMS’s abrupt changes in its implementation of the statute leave states insufficient time to adjust their implementation plans or effectively communicate to members what is required to navigate the new requirements. 

As a result, the coalition is asking the court to block the unlawful provisions of the interim final rule and ultimately strike them down. States have already made substantial investments to implement the law based on earlier guidance from CMS and the plain language in the One Big Beautiful Bill Act. States now face the risk of harsh financial penalties if they fail to comply with the new rule.  

“The Trump Administration’s attempt to impose new, burdensome requirements on Medicaid recipients threatens access to healthcare for our most vulnerable residents and families,” said AG Campbell. “Congress made clear that people with serious medical conditions should not lose coverage. We are asking the court to block these unlawful provisions to protect Medicaid recipients and prevent needless strain on Massachusetts’ healthcare system.”  

The interim final rule also creates additional administrative burdens that increase the risk that eligible individuals – including those who are already working or who qualify for exemptions – will lose health coverage because of paperwork and reporting requirements. The rule disregards substantial evidence, fails to adequately evaluate reasonable alternatives, and does not give states clear or workable guidance. Past Medicaid work requirement programs have shown that these administrative hurdles cause eligible individuals to lose coverage, placing greater strain on state Medicaid programs, safety net providers, and emergency rooms, while increasing costs as more residents with complex medical needs become uninsured. 

States raised concerns with CMS about potential last-minute changes. For instance, on May 29, MassHealth, the state’s Medicaid agency, sent a letter to CMS leadership underscoring its concerns that sudden changes to CMS’s guidance could lead to significant increases in both disruptions and implementation costs in Massachusetts. MassHealth further cautioned CMS that altering certain reporting requirements risked blocking eligible Medicaid members from receiving and maintaining coverage.  

In today’s lawsuit, the coalition alleges that the interim final rule: 

• Unlawfully narrows Congress’s protections for medically frail Medicaid recipients. 
• Violates the Administrative Procedure Act by ignoring substantial evidence that work reporting requirements cause eligible individuals to lose healthcare coverage because of administrative barriers rather than a failure to work. 
• Fails to adequately consider the significant harms that will be imposed on states, Medicaid beneficiaries, healthcare providers, and state healthcare systems. 
• Unconstitutionally coerces states by imposing new and vague compliance requirements after states had already begun implementing the One Big Beautiful Bill Act based on the statute’s plain language and CMS’s prior guidance. 

The lawsuit was co-led by California Attorney General Rob Bonta, Massachusetts Attorney General Andrea Joy Campbell, and New Jersey Attorney General Jennifer Davenport. They were joined by the attorneys general of Arizona, Colorado, Connecticut, Delaware, District of Columbia, Hawai‘i, Illinois, the governor of Kentucky, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, the governor of Pennsylvania, Rhode Island, Vermont, Virginia, Washington, and Wisconsin.    

###