A Federal Judge Refused to Block Medicaid Work Requirements. January 1 Is Now the Hard Deadline for 3 to 7 Million People.

U.S. District Judge Richard Stearns denied the 26-state motion to block Medicaid work requirements on July 29. The ruling keeps the rule in effect. States must notify Medicaid enrollees of the new medically frail standard by August 31 - 26 days from today. Work requirements take effect January 1, 2027.

What the Judge Decided - and What He Did Not

Stearns found that the states failed to demonstrate irreparable harm. His reasoning centered on one key fact: the Centers for Medicare and Medicaid Services agreed to cover 90 percent of states’ implementation costs. That removed the financial injury the states had argued justified emergency relief.

The denial was without prejudice, meaning the states can seek an injunction again if circumstances change. Stearns was explicit that the ruling is not a verdict on the merits. “The case raises difficult issues,” he wrote in his order, involving the scope of authority Congress delegated to CMS. Those questions will be addressed at the summary judgment stage on an expedited briefing schedule. The rule stays in effect while that process plays out.

Who Is Affected and When

The work requirement applies to non-disabled Medicaid expansion adults between 19 and 64. To keep coverage, enrollees must document 80 hours per month of work, school, or community service - or qualify for an exemption.

The contested exemption is the medically frail exclusion. The CMS rule narrowed who qualifies by adding a “significant impairment” test that Congress did not include in the original statute. People with cancer, diabetes, lupus, or serious mental illness may fall into the medically frail category but still need to prove their condition significantly impairs their ability to comply.

The Urban Institute projected that Medicaid work requirements could cause 3 to 7 million enrollees to lose coverage. CMS projected a reduction of approximately 2.3 million individuals in FY2027.

The 33 Days That Remain

States must notify affected enrollees by August 31. Anyone currently on Medicaid who holds a medically frail exemption should contact their state Medicaid office now to confirm whether their exemption remains valid under the new standard.

References: Federal Judge Refuses to Stop Medicaid Work Requirements, for Now | Judge Rejects States’ Bid to Block Medicaid Work Rules | Federal Judge Denies 25 States’ Bid to Block Medicaid Work Rules