Twenty-five states and the District of Columbia asked a federal court to pause the parts of Medicaid's new work-reporting rule that decide which disabled adults are exempt. On Thursday, July 30, Judge Richard Stearns of the U.S. District Court for the District of Massachusetts told them no. The rule takes legal effect the next morning.

For families who have been following this case since the states filed it on June 29, the practical result is short: nothing is paused, nothing is struck down, and the calendar that runs to January 1, 2027 is still running.

What the Judge Decided, and What He Did Not

Stearns denied the preliminary injunction in a six-page order. He did not rule that the regulation is lawful. He ruled that the states had not shown irreparable harm, because the injury they described was the cost of setting up new eligibility systems, and the federal government has agreed to reimburse 90 percent of those costs.

"There is a certain point at which damages fail to justify the issuance of such an extraordinary measure," Stearns wrote.

He was careful about what the order was not. The denial, he said, "is not a reflection or anticipation of its ultimate views on the merits of the underlying litigation." He described the case as raising hard questions about how far Congress delegated interpretive authority to the Secretary of Health and Human Services, and about the data behind the rule. Briefing continues on those questions, and the rule operates the entire time it takes to answer them.

The Sentence the Case Is Really About

Section 71119 of H.R. 1 exempts people who are "medically frail or otherwise [have] special medical needs." It names the categories: people who are blind or disabled under the SSI standard, people with substance use disorders, people with disabling mental disorders, people with physical, intellectual, or developmental disabilities that significantly impair activities of daily living, and people with serious or complex medical conditions.

The interim final rule CMS issued on June 3 adds a second test. Under 42 CFR 435.554(c)(5)(i), a person has to fall into one of those categories and show that the condition "significantly impairs the individual's ability to comply with the community engagement requirement."

Congress wrote a test about your disability. The rule adds a second test about your ability to file paperwork. An adult with an intellectual disability who can, with support, log hours in a state portal may satisfy the statute and fail the regulation. The states also challenged the rule's limits on self-attestation, its claims lookback periods, its hardship exceptions, and how exemptions carry over at renewal.

CMS projects 2.3 million fewer enrollees in fiscal year 2027.

The Dates That Matter Now

The requirement reaches non-pregnant adults ages 19 through 64 who are in or eligible for the ACA Medicaid expansion group and not enrolled in Medicare. Qualifying activity is 80 hours a month of work, volunteering, or job training.

The rule takes effect July 31, 2026, the same day the public comment period closes. States must begin notifying enrollees about the new requirements by the end of August. Compliance itself begins January 1, 2027. The plaintiff states have separately asked for a six-month delay of that implementation date, which is now the live question in the case rather than the injunction.

That leaves about five months before anyone has to report anything, and the exemption paperwork is what fills them.

What Disability Families Can Do Between Now and January

Start the paper trail before the notice arrives. The exemption categories haven't changed, but the burden of proving you fit one has. Ask your child's or your own treating provider for a letter that does two things: names the diagnosis in the language of the statutory categories, and states specifically how the condition affects the ability to meet a monthly reporting obligation. That second half is the part the regulation added, and it is the part a generic diagnosis letter will miss.

Keep copies of anything that already establishes disability status. SSI determinations, school records showing an intellectual or developmental disability, hospital discharge summaries, and prescription histories all carry weight. If you receive services through a waiver, your service plan is evidence too.

Do not assume your state will accept self-attestation. Six states already said they won't, and the rule narrows attestation everywhere. When your state's notice arrives in August, read it for the exemption instructions specifically, and note the deadline printed on it rather than the January date.

If you are denied an exemption, the denial is appealable through your state Medicaid agency's fair hearing process, and the deadline for requesting a hearing is usually short. Your state's protection and advocacy organization can help with that filing at no cost.

The court left the rule standing without saying it was right. Families do not have to resolve that question. They have to be holding the right documents when the state asks for them.

Related reading: Medicaid Work Requirements Are Coming to Every State · CMS Just Published the Rule That Defines Medicaid's 'Medically Frail' Exemption · 25 States Sue to Block Medicaid's New Work Requirements Rule for Disabled Adults · Six States Won't Accept Self-Attestation for the Medicaid Disability Work Exemption