Litigation Challenges 2025 Budget Reconciliation Medicaid Block on Planned Parenthood

legal Challenges to the 2025 Federal Budget Reconciliation Law’s Restrictions on Reproductive Healthcare Funding

Introduction

One of the immediate impacts of the 2025 Federal Budget Reconciliation Law is a provision,Section 71113,that blocks certain reproductive health care providers (who also provide abortions) from receiving federal Medicaid reimbursement for one year. the law impacts three organizations: (1) Planned Parenthood; (2) Maine Family Planning, a network of clinics in Maine, (3) and Health Imperatives, a network of specialized reproductive health clinics based in Massachusetts. Shortly after President Trump signed the law, Planned Parenthood, Maine Family Planning (legally known as the Family Planning Association of Maine), and 22 states and the District of Columbia filed separate legal challenges to prevent the implementation of Section 71113.One of the key issues in the litigation is whether Congress acted rationally to reach its policy goal of reducing the number of abortions across the country or whether they unlawfully targeted Planned parenthood. This brief provides an overview of these legal challenges and summarizes the key positions of the plaintiffs and the defendants, Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS).

Background

The 2025 Federal Budget Reconciliation Law is not the frist instance of federal policy targeting funding for abortion and abortion providers. Blocking coverage of abortion under Medicaid and limiting abortion access has been a priority for abortion opponents since soon after Roe v. wade granted individuals the right to an abortion. As 1977, Congress has included the Hyde Amendment every year as a rider to the federal appropriations budget prohibiting federal funds for abortion except in situations where the pregnancy is the result of rape or incest, or the pregnant person’s life is at risk. Federal medicaid dollars may only reimburse abortion providers in these very limited situations. Some states make their own funds available to pay for abortion in other circumstances for their Medicaid enrollees. Yet, despite this longstanding provision, abortion opponents at the state and federal level have advocated going further in restricting federal funding. They argue that by allowing providers that also offer abortion services to remain in the Medicaid program, federal funds that go to these providers for other services indirectly subsidize abortion services with federal Medicaid dollars. While federal policy blocks funding for abortions under most circumstances,federal law mandates the coverage of

Challenges to Section 71113 of the 2025 Federal Budget Reconciliation law

Section 71113 of the 2025 Federal Budget reconciliation Law has sparked legal challenges due to its restrictions on Medicaid funding for certain reproductive health providers.Specifically, entities are designated as “prohibited” from receiving federal Medicaid funds if they:

* Are considered essential community providers under the Affordable Care Act primarily engaged in family planning services or reproductive health services;
* Provide abortions outside of the Hyde Amendment exceptions (rape, incest, or life endangerment); and
* Received more than $800,000 or more in Medicaid payments in 2023.

Who is Challenging Section 71113?

Planned Parenthood, Maine Family Planning, and 22 states and the District of Columbia (CA, NY, CT, CO, DE, HI, IL, ME, MD, MA, MI, MN, NV, NJ, NM, NC, OR, the Governor of PA, RI, VT, WA, WI and the District of Columbia) have filed separate legal challenges, arguing that Section 71113 violates the United States Constitution.

Plaintiffs contend that restricting Medicaid funding would harm affected organizations and increase costs for states. They also argue it would decrease access to reproductive health care – including contraception, STI testing and treatment, pregnancy testing, cancer screening, and other preventive services – for millions of Medicaid enrollees. While Health Imperatives in massachusetts has not filed a lawsuit, Massachusetts is among the states challenging the law.

The provision blocks federal Medicaid funding for one year starting July 4, 2025, but designates entities as “prohibited” only if they meet the criteria on October 1, 2025.

Status of Cases Challenging Section 71113

Currently, Section 71113 is in effect, blocking the three identified entities from receiving federal Medicaid reimbursement. However, enforceability has varied throughout ongoing litigation.

Initially, a district court granted a preliminary injunction on July 21, 2025, for ten Planned Parenthood affiliates that did not individually meet the criteria. This was extended to all Planned Parenthood affiliates on July 28,2025.

However, on September 11, 2025, the First circuit Court of Appeals reversed the district court ruling, pausing the preliminary injunction. This effectively blocked Planned Parenthood sites nationwide from receiving federal Medicaid funds for services to Medicaid enrollees while the case proceeds.

States can reimburse Planned Parenthood and other affected providers with non-federal dollars, but few have indicated willingness to do so. Maine Family Planning also requested a preliminary injunction, which was denied by the district court, and their appeal is pending before the First Circuit Court of Appeals.

## On What Grounds are the Plaintiffs Suing the Federal Government?

### The heart of the litigation is the constitutionality of Congress’ action of prohibiting payments to certain entities that provide services to Medicaid patients.

While all plaintiffs concede that Congress has the power to dictate spending guidelines for Medicaid funds, the constitutionality of Congress’ actions in enacting Section 71113, and the resulting burden on states is at the heart of this litigation. The Spending Clause in the United States Constitution grants Congress the power to, “lay and collect taxes…and provide for the common defense and general welfare of the United States,”- but this power is not unlimited.All exercises of Congress’ Spending Clause authority are subject to constitutional limitations. These limitations include the requirement that Congress must give clear notice of what actions are required in exchange for federal funds. Further, Congress cannot attach discriminatory conditions to federal funds that would violate other constitutional rights. At issue in this litigation is whether Section 71113 provides clear notice of state’s enforcement obligations, and whether the provision violates Maine Family Planning and Planned Parenthood’s constitutional rights.

