Last year, Congress passed H.R. 1, also known as the One Big Beautiful Bill Act (OBBBA), adding a new work requirement for people ages 19 to 64 eligible for Medicaid through the Affordable Care Act’s expansion. Beginning January 1, 2027, these individuals generally will be required to work, volunteer, or attend school for at least 80 hours per month to enroll in or maintain coverage.
To protect people with significant health conditions from the new requirement, Congress included an exemption for people who are “medically frail” or otherwise have special medical needs. This includes individuals who meet the Social Security definition of disability; have a substance use disorder; have a disabling mental health condition; have a physical, intellectual, or developmental disability that significantly impairs their ability to perform one or more activities of daily living; or have a serious or complex medical condition. Congress presented this exemption as a safeguard to ensure that people who are “medically frail” would not lose access to critical health coverage because of the new rule.
This summer, the Centers for Medicare & Medicaid Services (CMS) issued an interim final rule implementing H.R. 1’s work requirements. The new rule adds a requirement Congress never wrote. CMS has said it is not enough to show you have one of these conditions—you must also demonstrate that the qualifying condition “significantly impairs” your ability to work, volunteer, or attend school for at least 80 hours a month. That added requirement is now at the center of a legal challenge brought by 25 states and D.C. in Commonwealth of Massachusetts et al. v. Oz et al.
Through the Health Scholars Legal Initiative (HSLI), our program filed an amicus brief in the case in September and submitted public comments in July, on behalf of the American Public Health Association, Grantmakers In Health, the Jacobs Institute of Women’s Health, the National Center for Medical-Legal Partnership, Liberty Health Alliance, and over 160 public health deans, chairs, and scholars.
Both filings make the case that the rule cannot stand—on procedural grounds, on the merits of what the evidence actually shows, and on the text of the statute itself.
A Rule Without a Rationale
Our amicus brief argues that CMS’ rule is arbitrary and capricious under the Administrative Procedure Act, meaning the agency did not engage in the reasoned decision-making the law requires before adopting a change of this magnitude. The brief’s central focus is that CMS had evidence before it demonstrating the extensive harms this rule would cause, and adopted the rule regardless.
New Barriers to Proving Eligibility
Beyond the significant-impairment test it added to the medically frail exemption, the rule restricts how an individual may prove eligibility. States may rely only on Medicaid claims data from the preceding 12 months, even though eligibility records often lag longer and many permanent conditions generate no recent claims at all. Individuals may attest to their own condition only once per enrollment period, meaning that someone who attests to one qualifying condition may not attest again for an unrelated diagnosis later, for as long as they remain continuously enrolled. States are also generally barred from relying on a diagnosis or claims data alone; some additional documentation is required.
Our brief argues that these restrictions function as unnecessary, burdensome administrative barriers rather than necessary legal ones. States generally lack records showing whether a specific medical condition prevents an individual from working 80 hours a month; that kind of individualized determination typically requires the sort of detailed evidence about a person’s ability to work that most medical records do not contain and most treating physicians do not generate. As a result, individuals will largely have to obtain and submit this documentation themselves, and the brief argues many will be unable to do so.
The Evidence CMS Already Had
CMS had this evidence in hand before finalizing the rule. Georgia’s ongoing work-requirement program, which relies on the same kind of manual reporting, has enrolled only 19,397 people out of an estimated 240,000 who are eligible. Additionally, procedural issues like missing paperwork alone accounted for 22 percent of application denials and 30 percent of disenrollments. A separate analysis of Arkansas’ Medicaid work-requirement data found that if the state had required everyone to manually report their status, roughly 98 percent would have been marked “noncompliant.”
CMS’ own estimates failed to account for this evidence. The agency projected that only 10 percent of people subject to the community engagement requirement would qualify as medically frail. That figure came from an analysis published before the rule, and it measured only people who reported being completely unable to work over the prior year. It left out a much larger group of people who do work, but cannot consistently hit 80 hours a month because of a health condition.
