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TRENTON — Attorney General Jennifer Davenport today secured a decision by the U.S. District Court for the District of Massachusetts finding the Trump Administration’s implementation of new Medicaid work requirements under the One Big Beautiful Bill Act (OBBBA) was unlawful.

In a lawsuit filed in June 2026, Attorney General Davenport co-led a multistate coalition in challenging provisions of an interim final rule promulgated by the Centers for Medicare & Medicaid Services (CMS), which sought to narrow the Act’s exemptions from Medicaid work requirements for “medically frail” people.

“This win will help people with complex or serious medical conditions stay on Medicaid and keep their healthcare,” said Attorney General Davenport. “I will keep fighting to make sure red tape does not hurt those who are already struggling to stay well and maintain their dignity.”

In today’s decision, the District Court held that the Trump Administration’s implementation of the “medical frailty” exemption from the Medicaid work requirements is contrary to law, vacated the language, issued a permanent injunction, and granted the plaintiff states a six-month stay of enforcement to accommodate any errors or delays resulting from the necessary changes to implementation.

The medical frailty exemption ensures that those with serious or complex conditions, mental disorders, substance abuse disorders, and other medically vulnerable individuals do not lose coverage or face interruptions in care. The court held that CMS lacked the authority to narrow the categories of medically frail individuals by also requiring states to assess whether their condition significantly impairs their ability to work.

If allowed to go into effect, the rule’s unlawful interpretation of “medically frail” would have forced many thousands of vulnerable New Jerseyans to lose access to lifesaving care due to onerous bureaucratic requirements even though they are in fact eligible for Medicaid coverage.

Medicaid is the nation’s safety net healthcare program for low-income Americans and is jointly funded by states and the federal government, with the federal government providing at least 50% of the cost of services. In the OBBBA, Congress created exemptions from Medicaid’s work requirements to ensure that people with serious illnesses and disabilities do not lose coverage or face interruptions in care.

Yet despite months of working with states on implementation, earlier this year, CMS surprised states with an interim final rule that runs contrary to the statutory requirements for medical frailty. The rule would have made it harder for medically vulnerable individuals to be excused from the work requirements, increased administrative burdens, created unnecessary red tape, and put eligible people at risk of losing their health coverage — including those who are already working or qualify for an exemption.

Past Medicaid work requirement programs have shown that added red tape causes eligible people to lose coverage, placing greater strain on state Medicaid programs, safety net providers, and emergency rooms, while increasing costs as more medically frail residents become uninsured.

In New Jersey, Deputy Solicitor General Shankar Duraiswamy, Senior Counsel Samuel Dolinger, Deputy Attorney General Jake Mazeitis, and Deputy Attorney General Geoffrey McGee handled the matter.

Attorney General Davenport co-led this case along with California Attorney General Rob Bonta and Massachusetts Attorney General Andrea Joy Campbell. They were joined by the attorneys general of Arizona, Colorado, Connecticut, Delaware, District of Columbia, Hawai‘i, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin, and the governors of Kentucky and Pennsylvania.