### First amendment Claims

The First Amendment of the United States Constitution states that, “congress shall make no law… abridging the freedom of speech…or the right of the people to assemble.” The First Amendment has been interpreted not only to guarantee freedom of speech, but also the right to associate with others. Planned Parenthood and the states contend that Section 71113 unconstitutionally burdens Planned Parenthood’s First Amendment right to freedom of association. The text of section 71113 includes affiliates of an entity that meet the criteria of a prohibited entity. They argue that penalizing Planned Parenthood affiliates that do not independently meet the criteria of section 71113 because they are *associated* with other Planned Parenthood affiliates that are prohibited entities, hinders the affiliates’ ability to freely associate.

Plaintiffs further allege that Section 71113 violates Planned Parenthood’s First Amendment rights because Section 711

planned Parenthood v. State of California: A Legal Battle Over Medicaid Funding

Planned Parenthood Alleges Section 71113 is “Void for Vagueness”

The Due Process Clause of the fifth Amendment to the U.S. Constitution requires that laws be written with sufficient clarity to provide fair notice to individuals about what conduct is prohibited. This has been interpreted to mean that statutes that lack specificity or definiteness can be invalidated as they do not give clear warning of a prohibited action (void for vagueness). Planned Parenthood alleges that Section 71113 does not define essential terms in the statutory text, thus making it void. Planned Parenthood maintains that the words “affiliates, subsidiaries, successors, and clinics,” in the statute are undefined leaving it unclear whether Section 71113 applies to Planned Parenthood affiliates who do not independently meet the provisions criteria. In a November 21, 2025, letter to State Medicaid Directors CMS provided guidance defining the statutory term “affiliate “as “a corporation that is related to another corporation by shareholdings or other means of control; a subsidiary, parent, or sibling corporation.” In the guidance CMS defines “control” as: “the direct or indirect power to govern the management and policies of a person or entity, whether through ownership of voting securities, by contract, or otherwise; the power or authority to manage, direct or oversee.” Planned Parenthood filed a to this guidance in the district court contending that CMS’ definition of affiliate still leaves ambiguity on who is considered an “affiliate,” as of the overbroad terms used in the CMS guidance. Thus,Planned Parenthood continues to allege that Section 71113 is “void for vagueness.”

The Trump Management Contends section 71113 is Constitutional

The Trump administration maintains similar legal arguments in all the lawsuits challenging the constitutionality of Section 71113. The government contends that Section 71113 is a component of duly enacted legislation, and plaintiffs’ attempts to block implementation of this provision seek to override the intentions of Congress. The Trump administration also argues that Congress has broad discretion to tax and spend for the general welfare, which includes the ability to alter federal Medicaid expenditures. The government also states that the parameters for designating entities to be removed from Medicaid reimbursement are not arbitrary and serve a legitimate government purpose. Further, the government rejects plaintiffs’ argument that Section 71113 was enacted due to animus toward plaintiffs. rather, the government offers the choice explanation that Section 71113 was enacted to reduce the number of abortions performed in the United States, a legitimate government interest.

What

Potential Impact of Federal Funding Restrictions on Planned Parenthood and Medicaid Access

Recent legislative actions and court decisions raise concerns about the future of funding for Planned Parenthood and access to reproductive healthcare services for Medicaid recipients. A temporary federal restriction, Section 71113, prohibits Medicaid funding for certain services from July 4, 2025, to July 3, 2026, and the potential for similar measures in the future, coupled with a Supreme Court ruling, could significantly impact healthcare access.

Temporary Federal Funding Restriction: Section 71113

Section 71113, enacted through a reconciliation bill, temporarily blocks federal medicaid payments for services provided by entities deemed capable of performing abortions. this restriction is set to be in effect from July 4, 2025, to July 3, 2026. The impact of this provision has already been felt, with some Planned Parenthood affiliates reporting closures. For example, in Missouri, Planned Parenthood closed three of their 18 sites due to anticipated loss of Medicaid funding.

Supreme Court Ruling and state Authority

The Supreme Court’s decision in Medina v. Planned Parenthood South Atlantic has further complicated the landscape. This ruling grants states greater authority to exclude providers from their Medicaid programs, even if those providers offer services unrelated to abortion. Without federal legislation protecting Planned Parenthood’s participation in Medicaid, more states may choose to exclude the institution and other similar providers from their state Medicaid programs.

legal Challenges and Timeline Concerns

While legal challenges to Section 71113 are ongoing, the limited timeframe of the restriction presents a challenge. The constitutionality of the section may ultimately be decided by the Supreme Court, but the restriction is scheduled to expire before a final decision is likely to be reached. This creates uncertainty for healthcare providers and patients alike.

State Responses and Future Concerns

Recognizing the potential disruption to care, some states have stepped in to provide temporary financial support to Planned Parenthood and other affected providers. Maine, for instance, has allocated $6 million to support these services, and California has invested over $140 million.

However, the long-term sustainability of this state-level support is uncertain. There is concern that similar funding restrictions could be included in future reconciliation bills, potentially overwhelming states’ ability to compensate for the loss of federal Medicaid payments. Future fiscal challenges and competing budgetary priorities could further limit states’ capacity to provide this crucial support.

Implications for Medicaid Recipients

these developments raise significant concerns about access to essential healthcare services for Medicaid recipients.Planned Parenthood and similar providers offer a wide range of services, including:

* Family Planning: Contraception, STI testing and treatment, and reproductive health counseling.
* preventative Care: Annual wellness exams, cancer screenings, and vaccinations.
* Primary Care: Diagnosis and treatment of common illnesses.

Restricting access to these providers could disproportionately affect low-income individuals and those living in rural areas, who rely heavily on Medicaid for healthcare coverage.

Looking Ahead

The future of Medicaid funding for reproductive healthcare remains uncertain.Continued legal challenges,potential legislative changes,and the evolving political landscape will all play a role in shaping access to care. Ongoing monitoring of these developments and advocacy for policies that protect access to affordable healthcare are crucial to ensuring that all individuals have the ability to receive the care they need.