Additionally, CMS separately estimated that only about 7 percent of qualifying people would be wrongly denied or disenrolled for administrative reasons, a number that ignores the very documentation requirements—the 12-month lookback, the one-time attestation, and the ban on claims data alone—that Georgia’s and Arkansas’ numbers show drive coverage loss. Researchers project that CMS’ restrictive definition of medical frailty, combined with these documentation limits, will cause nearly 2 million more people to lose Medicaid coverage than would lose it under the categorical exemption Congress actually wrote.
The Toll on the Health Care System
Our brief also argues that CMS disregarded the consequences these coverage losses would have for the health care system itself. The same evidence available to CMS shows that Medicaid expansion reduced providers’ uncompensated care costs by more than half and improved population health broadly; the coverage losses caused by this rule should therefore be expected to reverse those gains, straining community health centers and other safety-net providers that serve a disproportionate share of low-income, high-need patients, and increasing costs for states.
Coverage Loss Is a Health Risk
For the individuals the medically frail exemption is intended to protect, even a short coverage gap can be dangerous. Interruptions in Medicaid coverage are associated with skipped medications, delayed treatment, and avoidable emergency department visits and hospitalizations. This population faces the greatest risk of losing coverage under the rule; not because they fail to qualify for the statute’s protection, but because of the documentation required to prove it.
Taking Away Coverage Will Not Increase Employment
Our brief argues that CMS’ claim that these work requirements will help individuals with disabilities and serious health conditions to work is not only unsupported; it runs counter to the evidence available to CMS, including the agency’s own data. A substantial body of research shows that Medicaid coverage is often what enables individuals with chronic or complex conditions and disabilities to work. Medicaid expansion, for instance, increased the share of disabled adults who reported working or being self-employed from 41 percent to 47 percent between 2013 and 2017. CMS’ own data from its Arkansas and Georgia demonstrations—the same programs discussed above—showed substantial coverage losses with no measurable increase in employment. Many individuals with serious health conditions are already working as they can; removing the coverage that helps them manage those conditions is more likely to push them out of the workforce than into it.
Months in the Making
September’s amicus brief builds directly on analyses Hirsh scholars have been developing for over a year. In April of last year, members of the Health Scholars Legal Initiative (HSLI) published in The Milbank Quarterly an analysis of who would be most impacted by work requirements: older, health-burdened low-income women. In December of last year, we examined in the Commonwealth Fund what a workable medical frailty exemption would need to include, before CMS had drafted this rule. In April, we wrote in Health Affairs Forefront that due process protections would be the make-or-break issue as states began implementation. After the rule was released in June, we returned to Health Affairs Forefront to lay out, in detail, how the rule’s medical frailty definition conflicts with the statute it’s supposed to implement. Additionally, a complementary analysis in partnership with the Geiger Gibson Program documented the broader stakes of Medicaid work-reporting requirements, finding that they could put more than a decade of gains from Medicaid expansion—including improvements in coverage, access to care, health outcomes, and financial stability—at risk. In September, HSLI staff published in The Milbank Quarterly about how the medical frailty rule is irrational and ignores the profound impacts that the loss of Medicaid by low-income older adults will have on the Medicare program.
What Comes Next?
In August, shortly after the rule was released, a coalition of 25 states and D.C. sued CMS in Commonwealth of Massachusetts et al. v. Oz et al., challenging various provisions of the rule, with a particular focus on the “significantly impaired” requirement. This case is currently proceeding in the District Court of Massachusetts, where the plaintiffs have asked the judge to declare that CMS’ actions are unlawful and vacate the agency’s rule. For updates on the litigation, including major decisions as they occur, visit our webpage on the case.
As this litigation proceeds, states are beginning to develop verification processes that align with CMS’ rule, and advocates continue to educate potential and current Medicaid beneficiaries about what this means for their access to health care. The outcome in this case is crucial to how states and advocates prepare for these major changes to Medicaid coverage beginning in 2027.