A new federal rule from the Centers for Medicare and Medicaid Services (CMS) is sparking a legal battle between 26 states and the federal government. The regulation, which mandates stricter documentation for Medicaid work requirements, faces criticism from state officials who warn it creates administrative hurdles that could cause vulnerable, medically frail, or disabled residents to lose essential health coverage due to red tape rather than ineligibility.
The Legal Challenge Against CMS Oversight
Massachusetts Attorney General Andrea Campbell is currently co-leading a coalition of 26 states in a lawsuit aimed at blocking the new CMS rule. The states argue that the federal guidance places an untenable administrative burden on both patients and healthcare providers. According to Jennifer Tolbert, deputy director of the Program on Medicaid and the Uninsured for the health policy organization KFF, the rule “places an administrative burden on providers,” such as job readiness evaluations, that they often lack the time or specific expertise to perform.
The core of the dispute lies in how “medically frail” or “complex” conditions are defined. While Congress exempted these groups from work requirements, the CMS rule mandates that individuals must prove their condition “significantly impairs” their ability to work. Critics argue this ignores the reality of chronic illnesses, where patients may struggle with conditions that flare up intermittently, making a binary “able to work” vs. “unable to work” assessment medically and logistically difficult.
Data from Arkansas’s Medicaid work requirements suggested that these requirements don’t increase the number of people on Medicaid who are working, but serve mainly to boot people off Medicaid because they don’t submit reports.
Administrative Burdens and the Risk of Coverage Loss
State officials are concerned that the federal government’s approach will lead to widespread coverage loss. Stacey Nee, a spokesperson for MassHealth, noted in a statement to the editorial board that the requirements are “intentionally designed to be so burdensome to meet that people lose their care.” Massachusetts has estimated that 300,000 people will lose health insurance coverage through MassHealth or the Health Connector due to various provisions under the federal One Big Beautiful Bill Act, with the new CMS rule potentially compounding that impact.
While the federal government intends to allow “self-attestation” for some disability claims in 2027, the rule suggests that outside documentation will be required beyond 2027. This creates a long-term hurdle for patients with conditions like Parkinson’s disease or cancer, who would be forced to navigate bureaucratic processes simply to maintain their existing health insurance.
State-Level Mitigation Strategies
In response to these federal shifts, Massachusetts is investing in infrastructure to protect its residents. The Legislature appropriated $10 million for the state to work with consumer advocacy group Health Care for All to inform MassHealth members about the new requirements. According to Hannah Frigand, senior director of HelpLine and Public Programs for the group, they will provide funding to community partner organizations—including shelters and faith-based groups—to conduct direct outreach and help people fill out paperwork.
Furthermore, the fiscal 2027 state budget signed by Governor Maura Healey includes around $30 million for MassHealth. This funding is earmarked for hiring staff, communicating with members, and improving data systems. These systems are designed to automate the exemption process by matching MassHealth enrollment data with existing tax and state records, effectively reducing the need for manual reporting whenever possible.
Frequently Asked Questions
- Why are states suing over the CMS rule?
States argue the rule imposes unnecessary administrative burdens that risk stripping health coverage from disabled and medically frail individuals who are technically eligible for Medicaid. - What is the “self-attestation” timeline?
The federal government limits the ability of patients to use “self-attestation” beyond 2027, suggesting outside documentation would be required. - How are states trying to help enrollees?
States like Massachusetts are using funding to improve data-matching systems that automatically verify eligibility, and they are partnering with community organizations to help members complete required reports.
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