Texas v. Kennedy: The Federal Government Withdrew From Community Integration. Here's What That Means for North Dakota.
On September 23, a federal court in Texas approved a settlement in Texas v. Kennedy between the federal government, Texas, and four other states. The order removes community integration protections from the federal Section 504 rules and applies nationwide.
The federal government did not lose this case. It chose not to defend these protections and agreed to remove them.
What the ruling does
Section 504 of the Rehabilitation Act bars disability discrimination in programs that receive federal money. Since 1977, the federal rules for Section 504 have said services must be provided in the most integrated setting appropriate. That meant people with disabilities have the right to live and get services in their own homes and communities, not in institutions, when that is appropriate for them.
That language is now gone from the Department of Health and Human Services rules.
This comes three months after a Department of Justice opinion argued that states were never required to provide community-based care. The two agencies responsible for enforcing these rights have now both stepped back.
What this means: the bad
Rules are how rights get enforced. Without the rules, the federal agency that oversees Medicaid-funded services has less to hold states accountable to.
The timing matters. States are facing the largest Medicaid cuts in the program's history. Home and community-based services are optional under federal law, and states look there first when budgets get tight. Until now, federal integration rules helped push back against cuts that would move people toward institutions. That pressure is weaker now.
Moving people out of community services doesn't save money. Nationally, Medicaid spent an average of $145,306 per person in 2020 to support someone with an intellectual or developmental disability in an institution, compared with $49,723 per person for home and community-based services. Community services cost about a third as much, and they let people live, work, and take part in their own communities.
Families who believe their rights have been violated may have fewer places to turn for help.
What this means: what still holds
Section 504 itself has not changed. Congress passed it, and only Congress can change it.
The rest of the 2024 Section 504 rule still stands, and so do other agencies' disability rights rules. Decades of court decisions still require states to provide services in the most integrated setting appropriate and to prevent unnecessary institutionalization. People with disabilities can still go to court to enforce those rights. For North Dakota families, nothing about your services changes today.
What we don't know yet
North Dakota Health and Human Services and Aging Services are still working to carry out the state's 2020 agreement with the Department of Justice. That agreement covers people with physical disabilities who live in or are at risk of entering nursing facilities. We don't know how this ruling will affect that work. For example, the state could face questions about whether it must continue certain community programs or meet past commitments. As it plans budgets, the state may consider shifting resources or changing how it offers services in response to the loss of federal enforcement. We also don't know how the state will weigh this ruling as it builds its next budget, or whether other federal agencies will follow.
Those are the questions we are working to answer.
What The Arc of North Dakota is doing
We are monitoring this with The Arc of the United States and national disability rights partners, who are tracking the legal and federal side.
We have reached out to Governor Armstrong's office to discuss North Dakota's continued pledge to services in the most integrated setting. North Dakota has already made that commitment, most recently in its updated Olmstead Plan in May 2026. We want to hear the state say it plainly.
What we will do
We will track any change in how North Dakota delivers home and community-based services. We will carry this issue into the 2027 legislative session and watch for budget and policy decisions that move services away from communities. We also encourage families to get involved, whether by speaking up, sharing your stories, or joining our local chapters' advocacy events. Your experiences and voices strengthen our work and help ensure the needs of people with disabilities remain front and center. We'll share what we learn here, as we learn it.
The federal government has stepped back. North Dakota does not have to.
Read the joint statement from The Arc of the United States and national partners: https://tinyurl.com/muywrxbn
Read our June letter to the congressional delegation: https://www.arcofnd.org/post/an-open-letter-to-north-dakota-s-congressional-delegation-don-t-let-our-neighbors-with-disabilities
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