CMS Ignores the Law (Again) – This Time Taking Health Insurance Away from Individuals with Substance Use Disorders, Mental Health Conditions, and Serious Health Conditions

June 18, 2026 - 17:42

Just weeks after facing criticism for exceeding its legal authority on state directed payments, the Centers for Medicare and Medicaid Services is under fire again. This time, a new interim final rule on work reporting requirements is being accused of stripping health insurance from people with substance use disorders, mental health conditions, and other serious medical issues.

Critics argue the rule goes far beyond what Congress intended. The regulation imposes strict work reporting mandates that, in practice, create insurmountable barriers for individuals managing chronic or debilitating conditions. For someone in recovery from addiction or undergoing intensive mental health treatment, meeting rigid paperwork deadlines and employment verification rules can be nearly impossible.

The result, opponents say, is that thousands of vulnerable Americans will lose their coverage not because they refused to work, but because they are too sick to navigate a complex bureaucratic system. The rule does not adequately account for the reality of intermittent illness, treatment schedules, or the cognitive challenges that often accompany serious health conditions.

Legal experts and advocacy groups are now questioning whether CMS has the statutory authority to impose such sweeping requirements. They point to the text of H.R. 1, arguing that the new rule twists the law's intent. The agency is being accused of using administrative action to achieve policy goals that Congress explicitly chose not to include in the legislation.

The controversy highlights a growing pattern of tension between CMS and healthcare advocates. With the interim final rule now in effect, the battle is likely to shift to the courts, where the agency's interpretation of its own powers will face a serious test. For the millions of Americans with mental health and addiction disorders, the stakes could not be higher.