Appeals Court Allows Medicaid Funding Restriction Affecting Planned Parenthood to Move Forward
A significant federal court ruling has reignited debate over healthcare funding, abortion policy, and congressional authority, after an appeals court determined that a provision limiting Medicaid funding for certain Planned Parenthood organizations does not violate the U.S. Constitution. The decision marks an important development in a legal dispute that has unfolded over several months and has already had a noticeable impact on reproductive healthcare providers across the country.
On Friday, the U.S. Court of Appeals for the First Circuit, based in Boston, ruled that a contested portion of former President Donald Trump’s sweeping tax and domestic policy legislation may be enforced. The provision restricts Medicaid funding for nonprofit organizations that provide family planning services if they also perform abortion procedures and meet specific funding thresholds. The appellate court concluded that the measure does not amount to unconstitutional punishment, overturning an earlier decision by a federal district court judge.
Background of the Legal Dispute
The legal battle centers on a section of legislation commonly referred to as the One Big Beautiful Bill Act, a major policy package passed by a Republican-led Congress during Trump’s presidency. Among its many provisions, the law includes language barring Medicaid funds from being allocated to nonprofit healthcare organizations that provide abortion services and received more than $800,000 in Medicaid reimbursements during the 2023 fiscal year.
Planned Parenthood, which operates hundreds of health centers nationwide and provides a wide range of reproductive and general healthcare services, challenged the provision soon after it was signed into law in July. The organization argued that the funding restriction unfairly targeted it based on its provision of abortion services, even though federal law already prohibits the use of Medicaid funds to pay directly for most abortion procedures.
Initial Ruling and Injunction
In July, U.S. District Judge Indira Talwani issued a preliminary injunction blocking enforcement of the provision. Judge Talwani concluded that Planned Parenthood was likely to succeed in its constitutional challenge, finding that the funding restriction could qualify as a “bill of attainder”—a legislative act that punishes a specific group without a judicial trial, which is prohibited under the U.S. Constitution.
Talwani also ruled that the law could infringe on First Amendment rights, particularly for Planned Parenthood affiliates that do not themselves provide abortion services but are associated with the broader organization. She determined that the restriction could unlawfully burden those affiliates’ ability to associate with one another.
Based on these findings, Talwani temporarily halted enforcement of the funding provision while the case proceeded.
Appeals Court Reversal
The Trump administration appealed Talwani’s decision, and while the appeal was under review, the First Circuit allowed the funding restriction to go into effect in September. On Friday, the appellate court formally overturned Talwani’s preliminary injunction, ruling that the law does not constitute unconstitutional punishment.
Writing for a three-judge panel, U.S. Circuit Judge Gustavo Gelpí rejected the argument that the provision amounted to a bill of attainder. Gelpí emphasized that the law does not impose punishment as historically defined under constitutional law.
“The statute does not impose ‘punishment’ in the sense that the Constitution forbids,” Gelpí wrote. Instead, he explained, the law reflects Congress’s authority over federal spending and taxation.
According to the ruling, Congress may lawfully condition the receipt of federal funds on compliance with certain requirements. In this case, the court determined that organizations face a policy choice rather than a penalty: they may either continue providing abortion services without Medicaid funding or continue receiving Medicaid funds by discontinuing those services.
Congressional Authority and Federal Spending
A key element of the court’s reasoning focused on Congress’s broad discretion when it comes to allocating federal funds. Under long-established legal precedent, lawmakers may attach conditions to federal spending, so long as those conditions do not violate other constitutional protections.
The court emphasized that the funding restriction does not criminalize abortion services, nor does it ban organizations from providing them. Instead, it alters eligibility criteria for participation in a federal funding program.
“The law simply uses Congress’s taxing and spending power to place healthcare organizations in a position where they must choose how to operate within the boundaries of federal funding rules,” Gelpí wrote.
This distinction proved central to the court’s conclusion that the provision is not punitive in nature and therefore does not fall under the Constitution’s prohibition on bills of attainder.
First Amendment Claims Rejected
The appellate court also overturned Judge Talwani’s conclusion that the law violated First Amendment associational rights. Talwani had ruled that some Planned Parenthood affiliates—particularly those that do not provide abortion services themselves—could be unfairly impacted by the funding restriction due to their association with the broader organization.
The First Circuit disagreed, narrowly interpreting the law to apply only to affiliates that operate under common corporate control with organizations that perform abortions. By adopting this interpretation, the court found that the provision does not improperly burden the associational rights of entities that are legally distinct from abortion-providing organizations.
