BOSTON — A federal appeals court Tuesday revived Planned Parenthood Medicaid cuts in 22 states and the District of Columbia by putting a judge’s injunction on hold. The move lets the Trump administration keep enforcing the funding restrictions while the states’ lawsuit continues, Dec. 30, 2025.
A three-judge panel of the 1st U.S. Circuit Court of Appeals granted the federal government’s request for a stay pending appeal after a coalition led by California, Connecticut and New York sued to block enforcement, Reuters reported. The lawsuit names the U.S. Department of Health and Human Services and its secretary, Robert F. Kennedy Jr., along with the Centers for Medicare and Medicaid Services and CMS Administrator Dr. Mehmet Oz.
What the Planned Parenthood Medicaid cuts would do
The dispute centers on Section 71113 of the budget reconciliation law President Donald Trump signed July 4, 2025, a provision in what supporters dubbed the “One Big Beautiful Bill Act.” The measure blocks, for one year, the use of federal Medicaid dollars to reimburse “prohibited entities” that meet criteria tied to tax status, the services they provide and a funding threshold, the appeals court’s order said.
Under the law, an entity is “prohibited” if it is a tax-exempt nonprofit that is primarily engaged in family planning and reproductive health care, provides abortions outside narrow exceptions and received more than $800,000 in combined federal and state Medicaid funding in fiscal 2023.
In practice, the panel wrote, the law “applies almost exclusively” to the federation of providers commonly known as Planned Parenthood. Planned Parenthood Medicaid reimbursements generally pay for non-abortion care such as contraception, cancer screenings and testing and treatment for sexually transmitted infections.
Why the ruling reopens the Planned Parenthood Medicaid fight
U.S. District Judge Indira Talwani had blocked enforcement of the provision in the plaintiff states, finding it too unclear and an improper surprise for states already operating under federally approved Medicaid plans. The appeals court said the government made a strong showing it is likely to succeed and stayed Talwani’s injunction while the appeal proceeds.
The policy’s legal status has shifted repeatedly since July as parallel lawsuits moved through federal court, according to KFF’s litigation tracker.
Planned Parenthood says the ban has contributed to at least 20 health center closures since the law was signed. A spokesperson for California Attorney General Rob Bonta called the latest ruling disappointing but said he remained committed to “ensuring vulnerable Californians can access the healthcare they need.”
In the earlier Planned Parenthood case, Planned Parenthood Federation of America President and CEO Alexis McGill Johnson said “the intent is clear: They want to shut down Planned Parenthood health centers,” according to Courthouse News Service.
Continuity with earlier funding fights
Attempts to restrict Planned Parenthood Medicaid payments long predate the 2025 law. In 2017, congressional Republicans proposed a one-year block on Medicaid payments to Planned Parenthood as part of a broader health plan, a move NPR reported would cost the organization hundreds of millions of dollars in reimbursements.
More recently, the Supreme Court ruled in June that Medicaid beneficiaries cannot sue to challenge a state’s decision to exclude Planned Parenthood from Medicaid, a decision that cleared the way for states to cut off Medicaid money to the organization, The Associated Press reported. The current 1st Circuit dispute is different — it tests Congress’ power to bar federal reimbursements — but it lands in the same debate over who controls Medicaid funding and patient access.
For now, Planned Parenthood Medicaid restrictions remain in effect in the plaintiff jurisdictions. The stay does not decide the case on the merits, and the 1st Circuit will consider the states’ appeal while the one-year funding ban continues to run.
