Federal Judge Vacates CMS's 'Unlawful Substantial Impairment Test' for Medicaid Work Requirements

A federal judge issued a critical ruling that vacates a provision of an interim final rule (IFR) by the Center for Medicare and Medicaid Services (CMS). The IFR, issued in June 2026, had made it significantly more difficult for 'medically frail' individuals to qualify for an exclusion from Medicaid work reporting requirements. This decision is expected to help many individuals with serious health conditions maintain their health insurance.