States Sue HHS Over Medicaid Ban Tied to Abortion Providers

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More than 20 states filed a federal lawsuit on Tuesday against the U.S. Department of Health and Human Services, challenging a provision in former President Donald Trump’s recent tax and spending legislation that blocks certain health care nonprofits from receiving Medicaid reimbursements.

The measure, part of the newly enacted One Big Beautiful Bill Act (OBBA), prohibits health care nonprofits that both provide abortion services and received over $800,000 in federal funding during 2023 from accessing Medicaid funds for one year.

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Though the policy most directly affects Planned Parenthood affiliates, other providers like Maine Family Planning and Health Imperatives in Massachusetts are also expected to lose access to Medicaid reimbursements under the new rule.

The legal challenge is being led by Pennsylvania Governor Josh Shapiro and joined by 21 attorneys general, including New York’s Letitia James and Maine’s Aaron Frey. The coalition is asking the court to declare the provision unconstitutional and to halt its enforcement.

“This is another example of the federal government putting politics ahead of health care, and it will come at a real cost to patients,” James said in a statement. “Targeting Planned Parenthood in this way is not only unlawful, it jeopardizes essential health care access for millions. New York will not stand by and allow this attack on reproductive rights to go unchallenged.”

The Hyde Amendment, in place since the 1970s, already restricts federal funding from covering abortion procedures except in cases of rape, incest, or where the life of the pregnant person is at risk. But critics of the OBBA provision argue that it goes further, penalizing organizations simply because they offer abortion services, even if those services aren’t covered by federal funds.

According to the lawsuit, the measure could deny low-income Americans access to critical services such as STI testing, cancer screenings, and contraception. Plaintiffs also argue that the provision unfairly burdens states financially.

Because Medicaid is jointly funded by federal and state governments, stripping federal support from organizations like Planned Parenthood means state governments may need to absorb the full cost to keep clinics open. Without that support, many clinics could be forced to close, potentially weakening broader health care systems and increasing long-term costs due to delayed or inaccessible care.

This lawsuit is the latest development in an ongoing legal battle following Trump’s signing of the OBBA earlier this month. Planned Parenthood filed its own lawsuit shortly after the law took effect, arguing that the policy unlawfully targets the organization for its advocacy and services. A federal judge granted a temporary injunction in that case, which remains in effect.

The Department of Health and Human Services defended the provision, with spokesperson Andrew Nixon saying, “States shouldn’t be required to fund organizations that put political activism ahead of patient care. It’s unfortunate that these attorneys general are choosing to challenge basic accountability measures.”

Planned Parenthood, on the other hand, welcomed the effort to overturn the ban.

“Many providers won’t accept Medicaid patients — but Planned Parenthood does,” said Nicole Clegg, CEO of Planned Parenthood of Northern New England. “Removing us from the system means people will lose access to basic health services like screenings, contraception, and treatment for infections.”