Twenty-five states and the District of Columbia, led by Democratic officials, filed a joint lawsuit on June 29 against the Trump administration. They are demanding an immediate halt to a new Medicaid rule issued earlier this month, arguing that the regulation will strip essential healthcare services from many eligible Americans.
The plaintiffs, comprising Democratic state attorneys general and governors, contend that the new rule—issued by the Centers for Medicare & Medicaid Services (CMS)—offers a narrow interpretation of provisions within the “Big and Beautiful” tax and spending bill. They allege that actions such as tightening the definition of who qualifies as “medically fragile” violate the Administrative Procedure Act.
View from the White House in Washington, D.C. on May 11.
Under the “Big and Beautiful” tax and spending bill, which became law in July 2025, individuals aged 19 to 64 enrolled in the expansion program must work or participate in community service for at least 80 hours per month, or engage in half-day educational programs, starting January 1, 2027, to remain eligible for Medicaid. Exemptions are currently available for those deemed “medically fragile” or undergoing addiction treatment.
However, under the new rule, the threshold for exemption is significantly higher. Applicants must now demonstrate that their health condition “severely impairs” their ability to work, volunteer, or attend school to qualify for an exemption.
Democratic officials argue in their complaint that this new rule contradicts preliminary guidance materials previously provided by CMS to the states. Furthermore, they claim the rule imposes undue administrative burdens. Medically vulnerable individuals, such as those with disabilities or undergoing cancer treatment, will now be forced to submit additional documentation to prove their eligibility, risking the loss of their Medicaid coverage if they fail to do so.
