By Jonathan Stempel
Oct 23 (Reuters) - A federal appeals court has blocked
Indiana from enforcing a law to cut off Medicaid funds for
Planned Parenthood, a law that critics said would deprive
thousands of low-income people of medical services.
The 7th U.S. Circuit Court of Appeals on Tuesday ruled that
Indiana had broad authority to exclude unqualified providers
from its Medicaid program for the poor, but could not deny
funding to a class of providers for an unrelated reason -- in
this case, because Planned Parenthood clinics perform abortions.
It said doing so deprives Medicaid recipients of their legal
right to obtain care from qualified providers of their choosing.
"Indiana maintains that any harm to Planned Parenthood's
Medicaid patients is superficial because they have many other
qualified Medicaid providers to choose from," Circuit Judge
Diane Sykes wrote for a three-judge panel. "This argument misses
States cannot use federal funds to pay for most abortions,
and Indiana has a similar ban for state funds. But the 7th
Circuit said Indiana went farther by banning abortion services
providers from using state-administered funds on other services.
While the 7th Circuit decision applies in Illinois, Indiana
and Wisconsin, it could have wider significance.
Lawmakers in more than a dozen U.S. states have in the last
few years taken steps to cut off funding for Planned Parenthood,
prompting it to file several lawsuits.
Planned Parenthood is the country's largest provider of
abortions, conducting about one-fourth of those performed in the
United States. Last year, Republicans unsuccessfully tried to
end federal funding for Planned Parenthood.
Indiana Governor Mitch Daniels, a Republican, had signed the
law banning funding in May 2011, but U.S. District Judge Tanya
Walton Pratt in Indianapolis put it on hold the following month.
Tuesday's decision upheld much of Pratt's preliminary
injunction and returned the case to her court.
Indiana Attorney General Greg Zoeller said his office, which
argued the state's appeal, will review the decision before
deciding how best to continue defending the law.
"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
taxpayers' dollars," Zoeller said in a statement.
In court papers, Planned Parenthood had said that the loss
of Medicaid funding in Indiana would force it to close seven of
its 28 health centers in that state, forcing nearly 21,000
patients to look elsewhere for medical care.
Dawn Laguens, executive vice president of the Planned
Parenthood Action Fund, said in a statement that denying funding
for basic health care services was "badly out of touch with the
needs of American women and families."
The federal government had supported Planned Parenthood's
appeal. Medicaid is jointly funded by the federal and state
"This is a total victory," said Ken Falk, legal director for
the American Civil Liberties Union of Indiana, which handled
Planned Parenthood's appeal.
"It is significant because, around the country, there are
hundreds of thousands of people who get services through Planned
Parenthood that are reimbursed by Medicaid," he said. "To allow
those services to be denied solely because a state does not like
other things that Planned Parenthood does can cause serious harm
to people who depend on it for basic medical needs."
Among Planned Parenthood's other services are cancer and HIV
screenings, contraception and family planning. Three percent of
its services relate to abortion, according to its website.
Half of Planned Parenthood's $970 million of revenue in the
year ended June 30, 2010 came from government health services
grants and reimbursements, its annual report shows. It said it
performed more than 329,000 abortion procedures that year.
The case is Planned Parenthood of Indiana Inc et al v.
Commissioner of the Indiana State Department of Health et al,
7th U.S. Circuit Court of Appeals, No. 11-2464.
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