Attorney General Ellison sues to block unprecedented changes to Medicaid eligibility that will kick Minnesotans off healthcare

H.R. 1 compels states to enforce unprecedented new work requirements or lose all Medicaid funding — fundamentally changes Medicaid from a healthcare program to a work program that leverages healthcare for compliance

Changes Congress passed and Trump HHS is implementing constitute unconstitutional coercion of states — AG Ellison argues court should allow Minnesota to opt out of work requirements without losing Medicaid funding

Hundreds of thousands of eligible Minnesotans could lose healthcare coverage just because of Congress’s new red tape, straining Minnesota’s healthcare system and leading to more serious illness and deaths

November 6, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison late yesterday filed a lawsuit to block the Trump Administration from compelling Minnesota to enforce unprecedented new work requirements for receiving Medicaid or risk losing all Minnesota’s Medicaid funding. Strict new requirements, which Congress passed in H.R. 1 and are supposed to be implemented in 2027, would force more than hundreds of thousands of Minnesotans to cut through onerous bureaucratic red tape a regular basis to prove they meet the work requirements just to keep their health insurance, which Medicaid recipients have never been required to do before.

In the lawsuit, Attorney General Ellison and the attorneys general of New Mexico, Oregon, and Washington argue that the radical new requirements fundamentally transform Medicaid from a federally funded program to ensure that low-income people have access to healthcare into a federal work program that leverages access to healthcare for compliance. They argue that consistent with a significant 2012 U.S. Supreme Court decision, this dramatic change in the states’ 60-year Medicaid compact with the federal government means states cannot be compelled to comply with these eligibility changes and that the financial penalty Congress imposed for not complying with them — a loss of all Medicare funding — constitutes unconstitutional coercion on the states and exceeds Congress’s spending power.

In Minnesota, 1.2 million people — or about one every five Minnesotans — rely on Medicaid, known in Minnesota as Medical Assistance, for their healthcare. Medicaid’s coverage includes children and families, pregnant women, adults without children, seniors, and people who are blind or have disabilities. Its members include some of the most vulnerable residents in the state, such as those experiencing homelessness, living with significant disabilities, or who have a serious or complex medical condition.

The new work requirements, which have never existed in the six decades that Medicaid has helped ensure that low-income and vulnerable Americans can receive necessary healthcare no matter their economic circumstances, could lead to hundreds of thousands of Minnesotans losing their healthcare. This would produce enormous strain on the healthcare system throughout Minnesota, as well on strain on state and local governments, and would lead to more serious illnesses and more deaths.

“It’s bad enough that H.R. 1 robs one trillion dollars from Americans’ healthcare — one trillion — and gives it away to billionaires. It’s just as bad that this ugly bill’s unprecedented changes to Medicaid eligibility fundamentally transform the very nature of Medicaid from ensuring low-income can get healthcare into a system that withholds a person’s basic healthcare needs as a means to incentivize behavior. It’s a bait-and-switch and it’s unconstitutional,” Attorney General Ellison said. “This cruel bill, and the cruel former majorities in Congress that passed it, could push hundreds of Minnesotans off their healthcare and into ill health or worse — and that hurts us all. I’m determined to keep this from happening to people.”

Medicaid, Medicaid expansion, and impacts of H.R. 1

Congress created the Medicaid program in 1965 as a federal-state partnership. The program’s promise was straightforward: States that chose to participate would contribute administrative and financial resources, and the federal government would do the same, all with the goal of promoting healthcare coverage for the neediest among us. Over the next 40 years, every state joined, and the program was incrementally expanded to include new categories of eligibility in pursuit of its original objective.

Then in 2010, Congress enacted the Patient Protection and Affordable Care Act (ACA), which marked a major change: it expanded Medicaid to include the nation’s entire non-elderly population below 133 percent of the federal poverty level. However, in a significant 2012 decision in National Federation of Independent Business v. Sebelius, or NFIB, the U.S. Supreme Court ruled that Congress could not force states to participate in Medicaid expansion. Minnesota, however, did choose to participate in Medicaid expansion and has done so for the last 12 years.

