Four states sued the Trump administration on Thursday to stop the federal government from cutting their Medicaid money if they do not enforce the new Medicaid work requirement. Oregon, Washington, Minnesota and New Mexico filed the case in federal court in Eugene, Oregon, against the Centers for Medicare & Medicaid Services, its administrator, Mehmet Oz, and Health and Human Services Secretary Robert F. Kennedy Jr. The case is Oregon v. Oz.
The requirement comes from the 2025 budget law known as H.R. 1. Starting in 2027, adults 19 to 64 who are covered through the Affordable Care Act's Medicaid expansion must show 80 hours a month of work, community service, a work program or half-time school, or earn at least the federal minimum wage times 80 hours. Edit USA's guide to the rule explains the hours and who is exempt.
What the states are asking for
The complaint argues that Congress went beyond its spending power. When the states signed up for Medicaid and later the ACA expansion, they say, the program was built on need. Tying coverage to work turns it into a different program they never agreed to, and the threat of losing federal funds leaves them no real choice. The argument leans on the Supreme Court's 2012 decision on the Affordable Care Act, which barred the government from pulling existing Medicaid funds from states that refused the expansion.
The states want the court to declare it unconstitutional for the government to withhold or suspend their existing Medicaid funds because they do not carry out the work requirement. They also ask for preliminary and permanent orders blocking any such cut.
What is at stake in the four states
In Washington, more than 600,000 people covered through the expansion would have to file the new paperwork regularly, according to the state attorney general's announcement. The state's Health Care Authority estimates that at least 20% of them, about 120,000 people, may lose coverage, with rural counties hit hardest. More than 1.9 million Washington residents get care through Apple Health, the state's name for Medicaid. Attorney General Nick Brown said the changes would make people "lose their health insurance, stop going to the doctor when they're sick, and rely on our public hospitals for emergency care."
Oregon has 564,177 people in its expansion group, about 16% of its adults. The expansion brings in about $5.1 billion this fiscal year, 54% of the state's federal Medicaid money, which the states cite as the reason they cannot simply drop it.
Nationwide, the complaint counts about 66 million Medicaid enrollees, 19.2 million of them through the expansion, citing a CMS enrollment report released in September. People removed for not meeting the requirement also lose the ability to buy subsidized coverage on an ACA exchange, the states note.
What it means for enrollees now
Nothing changes for enrollees yet. No judge has ruled, and filing a lawsuit does not pause the requirement. The states expect large-scale removals from Medicaid to begin early in 2027. Unless a court steps in, expansion enrollees in all four states will still have to meet the requirement once it takes effect.
