diff --git a/changelog.d/8573.added.md b/changelog.d/8573.added.md
new file mode 100644
index 00000000000..08b08c7f813
--- /dev/null
+++ b/changelog.d/8573.added.md
@@ -0,0 +1 @@
+Added a medically frail or special medical needs input for Medicaid community engagement exclusions.
diff --git a/policyengine_us/tests/policy/baseline/gov/hhs/medicaid/eligibility/medicaid_work_requirement_eligible.yaml b/policyengine_us/tests/policy/baseline/gov/hhs/medicaid/eligibility/medicaid_work_requirement_eligible.yaml
index bb0c8633d26..26fa290a5b3 100644
--- a/policyengine_us/tests/policy/baseline/gov/hhs/medicaid/eligibility/medicaid_work_requirement_eligible.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/hhs/medicaid/eligibility/medicaid_work_requirement_eligible.yaml
@@ -222,3 +222,25 @@
     medicaid_community_engagement_pass_through_eligible: false
   output:
     medicaid_work_requirement_eligible: false
+
+- name: Case 25, medically frail adult is excluded from Medicaid community engagement.
+  period: 2027
+  input:
+    age: 30
+    monthly_hours_worked: 0
+    is_disabled: false
+    is_medically_frail_or_has_special_medical_needs_for_medicaid_ce: true
+    medicaid_community_engagement_pass_through_eligible: false
+  output:
+    medicaid_work_requirement_eligible: true
+
+- name: Case 26, adult remains ineligible without the medically frail exclusion.
+  period: 2027
+  input:
+    age: 30
+    monthly_hours_worked: 0
+    is_disabled: false
+    is_medically_frail_or_has_special_medical_needs_for_medicaid_ce: false
+    medicaid_community_engagement_pass_through_eligible: false
+  output:
+    medicaid_work_requirement_eligible: false
diff --git a/policyengine_us/variables/gov/hhs/medicaid/eligibility/is_medically_frail_or_has_special_medical_needs_for_medicaid_ce.py b/policyengine_us/variables/gov/hhs/medicaid/eligibility/is_medically_frail_or_has_special_medical_needs_for_medicaid_ce.py
new file mode 100644
index 00000000000..cb6f2e4b0bd
--- /dev/null
+++ b/policyengine_us/variables/gov/hhs/medicaid/eligibility/is_medically_frail_or_has_special_medical_needs_for_medicaid_ce.py
@@ -0,0 +1,24 @@
+from policyengine_us.model_api import *
+
+
+class is_medically_frail_or_has_special_medical_needs_for_medicaid_ce(Variable):
+    value_type = bool
+    entity = Person
+    label = (
+        "Medically frail or has special medical needs for Medicaid community engagement"
+    )
+    documentation = (
+        "Whether this person qualifies for the Medicaid community engagement "
+        "medically frail or special medical needs exclusion. The full CMS "
+        "definition depends on state condition lists and case review, so this "
+        "input lets household situations represent people not captured by "
+        "narrower disability variables."
+    )
+    definition_period = YEAR
+    default_value = False
+    reference = (
+        "https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf#page=242",
+        "https://www.medicaid.gov/federal-policy-guidance/downloads/cib12082025.pdf",
+        "https://www.govinfo.gov/content/pkg/FR-2026-06-03/pdf/2026-11094.pdf#page=125",
+        "https://www.govinfo.gov/content/pkg/FR-2026-06-03/pdf/2026-11094.pdf#page=59",
+    )
diff --git a/policyengine_us/variables/gov/hhs/medicaid/eligibility/medicaid_work_requirement_eligible.py b/policyengine_us/variables/gov/hhs/medicaid/eligibility/medicaid_work_requirement_eligible.py
index f55dfdc40d6..b787dcbeaac 100644
--- a/policyengine_us/variables/gov/hhs/medicaid/eligibility/medicaid_work_requirement_eligible.py
+++ b/policyengine_us/variables/gov/hhs/medicaid/eligibility/medicaid_work_requirement_eligible.py
@@ -64,6 +64,10 @@ def formula(person, period, parameters):
         is_blind = person("is_blind", period)
         is_incapable_of_self_care = person("is_incapable_of_self_care", period)
         eligible_disabled = is_blind | is_disabled | is_incapable_of_self_care
+        medically_frail = person(
+            "is_medically_frail_or_has_special_medical_needs_for_medicaid_ce",
+            period,
+        )
         # Current and recent incarceration exclusions/exceptions.
         is_incarcerated = person("is_incarcerated", period)
         was_recently_incarcerated = person(
@@ -85,6 +89,7 @@ def formula(person, period, parameters):
             | has_disabled
             | eligible_veteran
             | eligible_disabled
+            | medically_frail
             | is_incarcerated
             | was_recently_incarcerated
         )