Attorney General Neronha, coalition sue Trump Administration for unlawful implementation of new Medicaid work requirements

Attorney General Neronha, coalition sue Trump Administration for unlawful implementation of new Medicaid work requirements

Published on Monday, June 29, 2026

Attorney General Peter F. Neronha today joined a coalition of 24 attorneys general and two governors in filing a lawsuit against the Trump Administration for its unlawful implementation of new Medicaid work requirements included in the One Big Beautiful Bill Act.

Specifically, 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 safety net healthcare program for low-income Americans and is jointly funded by states and the federal government, with the federal government providing at least 50% of the cost of services.

"As the Trump Administration continues to govern by chaos, their erratic, unlawful behavior is harming our most vulnerable Americans," said Attorney General Neronha. "This eleventh hour attempt to further narrow protections for medically frail Medicaid recipients seeks to punish those who cannot fend for themselves. Further, this Administration is once again attempting to sidestep Congress by unlawfully reinterpreting the law, and coercing the states to rush to implement their last-minute changes or face penalties. So while we may have a President that is more concerned about the health of a reflecting pool than the health of Americans, we will fight to stop their unlawful attempts to further restrict health care access."

Congress created exemptions from Medicaid's 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 implementation, CMS surprised states with the interim final rule, "Community Engagement Requirement for Certain Individuals," which adopted a new interpretation of key terms like "medically frail" and makes it harder for medically vulnerable individuals to be excused from the work requirements. While the work requirement provision applies beginning January 1, 2027, states must notify Medicaid recipients about these changes by August 31, 2026, and need significant lead time to prepare those communications. They cannot wait for CMS to address the deficiencies through the ongoing rulemaking process. As a result, the attorneys general are seeking to block implementation of the interim final rule's illegal provisions and to have them ultimately struck down. States have already made substantial investments in reliance on the plain language of the One Big Beautiful Bill Act and CMS's prior guidance and now face the risk of harsh financial penalties for noncompliance with the interim final rule.

The interim final rule makes other changes that increase administrative burdens, create unnecessary red tape, and put eligible people at risk of losing their health coverage - including those who are already working or qualify for an exemption. The rule disregards substantial evidence that should have been considered, fails to adequately evaluate reasonable alternatives, and does not give states clear or workable guidance. Past Medicaid work requirement programs have shown that added red tape causes eligible people to lose coverage, placing greater strain on state Medicaid programs, safety net providers, and emergency rooms, while increasing costs as more medically frail residents become uninsured.

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 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 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.

Joining Attorney General Neronha in filing this lawsuit are the attorneys general of Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon, Vermont, Virginia, Washington, Wisconsin, and the District of Columbia, as well as the governors of Kentucky and Pennsylvania.

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