Ellison sues Trump administration over new Medicaid work requirements
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Minnesota Attorney General Keith Ellison has filed a lawsuit to block the Trump administration from requiring the state to enforce new federal work requirements for Medicaid recipients, arguing the policy is unconstitutional and could strip health coverage from hundreds of thousands of residents.
The lawsuit, filed Thursday, alongside the attorneys general of Oregon, New Mexico and Washington, challenges provisions of the federal H.R. 1 legislation, also known as the One Big Beautiful Bill Act. The law requires states to implement new Medicaid eligibility rules beginning in 2027 or risk losing all federal Medicaid funding.
The attorneys general contend that this financial threat amounts to “unconstitutional coercion” because it forces states to drastically change how they administer Medicaid or face losing billions of dollars in federal support.
The coalition is asking the court to rule that the federal government cannot withhold existing Medicaid funding from states that decline to implement the new work requirements.
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A spokesperson for the Centers for Medicare & Medicaid Services said in a statement to MPR News that the federal agency does not comment on matters involving pending litigation.
New work rules threaten coverage for hundreds of thousands of Minnesotans
In Minnesota, 1.2 million people receive health coverage through Medical Assistance, the state's Medicaid program, and 243,000 residents will be required to meet federal work requirements.
Recipients include children, families, pregnant women, seniors, people with disabilities or complex medical conditions, adults without children, and those experiencing homelessness.
Under the new federal requirements, certain Medicaid recipients must prove that they meet work requirements or qualify for an exemption to maintain coverage.
Minnesotans between the ages of 21 and 64 who apply for Medicaid will need to demonstrate that they have been working, attending school or volunteering for at least 80 hours each month to qualify for or retain health insurance under the joint federal-state program.
The attorneys general argue that the additional paperwork and administrative hurdles could cause hundreds of thousands of people to lose health insurance, including those who might qualify but struggle to navigate the verification process.
"It's a bait-and-switch and it's unconstitutional," Ellison said in a statement, criticizing the legislation for shifting the focus of Medicaid away from providing health coverage to low-income Americans and toward using healthcare access as a mechanism for incentivizing employment.
Ellison added that the legislation could push vulnerable Minnesotans off their health insurance, worsening health outcomes and increasing pressure on hospitals and local governments.
States argue federal government overstepping authority
Medicaid was established in 1965 as a partnership between the federal government and states. Under the program, states contribute funding and administrative resources while receiving federal support to provide healthcare to eligible low-income residents.
Ellison and the other attorneys general argue that the new work requirements represent a significant change to the program because they require states to overhaul eligibility systems and monitor recipients' employment status.
They say that Congress cannot force states to implement these changes by threatening to revoke their existing Medicaid funding.
The lawsuit also argues that states have little practical ability to reject the work requirements. If Minnesota refuses to implement the new requirements, the attorneys general argue that the loss of federal funding would devastate the state's Medicaid program and harm the residents who depend on it.
“H.R. 1’s new eligibility system now threatens to fundamentally transform the Medicaid program, according to the lawsuit. “The work requirement will eventually leave millions of former and prospective Medicaid beneficiaries with no place to turn for basic healthcare. And in a cruel irony, H.R. 1 will also render these individuals less able to work—and expose them to financial catastrophe through increasing medical debt—by depriving them of basic healthcare.”
Potential impact on healthcare system
The attorneys general warn that people who lose coverage could experience interruptions in treatment for chronic illnesses, reduced access to preventive care and greater reliance on emergency services.
The lawsuit argues that these consequences would extend beyond those directly affected by the new requirements, placing further strain on Minnesota's broader healthcare system, and increasing uncompensated care costs for hospitals.
The federal Medicaid work requirements are set to take effect on Jan. 1, 2027.
