A federal appeals court on Thursday allowed the federal government to cut off Medicaid funding to Planned Parenthood, suspending a major source of the organization’s income while litigation in the case continues.
The ruling, overturning a lower court’s order, extended a standoff instigated by President Trump and his Republican allies in Congress this summer, when they imposed a one-year ban on state Medicaid payments to the organization as part of the president’s major tax and domestic policy bill.
Federal law already prohibited federal Medicaid funds from paying for abortions, but the new measure targets an array of other services Planned Parenthood provides, including primary care. The unanimous vote by Judges Gustavo A. Gelpí, Lara E. Montecalvo and Seth R. Aframe — all appointed by President Joseph R. Biden Jr. — will now allow federal Medicaid reimbursements for those other services to be withheld.
The judges’ two-page order offered no reasoning or indication of their views on the legal merits of the case, and federal dollars may only be withheld briefly.
But the pause nonetheless amounted to a significant financial setback for Planned Parenthood, which has relied heavily on government reimbursements for medical services. In past years, more than 40 percent of its revenue has come from government reimbursements and grants disbursed by the Department of Health and Human Services.
Shortly after the bill was signed into law on July 4, Planned Parenthood sued to block the provision, which its lawyers noted applied narrowly to organizations that both provide abortion services and received more than $800,000 in federal funding in 2023.
Planned Parenthood argued that the highly specific conditions appeared designed to target only a handful of the largest abortion providers, exerting financial pressure that could force them to reconsider providing abortion services.
Because of the organization’s unique structure as both a health care nonprofit and a political entity with an advocacy arm, lawyers also argued that by jeopardizing its funding, the bill effectively curtailed its freedom of speech.
In July, Judge Indira Talwani of the Federal District Court in Massachusetts sided with Planned Parenthood in the case, saying that the provision, if allowed to take effect, would harm scores of patients who rely on its clinics for services, including family planning and testing for sexually transmitted infections.
Facing many of the same questions as Judge Talwani, another federal judge in August declined to block the government from stripping funding to another abortion provider in Maine under the law.
Zach Montague is a Times reporter covering the federal courts, including the legal disputes over the Trump administration’s agenda.
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