It’s a victory for more than two dozen states that had sued to block the definition, along with providers, consumer advocates and other critics that had opposed it.

Under the GOP’s “Big Beautiful Bill” passed last summer, adults who receive Medicaid through the Affordable Care Act’s expansion have to log at least 80 hours of work, volunteering or schooling each month to stay eligible for the safety-net insurance program starting in 2027.

The law excluded people who are blind or disabled, along with those with a substance use or serious mental health disorder; a physical, intellectual or developmental disability that impairs daily living; or a serious or complex medical condition.

States, up against a tight timeline to stand up the work mandates, relied on informal guidance from the CMS about how to determine which enrollees with a serious or complex medical condition qualified for an exemption. So many were shocked when the agency finalized formal guidance this summer requiring medically frail people to be so sick they’re unable to comply with the work requirements, instead of people who are simply very sick.

The rule sparked significant backlash for creating an additional hurdle for ill Medicaid enrollees to prove they’re exempt. Democrats, patient advocates, medical groups and other critics argued it could drive up the number of eligible Medicaid beneficiaries who improperly lose coverage.

In June, 25 states and the District of Columbia sued over the rule, arguing that several stipulations — especially the medical frailty definition — went well beyond what was outlined in the “Big Beautiful Bill.”

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