New barriers could lead to hundreds of thousands losing coverage

Attorney General Dan Rayfield today filed a legal challenge to the Trump administration’s plans to implement changes to Medicaid that create new barriers to receiving health insurance through the Oregon Health Plan(Opens in a new tab/window). Strict new requirements force more than a half million Oregonians to fill out onerous paperwork on a regular basis to prove they’re working, in school, or volunteering to keep their health insurance.

In states where these policies have been implemented, thousands of people have lost health coverage—not because they don’t qualify, but because they can’t keep up with the needless red tape.

“It would be the height of bureaucratic cruelty to rip away someone’s life-saving health care just because of unreasonable paperwork,” said Attorney General Rayfield. “And yet, that’s exactly what Trump’s bill does. This is an unconstitutional action by the President, and we will take the steps necessary to stop him—and to protect health care access for thousands upon thousands of Oregonians.”

Medicaid—which is called the Oregon Health Plan in Oregon—is the health care safety net for low-income people. States and the federal government pay for it together, with the federal government covering at least half the cost. More than 1.4 million Oregonians receive health care through the Oregon Health Plan, covering 33% of adult Oregonians and 55% of children (0-17).

The change to Medicaid eligibility was enacted in Trump’s 2025 budget bill, H.R. 1, but implementation does not begin until 2027.

The new requirements apply to the 564,177 Oregonians who are enrolled in the Oregon Health Plan as part of the Affordable Care Act Medicaid expansion. Oregon Health Authority estimates that up to one-third of those members may lose coverage due to the new requirements. In particular, the new requirements will hit rural counties the hardest due to higher Medicaid utilization and higher unemployment rates. The results could include closures of rural health facilities, compounding the harms for many years to come.

The lawsuit argues that Congress and the Trump Administration exceeded their constitutional authority by requiring Oregon to implement these changes. Previously, AG Rayfield blocked implementation of paperwork burdens for seriously ill Oregonians to keep their Oregon Health Plan coverage.

The lawsuit was filed in the U.S. District Court for the District of Oregon in Eugene. Attorneys general from Minnesota, New Mexico, and Washington also joined the lawsuit.