Attorney General Jackson Wins Court Ruling Protecting Healthcare for More than 60,000 North Carolinians with Serious Illnesses

On October 29, 2026, U.S. District Judge Richard Stearns issued a ruling striking down a CMS regulation that narrowed a statutory exemption from Medicaid work requirements. The court held that CMS lacked authority to impose the additional restriction and granted a permanent injunction against its enforcement, ordering the unlawful language removed from the rule. The underlying dispute arose from H.R. 1, which established new Medicaid work requirements but expressly exempted individuals deemed medically frail, including patients with cancer, muscular dystrophy, cystic fibrosis, hemophilia, and Parkinson's disease. CMS issued a rule narrowing that exemption by requiring such patients to demonstrate not only that they had a qualifying serious illness but also that the illness prevented them from meeting an 80-hour monthly work requirement. North Carolina Attorney General Jeff Jackson filed suit against CMS and HHS in June 2026, arguing that CMS exceeded its statutory authority by adding a condition to an exemption Congress had explicitly created. The court agreed, ruling in favor of North Carolina and the 23 other states and two governors that joined the action as co-plaintiffs. The ruling preserves North Carolina's ability to implement the broader Medicaid work requirements without applying the invalidated additional test to medically frail patients. NCDHHS and county social services departments had already begun administrative preparations for the new requirements before the court acted. The broader Medicaid work requirements remain scheduled to take effect January 1, 2027, with an estimated 64,000 North Carolinians with serious illnesses affected by the now-enjoined restriction.