As a result, the court determined that the First Amendment challenge was unlikely to succeed.
Ongoing Legal Challenges
Despite the appeals court’s ruling, the legal battle is far from over. In a separate lawsuit filed by 22 Democratic-led states and the District of Columbia, Judge Talwani has again blocked enforcement of the funding provision. That injunction, however, has been temporarily stayed by the First Circuit while it considers whether to lift it permanently.
This means that enforcement of the Medicaid funding restriction remains subject to ongoing judicial review, and the legal landscape may continue to shift in the coming months.
Impact on Healthcare Providers
Planned Parenthood has stated that the funding restriction has already had tangible effects. According to the organization, at least 20 of its health centers have closed since the measure was signed into law in July. These closures, Planned Parenthood officials say, limit access to essential healthcare services such as cancer screenings, contraception, sexually transmitted infection testing, and preventive care—particularly for low-income patients who rely on Medicaid.
Alexis McGill Johnson, president of Planned Parenthood Federation of America, criticized the appeals court’s decision, arguing that it enables restrictions that disproportionately affect vulnerable populations.
“This decision allows the administration to continue efforts that push health centers to the brink financially and reduce access to care for patients who need it most,” Johnson said in a statement following the ruling.
Broader Policy Context
The funding dispute takes place against the backdrop of major shifts in U.S. abortion policy following the Supreme Court’s 2022 decision to overturn the nationwide constitutional right to abortion. Since that ruling, states and the federal government have enacted a wide range of laws addressing abortion access, healthcare funding, and regulatory authority.
The Trump administration argued that Congress acted within its legal authority to restrict Medicaid funding for organizations that provide abortion services, especially in light of the Supreme Court’s ruling. Administration officials maintained that the law reflects a legitimate policy decision rather than an unconstitutional attempt to target a specific organization.
The Medicaid Funding Threshold
A notable feature of the law is its focus on organizations that received more than $800,000 in Medicaid funds during the 2023 fiscal year. Supporters of the provision argue that this threshold ensures the restriction applies only to large organizations with significant federal funding, rather than small clinics or independent providers.
Critics, however, contend that the threshold effectively singles out Planned Parenthood due to its size and scope, reinforcing their argument that the law is designed to target a specific organization rather than regulate funding more broadly.
The appeals court acknowledged this concern but concluded that the funding threshold alone does not render the law unconstitutional.
Legal Definition of Punishment
Central to the court’s analysis was the constitutional definition of “punishment.” Bills of attainder, which are explicitly prohibited by the Constitution, historically involved legislative acts that imposed penalties such as imprisonment, confiscation of property, or death without judicial process.
The First Circuit determined that the funding restriction does not meet this standard. The law does not impose criminal sanctions, civil penalties, or other traditional forms of punishment. Instead, it alters eligibility for a government benefit—Medicaid funding—based on policy criteria established by Congress.
By drawing this distinction, the court reinforced the principle that not all adverse consequences imposed by legislation qualify as unconstitutional punishment.
Implications for Future Legislation
Legal experts say the ruling could influence how courts evaluate future challenges to federal spending restrictions tied to healthcare and social policy. The decision underscores the judiciary’s deference to Congress’s authority over funding decisions, particularly when those decisions involve conditions on voluntary participation in federal programs.
At the same time, the ongoing litigation highlights the limits of that authority, especially when spending conditions intersect with constitutional rights and deeply contested social issues.
A Continuing Debate
The appeals court ruling represents a significant moment in a long-running debate over reproductive healthcare, federal funding, and constitutional law. While supporters view the decision as a reaffirmation of congressional authority, critics argue that it undermines access to essential healthcare services for millions of Americans.
As legal challenges continue and courts weigh competing interpretations of the Constitution, the future of Medicaid funding for organizations like Planned Parenthood remains uncertain. What is clear, however, is that the issue sits at the intersection of law, policy, and public health—an intersection that will continue to generate intense scrutiny and debate.
Conclusion
The First Circuit’s decision to uphold the Medicaid funding restriction marks a pivotal development in the ongoing legal battle surrounding federal healthcare policy. By ruling that the provision does not constitute unconstitutional punishment and does not violate First Amendment rights, the court has allowed a key part of the law to move forward—at least for now.
With additional lawsuits still pending and enforcement subject to further judicial review, the ultimate outcome remains unresolved. Nonetheless, the ruling underscores the enduring tension between congressional authority, constitutional protections, and access to healthcare, a tension that will likely remain at the forefront of legal and political discussions in the years ahead.