A federal appeals court has opened the door for the Trump administration to enforce a contested provision of its sweeping tax and domestic policy law that strips Medicaid funding from Planned Parenthood clinics in much of the country.
In a decision issued Tuesday, a three-judge panel of the Boston-based 1st U.S. Circuit Court of Appeals temporarily lifted a lower-court order that had blocked the measure in 22 states and Washington, D.C. The ruling allows the administration to move forward while the broader legal challenge continues.
At the heart of the dispute is a provision in the “One Big Beautiful Bill Act,” passed by a Republican-controlled Congress. The measure cuts off Medicaid reimbursements to tax-exempt healthcare organizations that provide family planning and reproductive services if they also perform abortions and received more than $800,000 in Medicaid funds during the 2023 fiscal year. In practice, the rule applies almost entirely to Planned Parenthood.
Democratic-led states had challenged the law, arguing it unfairly rewrote the rules after their Medicaid programs were already approved. Earlier this month, a federal judge agreed, finding the states were likely to succeed in showing the provision imposed an unconstitutional retroactive condition on their participation in Medicaid. That ruling halted enforcement—briefly.
The appeals court has now paused that block, signaling that the administration has a strong chance of winning on appeal. The judges said Congress appeared to have acted within its authority and that the law was not as unclear as the states claimed.
California’s attorney general, who helped lead the multistate challenge alongside officials from Connecticut and New York, called the latest decision a setback but said efforts would continue to protect access to healthcare for low-income residents.
Planned Parenthood has argued the law was crafted with the organization squarely in mind and says the funding cutoff has already contributed to the closure of at least 20 health centers since the legislation was signed into law in July. The organization did not comment on Tuesday’s ruling.
While the case moves forward, the decision reshapes the immediate landscape: Medicaid funding restrictions tied to abortion services can now be enforced across much of the country, marking a significant moment in the ongoing battle over reproductive healthcare policy in the United States.
