Bloomberg News

Indiana Planned Parenthood Wins Ruling on Medicaid Funds

October 23, 2012

Planned Parenthood of Indiana Inc. won a federal appeals court decision that prevents the state from cutting its Medicaid funding because the group provides abortions.

The U.S. Court of Appeals in Chicago, upholding a lower- court injunction, said the organization was likely to prevail on its claim that the state can’t cut off funding it’s otherwise entitled to solely because of the group’s abortion services.

Governor Mitch Daniels, a Republican, last year signed legislation that bars state agencies from contracts or grants involving any entity that performs abortions or maintains facilities where they’re performed.

“The defunding law excludes Planned Parenthood from Medicaid for a reason unrelated to its fitness to provide medical services, violating its patients’ statutory right to obtain medical care from the qualified provider of their choice,” U.S. Circuit Judge Diane Sykes wrote for the three- judge panel.

Today’s decision upholds part of a 2011 order by U.S. District Judge Tanya Walton Pratt in Indianapolis that temporarily barred the state from restricting Planned Parenthood’s Medicaid funding and its access to federal block grant money that Indiana receives to combat sexually transmitted diseases.

The American Civil Liberties Union, representing Planned Parenthood in the case, said the decision would enable thousands of Indiana residents to receive needed medical care.

Abortion Services

“Without the injunction, HEA 1210 -- the law passed by the Indiana General Assembly in 2011 -- would have prohibited Medicaid funds from going to any entity that offered abortions, even though the Medicaid funds go to necessary reproductive health services and do not support abortion services,” the ACLU said in a statement.

A federal law known as the Hyde Amendment prohibits direct funding by the government of most abortions. Indiana has a similar state funding ban, according to the appeals court.

Indiana Attorney Greg Zoeller said in a statement that his office was reviewing the court’s 49-page ruling.

“The people’s elected representatives in the Legislature decided they did not want an indirect subsidy of abortion services such as payroll and overhead to be paid with taxpayer’s dollars and so crafted this law,” Zoeller said.

Legal Authority

“Although the injunction concerning Medicaid funding was not lifted, we note that the 7th Circuit found the state has the legal authority to decide how federal block-grant dollars -- which are tax dollars -- will be distributed,” Zoeller said in the statement, referring to the appeals court.

Two of the three appellate judges found Planned Parenthood wasn’t likely to succeed on the block-grant claim because the statutes governing those block grants are different from the Medicaid law.

Planned Parenthood had received $150,000 in grant money from the Disease Intervention Services program, according to today’s decision.

U.S. Circuit Judge Richard Cudahy dissented from the block- grant portion of the ruling, arguing the lower-court record on the issue wasn’t fully developed and that the appellate ruling on the issue was premature.

The case is Planned Parenthood of Indiana Inc. v. Commissioner of the Indiana State Department of Health, 11-2464, U.S. Court of Appeals for the Seventh Circuit (Chicago).

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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