Attorney General Ellison sues Trump Administration over unlawful implementation of Medicaid work requirements for medically frail individuals

Joins 24 AGs and two governors in fighting illegal last-minute changes that will deprive more people of healthcare and harm healthcare systems in Minnesota and nationwide

June 29, 2026 (SAINT PAUL) —  Minnesota Attorney General Keith Ellison today joined a coalition of 24 attorneys general and two governors in suing the Trump Administration over its unlawful implementation of new Medicaid work requirements included in the “One Big Beautiful Bill” Act. Specifically, the lawsuit challenges provisions of an interim final rule published by the U.S. Department of Health and Human Services (HHS) and Centers for Medicare & Medicaid Services (CMS) on June 3, 2026. 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 Act, 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. Despite months of working with states on implementation, CMS surprised states with the interim final rule, “Community Engagement Requirement for Certain Individuals,” which adopted a new interpretation of key terms like “medically frail” and makes it harder for medically vulnerable individuals to be excused from the work requirements. While the work requirement provision applies beginning January 1, 2027, states must notify Medicaid recipients about these changes by August 31, 2026, and need significant lead time to prepare those communications. They cannot wait for CMS to address the deficiencies through the ongoing rulemaking process.

As a result, Attorney General Ellison and the coalition are seeking to block implementation of the interim final rule’s illegal provisions and to have them ultimately struck down. Minnesota and the other plaintiff states have already made substantial investments in reliance on the plain language of the One Big Beautiful Bill Act and CMS’s prior guidance. Now that CMS has changed its mind at the last minute, Minnesota and the other states face the risk of harsh financial penalties for noncompliance with the interim final rule.

“The so-called Big Beautiful Bill that Trump and the Republican Congress passed is bad enough: it pays for trillions in tax breaks for billionaires by ripping healthcare and food assistance away from average- and lower-income folks who are already struggling to make ends meet in Trump’s rigged economy. Now the Trump Administration has gone and actually made this worse,” Attorney General Ellison said. “Sadly, it should come as no surprise that once again, they’ve broken the law in their relentless effort to make billionaires richer and everyone else poorer and sicker. It should also come as no surprise that once again, I’m taking them to court to stand up for the rule of law and fight for Minnesotans who are trying to afford their lives and afford to live.”

The interim final rule makes other changes that increase administrative burdens, create 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. The rule disregards substantial evidence that should have been considered, fails to adequately evaluate reasonable alternatives, and does not give states clear or workable guidance. 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.

Minnesota’s state Medicaid program, known as Medical Assistance, is the largest single source of health insurance in the State. Medical Assistance provides health coverage for almost 1.2 million Minnesotans, or approximately one in every five state residents. The rule’s new provisions will be very costly for Minnesota to design and implement in the short time frame provided. And if the rule is allowed to take effect, Minnesotans will lose coverage, with the biggest anticipated impact on Minnesotans with disabilities and chronic health conditions. The numbers of uninsured Minnesotans will increase as a result, which will have negative effects throughout Minnesota’s entire healthcare system.

In today’s lawsuit, Attorney General Ellison and the coalition allege that the interim final rule:

• Unlawfully narrows Congress's protections for medically frail Medicaid recipients.
• Violates the Administrative Procedure Act by ignoring substantial evidence that work reporting requirements cause eligible individuals to lose healthcare coverage because of administrative barriers rather than a failure to work.
• Fails to adequately consider the significant harms that will be imposed on states, Medicaid beneficiaries, healthcare providers, and state healthcare systems.
• Unconstitutionally coerces states by imposing new compliance requirements after states had already begun implementing the One Big Beautiful Bill Act based on the statute’s plain language and CMS's prior guidance.

Joining Attorney General Ellison in the lawsuit are California Attorney General Rob Bonta, Massachusetts Attorney General Andrea Joy Campbell, and New Jersey Attorney General Jennifer Davenport, who led the lawsuit; the attorneys general of Arizona, Colorado, Connecticut, Delaware, District of Columbia, Hawai‘i, Illinois, Maine, Maryland, Michigan, Nevada, New Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington, and Wisconsin; and the governors of Kentucky and Pennsylvania.