More than 20 states have filed a lawsuit against the Department of Health and Human Services, opposing provisions in President Trump’s extensive tax and spending package. These provisions prevent specific healthcare nonprofits from receiving Medicaid reimbursements.
The “One Big Beautiful Bill Act” (OBBA) includes clauses that prohibit healthcare nonprofits—particularly those providing abortions and receiving over $800,000 in federal funding—from obtaining a Medicaid refund for the year 2023.
This mainly impacts affiliates of Planned Parenthood, but at least two other abortion care providers will also feel the effects.
The coalition behind the lawsuit features Pennsylvania Governor Josh Shapiro along with 21 attorneys general, including Letitia James from New York and Aaron Frey from Maine. Their goal is to secure a court ruling that declares the OBBA’s provisions unconstitutional and halts its enforcement.
“The federal government is again meddling in our healthcare system,” said one attorney general in a statement.
“This administration’s shameful and unlawful focus on dismantling planned parent-child relationships hampers millions from accessing necessary healthcare. New York will not stand idly by while facing this unconstitutional assault on health care and reproductive rights.”
Since the 1970s, the Hyde Amendment has barred federal funds from covering abortion services, except in specific cases—like when a pregnancy endangers the mother’s life or in instances of rape or incest.
Both the Attorney General and Shapiro contend that, due to this federal law, the new provision limits access to essential healthcare for low-income Americans, including cancer screenings and treatments for sexually transmitted diseases.
The plaintiffs argue that the provision inflicts financial damage in two ways. For one, Medicaid, which is funded by both state and federal governments, now forces states to shoulder the entire financial burden of keeping Planned Parenthood Clinics operational.
The removal of federal Medicaid funding is likely to lead to the closure of these clinics, which would disrupt healthcare networks and inflate long-term healthcare costs.
This lawsuit marks the latest twist in the ongoing legal battle since the OBBA was enacted earlier this month.
After the OBBA was signed into law, Planned Parenthood filed a lawsuit claiming the provision aims to undermine its affiliates, which advocate for abortion access outside of the Medicaid framework without utilizing federal funds.
A U.S. district judge has granted Planned Parenthood a temporary injunction, which was recently extended.
An HHS spokesperson stated that states should not be compelled to finance organizations that prioritize “political advocacy over patient care.”
“It’s unfortunate that these Democratic attorneys seek to diminish state flexibility and overlook longstanding accountability concerns,” said Andrew Nixon, the HHS communications director.
In contrast, Planned Parenthood has welcomed the effort to block these regulations. Nicole Clegg, CEO of Planned Parenthood in Northern New England, remarked, “While not every healthcare provider accepts Medicaid, Planned Parenthood does. Without our services, individuals would lose access to fundamental care like cancer screenings, birth control, and tests and treatments for diseases.”
