AG Jackson sues federal agencies over Medicaid rule threatening coverage for cancer patients

Attorney General Jeff Jackson has sued the Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of Health and Human Services over a new federal rule his office says puts tens of thousands of North Carolinians with cancer and other severe illnesses at risk of losing Medicaid coverage while still in treatment, according to the North Carolina Department of Justice.

When Congress passed H.R. 1, the One Big Beautiful Bill Act, it added new work requirements for people with Medicaid expansion coverage, but it also created a specific protection for medically frail individuals, including those with cancer, muscular dystrophy, cystic fibrosis, hemophilia and Parkinson’s, the AG’s office said. On June 1, CMS adopted a narrower definition of “medically frail” that Jackson’s office alleges violates the protection Congress created.

“This is cruel and illegal,” Jackson said. “The sickest people in North Carolina – people with late-stage cancer and life-threatening illnesses – are being put at risk of losing healthcare while they are still in treatment. Congress passed a law to protect these patients specifically. Then the Medicaid agency broke that law and put these patients back at risk. We’re going to court to defend the law and these patients.”

DeAnna Brandon, a North Carolinian being treated for blood cancer, said chemotherapy has affected her memory. “Now, I’m afraid I could lose Medicaid coverage because I accidentally missed paperwork,” she said. “Even though I’m still eligible. Forgetfulness is not fraud.”

NC Health and Human Services Secretary Dev Sangvai said the agency’s priority is “to ensure eligible North Carolinians get and keep vital health care coverage they need to live healthy, productive lives,” adding that the current federal guidance “creates a barrier to care for some of the most vulnerable people in our state.”

According to the AG’s office, roughly 15 percent of adults covered by Medicaid expansion nationwide are too sick to work, meaning the rule could affect tens of thousands of North Carolina’s sickest Medicaid recipients at minimum, and nearly 100,000 at maximum.

The lawsuit alleges CMS violated the U.S. Constitution’s spending clause and the Administrative Procedure Act, and asks the court to permanently block CMS from implementing the new “medically frail” definition. Jackson is joined in the suit by attorneys general from 22 other states and the District of Columbia, along with the governors of Kentucky and Pennsylvania, the AG’s office said.