In July 2025, Congress passed a major federal spending bill — informally dubbed the One Big Beautiful Bill (OBBB) — that included a controversial provision . Under this provision (Section 71113), certain health-care providers — including affiliates of Planned Parenthood — were barred from receiving federal Medicaid reimbursements for one year beginning immediately.

Supporters of the law argued that Congress has absolute discretion over how taxpayer funds are allocated and that no private organization has a guaranteed entitlement to public money. The restriction was therefore portrayed as a valid legislative choice — not a denial of care per se, but a decision about where federal dollars should flow.

Opponents, however — including Planned Parenthood, some other providers, and a coalition of states — argued this was thinly veiled political targeting. They warned that cutting Medicaid money would not just affect abortion but jeopardize a wide range of essential services: cancer screenings, contraception, STI testing and treatment, and basic preventive or primary care for low-income Americans.

Within days, lawsuits were filed across multiple jurisdictions — aiming to block the enforcement of the defunding provision and protect access to health services for Medicaid beneficiaries.

In early July 2025, soon after the law took effect, a case filed by Planned Parenthood and its member affiliates yielded a preliminary judicial victory: a U.S. District Court — presided by Indira Talwani — issued a preliminary injunction blocking the government from enforcing the funding cut against those plaintiffs.

Talwani’s decision rested on constitutional concerns: the plaintiffs argued the law amounted to an impermissible punishment targeted at a specific group, raising problems under the Bill of Attainder Clause and First Amendment protections of association — because the statute’s criteria effectively singled out Planned Parenthood affiliates.

In the court’s words, cutting off Medicaid funding could disrupt essential health services and inflict “irreparable harm” on patients relying on clinics for preventive and reproductive care.

This decision triggered immediate optimism among supporters of reproductive and community health care, who warned that without the ruling, millions of low-income individuals might lose access to vital services.

But the initial victory was short-lived. On September 11, 2025, a three-judge panel of the First U.S. Circuit Court of Appeals intervened. In a unanimous order, the court stayed the district court’s preliminary injunction — effectively allowing the federal government to resume enforcing the Medicaid funding ban against Planned Parenthood affiliates while litigation continues.

The appellate court’s ruling leaned heavily on a classic constitutional principle: Congress has broad discretion over federal spending. By granting the stay, the court signaled that courts should defer to Congress’s appropriations authority unless challengers clearly show a constitutional violation, and that the bar for halting enforcement at the appeals stage is high.

For supporters of the law, the First Circuit decision was a powerful re-assertion of Congressional supremacy over funding decisions — a vindication of the idea that courts should not second-guess legislative budget priorities. For critics, it was a devastating blow to access, particularly for clinics serving marginalized populations.

Not long after, a coalition of 22 states plus the District of Columbia filed their own lawsuit challenging the same Medicaid funding restriction — this time emphasizing the burden the law placed on states responsible for administering Medicaid and managing provider networks.

On December 2, 2025, Judge Talwani again granted a preliminary injunction — this time preventing enforcement of Section 71113 for those states, arguing that the law’s vague definitions left states without clear guidance on how to determine which providers qualified as “prohibited entities.” The decision described the lack of clarity as imposing a constitutional injury on the states’ administrative responsibilities.

However, that injunction, too, did not survive: the First Circuit promptly issued an administrative stay, restoring the full effect of the Medicaid funding ban while the appeal proceeds.

The repeated pattern — lower-court injunctions followed quickly by appellate reversals — has deepened the sense of instability and uncertainty for clinics, patients, and states alike.

At its core, this is not just a dispute about Medicaid funding — it’s a foundational constitutional battle over who controls the purse strings and where judicial review stops. The First Circuit’s interventions reflect a broad view that courts should respect Congress’s appropriations authority and avoid rewriting budget decisions or imposing their own funding priorities.

Critics invoke the Bill of Attainder Clause, due-process concerns, and First-Amendment protections (associational rights), arguing that the law was written in a way that targets a particular organization — effectively punishing it without individualized trial or conviction.

The debate raises a deeper question: when Congress structures funding conditions that effectively exclude one major provider while leaving others untouched — especially where that provider serves millions of low-income patients — does that run up against constitutional protections intended to prevent arbitrary or politically motivated deprivation of resources?

The repeated litigation and diverging court rulings illustrate how unresolved that question remains. And because reproductive health remains deeply political and polarized, outcomes in this case will likely shape future battles over funding conditions in other contentious policy areas.

With the First Circuit’s stay now in effect, the funding restriction remains temporarily enforceable; many clinics nationwide are unable to bill Medicaid for services, raising alarms about potential clinic closures, reduced access to care, longer patient wait-times, and disrupted preventive care for vulnerable populations.

Yet litigation continues — both the original Planned Parenthood case and the states’ challenge remain active. Depending on how the courts rule (or whether Congress amends the law), the outcome may reshape Medicaid funding policy for years to come. Some possible paths include full invalidation of the funding restriction, a narrow re-interpretation, or even stricter enforcement depending on future rulings.

Beyond the legal wrangling, the case already has real consequences for public health: millions of low-income Americans rely on services such as birth control, STI testing and treatment, cancer screenings, prenatal care, and more — much of which flows through Medicaid-reimbursed clinics.

Finally, the conflict underscores a broader institutional tension: between legislative prerogative over appropriations, judicial review of constitutional rights, and state-level responsibility for administering national programs. As courts continue to weigh in, the saga is likely to influence not just reproductive health — but how Congress and courts balance funding power and constitutional safeguards in other politically charged policy arenas.