As with the original Medicaid program, states like Minnesota that chose to participate in the ACA expansion opted into something like a contract: the states agreed to restructure their Medicaid programs and dedicate substantial administrative and financial resources to implementing the new program; in exchange, the federal government provided a large infusion of funding so that the states could increase the number of their residents covered by health insurance.

In 2025, the terms of these two deals took a dramatic turn when Congress enacted H.R. 1, commonly known as the “One Big Beautiful Bill Act.” H.R. 1 superimposes a new eligibility system on Medicaid that, for the first time in the program’s 60-year history, will make healthcare coverage contingent on work. H.R. 1 will also significantly shrink the Medicaid program by threatening to throw millions of beneficiaries out of it. This will happen either because those beneficiaries failed to work sufficient hours or, in many cases, because they simply failed to navigate the bureaucratic process of documenting their work or demonstrating an exemption. Since most of those disenrolled will lack any alternative source of healthcare coverage, they will lose access to treatment for chronic conditions, preventative medicine, and most other routine medical care. The inevitable results will include increasing strain on hospitals from uncompensated emergency visits, diminished public resources, higher rates of uncontrolled disease, and eventually, preventable deaths.

H.R. 1’s unprecedented new Medicaid eligibility system also puts States that signed up for Medicaid and the ACA expansion in a bind. Minnesota and the states — not the federal government — will tasked with enforcing this new eligibility system by finding beneficiaries subject to the requirement who cannot document whether they satisfied it. And Minnesota and the states, not Congress or the Trump Administration, will have to deliver the bad news to those disenrolled.

But Minnesota does not have a realistic option to decline this policy. If the state fails to implement it, then under H.R. 1, Minnesota will lose all Medicaid funding — a threat the Supreme Court previously characterized in its 2012 NFIB decision as “a gun to the head.” Nor could Minnesota realistically try to evade the work requirement by opting out of ACA expansion: in Minnesota, ACA expansion accounts for a large share of the state’s total federal Medicaid funding. Having already built up the expectations of residents who have come to rely on coverage from the expansion — and having also invested substantial administrative resources into implementing that policy — it is simply too late for Minnesota to back out, even if the state was willingto abandon the ACA’s promise of increasing health coverage.

Attorney General Ellison and the coalition argue therefore that the financial penalty accompanying H.R. 1’s work requirement is unconstitutionally coercive and exceeds Congress’s spending power. In NFIB, the Court held that Congress could not compel States to join the ACA expansion by threatening their existing Medicaid funding because that expansion was effectively a new program, not a mere alteration of the original one. That rationale applies here here: to quote from NFIB, H.R. 1’s work requirement will “dramatically” change Medicaid by “surprising” States with a “shift in kind, not merely degree” around Medicaid eligibility. Under the legislation’s new system, Medicaid “is no longer a program to care for the neediest among us,” but instead will be “transformed into a program” that, for the first time in its 60-year history, is designed to promote work by leveraging healthcare.

H.R. 1 therefore imposes a more radical transformation than even the ACA expansion: while the latter merely broadened eligibility, H.R. 1 requires state agencies to rebuild their eligibility systems to scrutinize beneficiaries’ occupations — a task that bears no relationship to the objective of Medicaid or the eligibility criteria that previously governed it. Again quoting the Supreme Court from its 2012 NFIB decision, Congress therefore cannot “penalize” States that decline implement this new eligibility system “by taking away their existing Medicaid funding.” Any other result would “threaten the political accountability key to our federal system,” because under these circumstances, States lack “a legitimate choice whether to accept the federal conditions in exchange for federal funds.”

For these reasons, Attorney General Ellison and the coalition are asking the court to rule that it would be unconstitutional for the federal government to withhold Medicaid funding from their states, including Minnesota, if they decline to implement H.R. 1’s work requirement. The court should rule that consistent with the Supreme Court’s finding in NFIB, state participation in H.R. 1’s unprecedented new eligibility system should be optional.

Joining Attorney General Ellison in filing this lawsuit are Oregon Attorney General Dan Rayfield, New Mexico Attorney General Raúl Torrez, and Washington Attorney General Nick Brown.