Planned Parenthood funding creates dilemma for Obama administration

WASHINGTON — Indiana's move to cut off federal funding to Planned Parenthood clinics has not only created a national abortion controversy but also poses a dilemma for the Obama administration.

While the state's action appears to violate the Medicaid Act, federal officials have few obvious remedies other than to cut off money that pays for health care for low-income women.

The controversy focuses on abortion even though the federal law says Medicaid money can't be used to pay for the procedure. Indiana Republicans, however, say paying for medical services provided by a Planned Parenthood clinic supports the facility and indirectly subsidizes abortion.

Indiana Gov. Mitch Daniels, a possible Republican contender for the White House, set the stage for a legal and political clash with the administration last week when he announced he will sign legislation requiring the funding cutoff for Planned Parenthood. An "overwhelming majority of Hoosiers" are opposed in principle to any use of "tax dollars to support abortion," he said.

But the federal Medicaid Act, which pays for care for patients who are poor, says these persons may choose any provider who is "qualified" and "willing" to provide a service. In many states, Planned Parenthood clinics provide basic health care and medical tests for low-income women.

Still, federal money flows through the states. And Indiana as early as Friday will become the first to bar funding for "any entity that performs abortions or maintains or operates a facility where abortions are performed."

The measure targets 28 clinics run by Planned Parenthood in Indiana, four of which offer abortions, according to Betty Cockrum, the group's president.

U.S. health officials have been pondering how to respond.

"If the state denies payment to these providers, that would be illegal," said Mary Kahn, a spokeswoman for the Centers for Medicare and Medicaid Services, the U.S. agency that administers the two huge health-care programs. "There are some options available to us, but I can't say what action will be taken to bring the state into compliance. All we can say now is we will review the matter once Indiana decides."

The long-standing assumption has been that the federal government and the states would work together to provide health care for poor patients, said George Washington University law professor Sara Rosenbaum. She said she has never seen a situation quite like this.

Past disputes arose over whether to cut off funding to nursing homes or clinics because of questions about the quality of their care. "This is radically different," Rosenbaum said. "This is about the exclusion of a qualified provider over something that is unrelated to Medicaid. But the secretary [of Health and Human Resources] doesn't have an obvious remedy other than a total cutoff of federal funds."

House Republicans, led by Rep. Mike Pence, R-Ind., voted in February to cut off all federal funding to Planned Parenthood. Senate Democrats and President Obama blocked that bill from becoming law. But GOP-led states could achieve the same goal partly by following Indiana's lead.

"I expect a lot of states will try to do this," Rosenbaum said.

Daniels, a former budget director for President George W. Bush, has strong support in Republican circles because of his background in overseeing state and federal budgets. He irritated some social conservatives this year when he called for a "truce" on social issues. But his announcement last week that he will sign the Indiana bill into law instantly raised his standing with them.

Lawyers for Planned Parenthood say they quickly will go to federal court seeking an order that stops the Indiana measure. "Our contention is that Indiana can't do this," said Kenneth Falk, an American Civil Liberties Union (ACLU) lawyer in Indianapolis. "Medicaid says patients have a right to choose their health-care provider. Indiana seems to have forgotten this is a federal program."

Cockrum says federal funding provides about $3 million, or about 20 percent, of her group's overall budget of $15 million a year. She argues a cutoff in funds would not only hurt health care for low-income women but also increase the incidence of abortion.

"They are attacking the largest provider of family-planning services," she said. "Nobody does more than we do to reduce the incidence of unintended pregnancies and abortions. If this goes forward, it will cause Indiana to see more abortions, not fewer."

Daniels, however, argued that low-income women will have plenty of options for health care beyond Planned Parenthood.

"I ... can confirm that all nonabortion services, whether family planning or basic women's health, will remain readily available in every one of our 92 counties," he said.