Supreme Court Rules States Can Disqualify Medicaid Providers Under State Law

South Carolina allowed to block federal funding for non-abortion services

On Thursday, the U.S. Supreme Court ruled that South Carolina may lawfully prevent certain organizations from receiving federal Medicaid funds for non-abortion medical services. In a 6-3 decision, the Court upheld the state’s right to set its own rules for determining which medical providers qualify for reimbursement, as long as those rules align with state legislation.

Focus on patient choice and statutory interpretation

The legal debate centered on a federal Medicaid provision guaranteeing patients the ability to choose “any qualified and willing provider.” South Carolina asserted that it retains authority to remove providers from the Medicaid program based on its own legal framework. Governor Henry McMaster emphasized that taxpayers should not be obligated to fund entities they may disagree with ideologically.

Justice Neil Gorsuch, writing for the majority, stated that the law does not explicitly provide individuals with a private right to sue over this clause. He added that opening such claims could lead to extensive litigation across various Medicaid program aspects.

Dissent views the case as a civil rights matter

In dissent, Justice Ketanji Brown Jackson argued that the decision disregards Medicaid recipients’ right to choose their healthcare providers. She described the case as a civil rights issue, stating that individuals should be able to seek legal recourse when those rights are denied.

Although federal law has restricted Medicaid funding for abortion since 1976—with exceptions for rape, incest, or life-threatening cases—Planned Parenthood South Atlantic has long offered general health services, such as cancer screenings, in underserved areas of South Carolina.

Prior court decisions and national context

Lower courts had repeatedly sided with Planned Parenthood, affirming that it met the qualifications to provide services under Medicaid. The Supreme Court’s reversal marks a shift that may affect similar providers across the country.

The ruling comes as Planned Parenthood faces financial strain and clinic closures nationwide. Additionally, pending legislation in Congress may further reduce or eliminate federal funding for the organization.

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