INDIANAPOLIS – A federal court has upheld an injunction on behalf of Planned Parenthood of Indiana against a law that would have denied funding to health care providers that offer abortions.

The American Civil Liberties Union of Indiana prevailed in the U.S. Court of Appeals for the Seventh Circuit in the class action on behalf of Planned Parenthood of Indiana and others, including two patients.

Ken Falk, legal director for the ACLU of Indiana, applauded the appellate court's holding that federal law protects the right of Medicaid patients to choose a health care provider free of interference from the state.

"We are extremely happy that the Court of Appeals has upheld the trial court's decision so that thousands of Hoosiers can continue to receive necessary medical care."

Talcott Camp, deputy director of the ACLU Reproductive Freedom Project, said "this law was an attempt by politicians to punish organizations that are providing legal services. Elected officials should not place politics above women's health."

Without the injunction, House Enrolled Act 1210 -- the law passed by the Indiana General Assembly in 2011 -- would have prohibited Medicaid funds from going to any entity that offered abortions. Federal law already prohibits Medicaid funds from supporting abortion services.

Planned Parenthood said the loss of money would have reduced other reproductive care services, as well as cancer screenings.

The injunction is not the final resolution of the case, which is still being litigated.

"The people's elected representatives in the legislature decided they did not want an indirect subsidy of abortion services such as payroll and overhead to be paid with taxpayer's dollars and so crafted this law," said Indiana Attorney General Greg Zoeller. "Although the injunction concerning Medicaid funding was not lifted, we note that the 7th Circuit found the state has the legal authority to decide how federal block-grant dollars – which are tax dollars – will be distributed.

"We will review this opinion more thoroughly with our clients before deciding how best to continue to defend the Indiana law," Zoeller said.

The court ruled the state was within its authority to discontinue funding from two federal grants Planned Parenthood had received totaling $150,000 from the Disease Intervention Services program.

PPIN President and CEO Betty Cockrum said, "At a time when Hoosiers are struggling, it's shameful that our elected officials are spending their time, and our tax dollars, on cutting basic health care services -- such as preventing unintended pregnancies -- and restricting basic rights, rather than focusing on what we need most in Indiana: jobs for our hard-working neighbors and access to high-quality, affordable health care."

In addition to the civil proceedings, the state has filed an administrative appeal of a decision by the federal Centers for Medicare and Medicaid Services to not approve Indiana's Medicaid plan as revised by the 2011 legislation. In July, the administrative appeal hearing officers recommended upholding the federal agency's earlier decision to not approve the Medicaid plan.

The Attorney General's Office has filed an exception to it and awaits a final decision from the CMS administrator. The Attorney General's Office has maintained that the Medicaid funding issue should be decided as a dispute between the state and federal government, not between a private provider and the state.

Indiana Right to Life Legislative Director Sue Swayze urged Zoeller to appeal the ruling.

"Today's ruling means that unelected judges are forcing Indiana to subsidize our state's largest abortion business -- Planned Parenthood -- through Medicaid funding in spite of the clear intent of the Indiana legislature," she said. "This is a loss for every taxpayer in Indiana. We urge the State to appeal this ruling and we remain confident we will one day see an outcome that protects taxpayers."

nkelly@jg.net