A federal judge has denied a request from 26 states to postpone the implementation of Medicaid work requirements announced in June. The ruling, issued by U.S. District Judge Richard Stearns of Massachusetts, is a significant development in a case that seeks to alter one of President Trump’s biggest legislative priorities.
The suit is focused on the implementation of a work requirement for people who receive Medicaid, with the target of implementing the changes by Jan. 1. However, states must also communicate with Medicaid recipients by Aug. 31 regarding how the changes may affect those enrollees.
In their request for a preliminary injunction, the states argued that they did not have the staff or capacity to roll out the work requirement as requested on the timeline put forth by the federal Centers for Medicare and Medicaid Services. They claimed that it would cause harm and chaos and also argued that it violates the Administrative Procedure Act, which governs how agencies should implement changes in policy.
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The states wrote in their suit that the Centers for Medicare and Medicaid Services adopted a rule that dramatically narrowed the Congressionally established categorical exclusions from the work requirement for some of the most vulnerable Medicaid members.
Government attorneys argued that Congress vested the power to issue the work requirement when it passed H.R. 1, commonly referred to as the One Big Beautiful Bill. Judge Richard Stearns wrote that it was unclear how much of the responsibility for the tight timeline the states are under can be blamed on the Centers for Medicare and Medicaid Services.
He also wrote that he was unconvinced “that the States have shown that their expenditures are likely to be totally irrecoverable.” The order on the preliminary injunction was filed without prejudice, meaning the suit will proceed to a more thorough hearing on the merits of the case.
The states argued that the Centers for Medicare and Medicaid Services is encroaching on Congress’ power in interpreting H.R. 1 in a more limited way than the letter of the law requires. While Judge Stearns denied the preliminary injunction, he wrote that “this case presents difficult issues regarding the scope of Congress’s delegation of interpretative authority to the Secretary and the faithfulness to Congressional intent with which the Secretary performed his task.”
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Judge Stearns hopes to schedule a more thorough hearing on the merits of the case before the work requirement needs to be implemented on Jan. 1. Should movement on the case stall, he wrote, states can renew their request for the court to offer relief.
The ruling is a significant development in the ongoing debate over Medicaid work requirements and their implementation.
The case will proceed.