Women's Health Clinic in Winnipeg

A US federal judge has temporarily stopped the Trump administration from enforcing a contested measure that would strip Planned Parenthood affiliates of Medicaid reimbursements, calling the funding restrictions unclear, unlawful and potentially harmful to millions of patients who rely on the organisation for essential care.

The ruling, issued on 2 December 2025, provides preliminary relief to Planned Parenthood, 22 states and the District of Columbia as litigation escalates over whether Congress can impose targeted penalties on providers that offer abortion services outside the Medicaid programme.

Judge Halts Enforcement Of 'Defund Planned Parenthood' Provision

US District Judge Indira Talwani ruled that plaintiffs had shown a substantial likelihood of success in arguing that the law violates the Spending Clause of the US Constitution.

According to the court's memorandum, the statute's definition of 'prohibited entities' and the timing of its funding ban were so ambiguous that states could not have knowingly agreed to the conditions when they entered into Medicaid arrangements.

The injunction prevents federal officials from withholding reimbursements while the case proceeds, reversing an earlier move by the First Circuit Court of Appeals that briefly allowed enforcement.

The court warned that an abrupt cut-off would lead to immediate fiscal pressures, higher emergency room costs, and widespread interruptions to contraceptive and preventive healthcare.

Legal Challenge Says Restriction Targets Planned Parenthood

Planned Parenthood Federation of America, joined by multiple affiliates, sued in July 2025 to challenge Section 71113 of the reconciliation bill, which they claim was deliberately drafted to penalise them for providing abortion services with non-Medicaid funds.

The measure bars federal reimbursement for any clinic receiving more than £560,000 ($800,000) in Medicaid payments in 2023, a threshold that would capture nearly all Planned Parenthood affiliates.

The lawsuit argues the restriction forces states to shoulder new financial burdens while depriving low-income patients of cancer screenings, STI testing, contraception and maternal health services.

Judge Talwani agreed that the language imposed a sweeping and unforeseeable administrative burden on states tasked with policing affiliates' membership and operations.

The court's opinion emphasised that, even where Congress can condition federal funds, those conditions must be unambiguous so that states voluntarily accept the 'contract' of federal support.

States Warn Of 'Scorched-Earth' Impact On Health Systems

Attorneys-general leading the multistate lawsuit welcomed the ruling. California Attorney-General Rob Bonta said the injunction protects critical services for vulnerable residents and prevents 'scorched-earth' costs from cascading through state health systems. New York Attorney-General Letitia James echoed that view, describing the provision as an unlawful effort to make states absorb the federal government's policy choices.

Planned Parenthood said the decision averts imminent clinic closures and preserves access to services for more than a million patients who rely on Medicaid coverage. The organisation has warned throughout 2025 that frozen federal funds, rising overheads and earlier administrative actions placed several clinics at risk of shutting down.

Appeal Expected As Legal Fight Continues

The White House and the Department of Health and Human Services have defended the measure as a legitimate condition on federal spending and are expected to pursue further appeals.

The district court has allowed a brief administrative stay to permit orderly filings but otherwise declined to pause the injunction. With the case likely heading for higher courts, reproductive health groups and state governments are preparing for a prolonged legal battle.

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