Planned Parenthood Remains in Limbo as Court Reviews Their Request to Block Federal Medicaid Funding Ban

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One provision of the 2025 Budget Reconciliation Law affects Planned Parenthood clinics’ ability to continue to receive federal payments for services provided to Medicaid patients. Specifically, this provision prohibits federal Medicaid payments for one year to nonprofit family planning clinics that provide abortion services and received over $800,000 in Medicaid reimbursements in 2023. (State and federal governments jointly fund Medicaid.) The law prohibits federal Medicaid funding to any entity that meets these criteria, as well as that entity’s affiliates, subsidiaries, successors, and clinics. This narrow classification includes only Planned Parenthood, Maine Family Planning Services and Health Imperatives. After President Trump signed the law, Planned Parenthood and Maine Family Planning challenged this funding ban in separate lawsuits.

In the Planned Parenthood case, a federal judge in Massachusetts initially granted a Temporary Restraining Order (TRO), which enabled Planned Parenthood clinics to continue to receive federal funding for services provided to Medicaid enrollees. On July 21, 2025, on the evening that the TRO was set to expire, in an unusual move, the federal district court issued a partial preliminary injunction, blocking the enforcement of the law for ten Planned Parenthood members that do not provide abortion services or do not meet the minimum Medicaid revenue threshold of $800,000. The Trump administration’s Health and Human Services is appealing this decision to the First Circuit Court of Appeals. At the same time, the district court is continuing to review Planned Parenthood’s request for a preliminary injunction for the remaining 37 members that do individually meet the criteria of a prohibited entity under the federal law.

One part of Planned Parenthood’s challenge is a claim that excluding Planned Parenthood members based on their association with the national organization violates their First Amendment rights. The district court agreed with the plaintiffs on this claim. It granted a preliminary injunction for the ten Planned Parenthood members that either do not provide abortion care or did not receive $800,000 or more from Medicaid revenue in 2023.

Planned Parenthood has also challenged the law based on a violation of other Constitutional protections. Planned Parenthood contends that the law targets them and does not prohibit other for-profit entities or providers that are not “essential community providers” from receiving federal Medicaid funds.  The district court is still reviewing Planned Parenthood’s request for a preliminary injunction, which would block the federal government’s enforcement of the Medicaid funding ban against all Planned Parenthood members, including those that provide abortion and received $800,000 or more from Medicaid reimbursements in 2023. It’s not known when the court will issue an order on Planned Parenthood’s request for a more extensive preliminary injunction.

Meanwhile, the majority of Planned Parenthood clinics will not be able to receive federal Medicaid funding for non-abortion services, such as contraceptive care, STI screening and treatment and other preventive care, provided to Medicaid patients.