If a state Medicaid program is not in compliance with federal law and regulations, federal officials can take corrective action, including “the total or partial withholding” of federal Medicaid money...But we heard over and over, as the Democrats pushed health care reform, that federal law prohibits funding abortion. How then could Indiana's attempt to withdraw funding abortion violate federal law? How could federal law require states to fund abortion?
Administration officials said the Indiana law imposed impermissible restrictions on the freedom of Medicaid recipients to choose health care providers.
Indiana is one of at least a half-dozen states that have taken aim at Planned Parenthood because it performs abortions, about one-fourth of those performed in the United States.
Asked for comment on the Indiana law, the federal Centers for Medicare and Medicaid Services provided this statement, cleared by the White House: “Federal law prohibits federal Medicaid dollars from being spent on abortion services. Medicaid does not allow states to stop beneficiaries from getting care they need — like cancer screenings and preventive care — because their provider offers certain other services. We are reviewing this particular situation and situations in other states.”So a key point seems to be that Planned Parenthood offers plenty of services other than abortion, and Indiana's law isn't limited to withholding funds for abortion.
Medicaid is financed jointly by the federal government and the states, which must comply with federal law as a condition of getting federal money.
It seems unavoidable that abortion will be a central issue in the 2012 presidential campaign. Perhaps this is the real reason Mitch Daniels is avoiding running. He wanted "a truce the so-called social issues," but his signature is on that Indiana law, and he would have to defend it over and over again.