By Madeleine Graham

In late June, as part of a coalition of 24 attorneys general and two governors, Michigan Attorney General Dana Nessel filed a lawsuit in response to the Trump administration’s implementation of new Medicaid work requirements included in the One Big Beautiful Bill Act.

According to a July 1 press release from Nessel’s office, the lawsuit specifically challenges provisions of an interim final rule — “Community Engagement Requirement for Certain Individuals” — which she and her co-plaintiffs argue “adopted a new interpretation of key terms like ‘medically frail,’” and “makes it harder for medically vulnerable individuals to be excused from the work requirements.”

Medicaid is the largest healthcare program in the United States, providing healthcare coverage for some of the nation’s most vulnerable populations including low-income families, elderly and disabled individuals, and pregnant women. 

Nessel and the lawsuit’s other plaintiffs argue that congress created exemptions from Medicaid’s work requirements to ensure that people with serious illnesses and disabilities do not lose coverage or face interruptions in care, but the new rule instead “creates new requirements that constrain who is exempt” and will result in loss of coverage for many such individuals and “cause harm and chaos” for the plaintiffs’ State Medicaid agencies to implement.

“Medicaid exists to protect our most vulnerable, but this arbitrary rule would strip healthcare from thousands of Michiganders who would otherwise qualify and who desperately need it,” said Nessel in the July 1 press release. “On top of that, state Medicaid agencies remain in the dark on how to even administer these new requirements, which could cost Michigan millions.”

In March 2025, the Michigan Department of Health and Human Services (MDHHS) cited that one in four Michiganders was covered by Medicaid. In a separate report from KFF (formerly Kaiser Family Foundation) issued around the same time, it was estimated 71% of the state’s adult Medicaid recipients were working.

While the work requirement provision becomes effective January 1, 2027, states must notify Medicaid recipients about the modifications by August 31, 2026. Nessel and her co-plaintiffs note that to do so requires significant advance notice to prepare those communications and develop eligibility systems and methods for operation.

To further complicate the landscape, Medicaid recipients will have to file for renewal twice annually instead of just annually to keep their coverage, which a MDHHS representative told East Village Magazine: “will create more administrative steps for recipients, which may lead to coverage loss, especially for individuals who struggle with documentation, technology access or frequent changes in work status.”

“States already made substantial investments to ensure compliance with the One Big Beautiful Bill Act and now face the risk of harsh financial penalties if they are unable to comply with the interim final rule,” Nessel’s press release reads. “As a result, through the lawsuit, the attorneys general are seeking to block implementation of the interim final rule’s illegal provisions and to have them ultimately struck down.”

Lynn Sutfin, Public Information Officer for MDHHS, had the following to offer in relation to the work and reporting requirements in the One Big Beautiful Bill Act (also called H.R. 1):

“Ensuring Michigan residents have access to affordable health care remains a core priority for the Michigan Department of Health and Human Services,” Sutfin stated over email. “Starting in January 2027, Healthy Michigan Plan (HMP) beneficiaries will be subject to new federal work requirements included in H.R.1.” 

She noted that “awareness notices” are being mailed to HMP (Michigan’s Medicaid expansion program) enrollees now, and formal notices will follow in September 2026.

Sutfin added that, in cooperation with the Centers for Medicaid and Medicare Services (CMS), “text messages and emails from CMS are going out this month to those who have opted in to electronic communications from MDHHS. These messages will provide early awareness about work requirements and will point beneficiaries back to CMS and state resources.”

East Village Magazine also asked Sutfin how the increased reporting requirements for Medicaid recipients will play into the situation ahead for MDHHS and HMP recipients.

“We’re anticipating 200,000 people will lose Medicaid coverage in Michigan over the next few years once work requirements, more frequent redeterminations and eligibility changes are fully implemented by H.R. 1,” she wrote back, adding that MDHHS is expanding staffing to meet the needs around more frequent redeterminations and new compliance requirements.

Ultimately, Sutfin offered: “Our focus is on reducing barriers for beneficiaries, maintaining program integrity and helping eligible individuals stay covered.”

Editor’s Note: This article first appeared in East Village Magazine’s August 2026 print edition.