More than 20 states filed a lawsuit Tuesday against the Department of Health and Human Services, challenging a provision in President Trump’s enormous tax and spending package that bars certain health care nonprofits from receiving Medicaid reimbursements.
The One Big Beautiful Bill Act (OBBA) includes a provision that bars health care nonprofits that provide abortions and received more than $800,000 in federal funding in 2023 from being able to get Medicaid reimbursements for one year.
The provision primarily impacts Planned Parenthood affiliates, but at least two other organizations that provide abortion care will also be affected: Maine Family Planning and Health Imperatives in Massachusetts.
The coalition behind the lawsuit includes Pennsylvania Gov. Josh Shapiro, along with 21 attorneys general, such as New York’s Letitia James and Maine’s Aaron Frey. Lawmakers are seeking a court order declaring the OBBA provision unconstitutional and pausing its implementation.
“The federal government is once again playing politics with our health care system, with devastating consequences,” James wrote in a statement.
“The administration’s shameful and illegal targeting of Planned Parenthood will make it harder for millions of people to get the health care they need. New York will not be bullied into enforcing this unconstitutional attack on health care and reproductive freedom.”
Since the 1970s, a federal law called the Hyde Amendment has made it illegal for federal dollars to pay for abortion services with a few exceptions, such as if the pregnancy endangers the life of the pregnant person or was the result of rape or incest.
The attorneys general and Shapiro argue that because of this federal law, the provision will deny low-income Americans access to lifesaving care like cancer screenings and sexually transmitted infection testing and treatment.
Plaintiffs argue that the provision also harms states financially in two ways, according to the lawsuit.
Medicaid is funded by both the federal government and state governments. But now, the financial responsibility for keeping Planned Parenthood clinics open will fall entirely on states.
The lack of federal Medicaid funding will also likely cause Planned Parenthood clinics to close, which will “cripple” medical health care ecosystems and increase long-term medical care costs.
The lawsuit is the latest development in a legal saga following the OBBA’s signing earlier this month.
After Trump signed the OBBA into law, Planned Parenthood sued, arguing that the provision specifically targets the organization’s affiliates for advocating for providing abortion care outside the Medicaid system.
A U.S. district judge granted Planned Parenthood its request for a temporary injunction, which was extended last week.
A spokesperson for the Department of Health and Human Services said states should not be forced to fund organizations that have chosen “political advocacy over patient care.”
“It’s a shame that these Democrat attorneys general seek to undermine state flexibility and disregard longstanding concerns about accountability,” said Andrew Nixon, director of communications at HHS.
Meanwhile, Planned Parenthood lauded the attempt to block the provision.
“Not all healthcare providers accept Medicaid, but Planned Parenthood does,” wrote Nicole Clegg, CEO or Planned Parenthood of Northern New England. “Without us, people will lose access to basic health care like cancer screenings, birth control, and disease testing and treatment.”
