Judge Strikes Down Medicaid Rule Narrowing 'Medically Frail' Exemption From Work Requirements, Upholds Two Other Limits
A federal judge in Boston on Thursday struck down part of a federal rule that narrowed who qualifies as "medically frail" under the new Medicaid work requirements, while upholding two other limits that a coalition of states had challenged.
U.S. District Judge Richard G. Stearns ruled in Commonwealth of Massachusetts v. Oz, a lawsuit brought by 23 states, the District of Columbia and the governors of Kentucky and Pennsylvania against the Centers for Medicare & Medicaid Services, its director Mehmet Oz, the Department of Health and Human Services and Secretary Robert F. Kennedy Jr. New Jersey Attorney General Jennifer Davenport was one of the coalition's leaders.
What the Medicaid Rule Required
The law signed by President Trump on July 4, 2025, known as H.R. 1 or the One Big Beautiful Bill, makes Medicaid for many adults in the Affordable Care Act expansion group depend on 80 hours a month of work or community service, or at least half-time school, starting Jan. 1, 2027. It exempts people who are "medically frail," and says that term includes people who are blind or disabled, have a substance use disorder, have a disabling mental disorder, have a disability that significantly impairs daily living, or have a serious or complex medical condition.
An interim final rule CMS issued June 3 added a test: to count as medically frail, a person's condition also had to "significantly impair" the person's ability to comply with the work requirement.
Stearns ruled that the added test was beyond CMS's authority. He wrote that the word "including" in the law sets a "definitional floor," and that "the agency lacked authority to exclude any subset of individuals in the five subcategories delineated as 'medically frail' by Congress." He noted that Congress wrote a functional limit into only one of the five categories. The government had argued that the categories did not have to cover "every possible object within" them; the judge did not find that persuasive.
Where the Government Won
The states also challenged a provision that lets states verify medical frailty using only claims and encounter data from the 12 months before an application, and a limit of one self-attestation per continuous period of enrollment. Stearns rejected both challenges, calling the states' objections "unconvincing and falling well short of the arbitrary or capricious standard."
He wrote that the government gave "a non-frivolous rationale" for each provision. The rule says older records "may not reflect the individual's current condition." The judge added: "That the States (or even the court) may disagree with the wisdom of the agency's policies and conclusions, or may have made different choices, is irrelevant." He did not decide the states' separate constitutional claim under the Spending Clause.
What Happens Next
In a separate order, Stearns declared the added test unlawful and set it aside, barred the government from enforcing it against the plaintiff states, and barred the government for six months from penalizing those states for errors or delays in carrying out the rule. He chose vacatur over the government's preferred remedy of sending the rule back to the agency, writing that it gives the parties "the clarity needed" to meet the Jan. 1, 2027 deadline set by Congress, which the ruling does not change.
"This win will help people with complex or serious medical conditions stay on Medicaid and keep their healthcare," Davenport said in a statement reported by the Jersey Vindicator. The court record does not show whether the government plans to appeal.
Sources: Commonwealth of Massachusetts v. Oz, No. 1:26-cv-12962 (D. Mass.), Memorandum and Order on Cross-Motions for Summary Judgment (ECF 147) and Order of Vacatur and Enjoinment (ECF 148), Oct. 29, 2026: https://www.courtlistener.com/docket/73546826/commonwealth-of-massachusetts-v-oz/ ; Jersey Vindicator, "Federal judge strikes down part of Trump Medicaid rule" (Oct. 29, 2026): https://jerseyvindicator.org/2026/10/29/federal-judge-strikes-down-part-of-trump-medicaid-rule/ . Cover photo: HHS headquarters sign by G. Edward Johnson via Wikimedia Commons, CC BY 4.0.
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