## Facts

- Texas participates in the federal–state Temporary Assistance for Needy Families (TANF) program and provides Medicaid-related medical assistance to eligible recipients.
- After Texas implemented federal welfare reform requirements, the Texas Workforce Commission (TWC) adopted rules redefining TANF “work activities.”
- The rules treated “job-search and job-readiness assistance” as including requirements that recipients: (a) ensure their children’s health and dental checkups, (b) ensure children’s immunizations, (c) ensure children’s school attendance, and (d) avoid illicit substance use.
- Under the rules, failure to satisfy these conditions could result in termination of medical cash assistance tied to TANF/Medicaid eligibility.
- Soila Camacho and other plaintiffs challenged the rules as inconsistent with, and therefore preempted by, the federal Medicaid Act.
- Plaintiffs sued state agencies in Texas state court seeking to stop enforcement; defendants removed to federal court.
- The district court granted a preliminary injunction and later entered declaratory judgment preventing termination of assistance based on the challenged redefinition.
- Defendants appealed the declaratory judgment to the Fifth Circuit.

## Issues

1. Whether Texas’s administrative rules redefining TANF “work activities” to include child-health, school-attendance, and substance-avoidance conditions are inconsistent with and preempted by the federal Medicaid Act.
2. Whether Texas may terminate Medicaid-related medical assistance based on failure to satisfy those newly defined “work” conditions.

## Decision

- The Fifth Circuit affirmed the district court’s declaratory judgment.
- The court held the challenged TWC rules were inconsistent with and therefore preempted by the federal Medicaid Act.
- Texas could not terminate Medicaid-related medical assistance based on the rules’ nonemployment conditions labeled as TANF “work activities.”

## Legal Principles

- State statutes and agency rules are preempted when they conflict with federal law by obstructing Congress’s objectives (conflict preemption).
- States administering Medicaid must comply with the Medicaid Act’s eligibility and coverage requirements and may not impose additional conditions that effectively restrict or terminate medical assistance beyond what federal law authorizes.
- A state may not reclassify nonwork behavioral or child-related conditions as TANF “work activities” to trigger sanctions affecting Medicaid-related assistance when that reclassification conflicts with the federal Medicaid scheme.

## Conclusion

The Fifth Circuit upheld declaratory relief invalidating Texas rules that expanded TANF “work activities” to include child health, school attendance, and substance-avoidance conditions and used noncompliance to terminate Medicaid-related medical assistance, because the rules conflicted with and were preempted by the Medicaid Act.


Camacho v. Tex. Workforce Comm’n, 408 F.3d 229 (5th Cir. 2005)