A federal judge has struck down a Trump administration rule that would have made it harder for people with serious medical conditions to qualify for an exemption from new Medicaid work requirements, siding with Arizona and 24 other states that challenged the policy.
The Thursday ruling—which could be appealed—removes a requirement that people seeking a “medically frail” exemption prove not only that they have a qualifying condition, but also that the condition significantly impairs their ability to work.
Arizona and the other states argued that the Centers for Medicare & Medicaid Services had gone beyond what Congress authorized when it imposed the additional restriction in June. U.S. District Judge Richard Stearns agreed, finding that Congress had specifically identified categories of people who should qualify for the exemption and that the additional requirement was “contrary to law.”
Stearns warned that requiring patients to provide additional proof could cause those eligible to lose Medicaid coverage, writing that “the States (and public) face potential for great hardship” without court intervention. The ruling bars the federal government from enforcing that provision, and gives states six months to avoid federal penalties for errors or delays in determining who qualifies for a “medically frail” exemption.
The decision comes just two months before Arizona is scheduled to implement the new requirements. Under a 2025 federal budget law, many adults covered through the state’s Medicaid expansion program will have to document 80 hours a month of work, job training or volunteering—or be enrolled in school at least half-time—to keep their coverage.
People with serious or complex medical conditions, substance-use disorders and disabling mental health conditions are among those who can qualify for an exemption. Arizona officials have cautioned that requiring patients to provide additional proof of their medical limitations could create significant new paperwork for patients and providers, delay exemption decisions and cost the state millions of dollars to implement.
“This is a major victory that protects the most vulnerable, medically fragile Arizonans who rely on Medicaid to receive critical care,” Arizona Attorney General Kris Mayes said in a statement following the ruling. “Arizonans otherwise eligible for coverage shouldn’t lose access to their healthcare because of unnecessary red tape.”
The state’s Medicaid agency has estimated that implementing the additional standard would cost an additional $16 million. The Arizona Health Care Cost Containment System (AHCCCS) would need to develop new systems to evaluate patients’ medical conditions, potentially requiring health care providers to document how those conditions affect their ability to work.
More than 429,000 Arizonans ages 19 to 64 are covered through Medicaid expansion. AHCCCS estimates that more than 100,000 of them have healthcare histories suggesting they might have chronic conditions or complex care needs.
AHCCCS said it is evaluating how the ruling will affect its implementation plans and noted that the judge recognized the administrative challenges states face in determining who qualifies as medically frail. Though the agency expects an appeal, AHCCCS said it will continue working with federal officials and healthcare leaders to clarify what Medicaid recipients will need to do to get or keep coverage.
The ruling does not overturn the broader work requirements, which are set to take effect Jan. 1. The judge also upheld other parts of the federal rule governing how states verify medical frailty, including restrictions on using medical records more than 12 months old and on the use of self-reporting.
This article first appeared on Arizona Center for Investigative Reporting and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License. 
