Trump administration says it will withhold $200 million in California Medicaid funding over abortion insurance requirement

The Trump administration announced two measures on Wednesday seeking to restrict abortion access, including withholding hundreds of millions in federal funding from California, one in a series of parting shots from an outgoing administration that has repeatedly sought to limit the procedure on religious protection grounds.

During an event at the White House to celebrate administration efforts to curb abortion, Health and Human Services Secretary Alex Azar announced that the department will withhold $200 million in Medicaid funding from California in the first quarter of 2021 due to the state’s requirement that state insurance companies provide abortion insurance coverage.

“We are taking enforcement action against the state of California for imposing universal abortion coverage mandates on health insurance in the state,” Azar said. “We have informed California that this policy clearly violates federal conscience laws, but the state refuses to fix the issue and comply.”

California Gov. Gavin Newsom, a Democrat, accused the Trump administration of looking to “threaten Californians’ health just to score cheap political points — and during a global pandemic,” vowing to “continue to stand up for reproductive health and push back against this extreme presidential overreach.”

The impending $200 million cuts to the state’s Medicaid funding comes after the state activated its “mass fatality” program on Tuesday to deal with the Covid-19 pandemic, which included the purchase of 5,000 additional body bags. The state on Tuesday reported 38,374 new confirmed cases, plus 15,337 from previous days, according to the California Department of Public Health.

Azar added that his department would seek to continue to withhold $200 million for each additional quarter that the state does not comply — though it is unclear how, as Azar will be in his current role for less than a month of 2021 and President-elect Joe Biden’s administration appears unlikely to pursue a continuation of the policy.

At the same event, Principal Deputy Associate Attorney General Claire McCusker Murray announced that earlier Wednesday, the Justice Department’s Civil Rights Division sued the University of Vermont Medical Center after the agency concluded that a nurse had been compelled to participate in an abortion at the center despite her objections.

The medical center has contended in the past that the nurse’s allegations are inaccurate and that it was willing to work with HHS’ Office for Civil Rights (OCR) on further supporting employees’ religious rights as well as patients’ legal rights.

Neal Goswami, media relations specialist at the University of Vermont Medical Center, told CNN in a statement Thursday that “our opt-out policies and practices for employees who object to participating in certain medical procedures, including abortion, are strong and in full compliance with federal law.”

“Following previous direct discussions with HHS where we were told they would not be seeking additional federal enforcement, we were surprised and disappointed by this abrupt news, and will continue to stand up for the work we do, the people who do it, and the patients and families who seek our services,” he added.

CNN has reached out to HHS for comment.

The two measures re-affirm the administration’s continued focus on health care providers’ religious and moral objections to controversial health care procedures, such as abortion, under President Donald Trump. The department created a Conscience and Religious Freedom Division in January 2018.

In 2019, the agency issued a so-called conscience rule, allowing health care workers who cite moral or religious reasons to opt out of providing certain medical procedures, such as abortion, sterilization and assisted suicide. Reproductive rights advocates argued that the rule would hurt those in the LGBTQ community. They feared a religious liberty argument would be used to justify endangering patients, and a federal judge in New York blocked the rule last year from going into effect.

When asked about the timing of the California action given the outgoing administration, HHS Office of Civil Rights Director Roger Severino said on a press call Wednesday that “conscience rights aren’t up for partisan debate. It should not matter who is president. It should not matter who’s the director of the office for civil rights, whether it’s me or somebody else — the laws that Congress has passed on a bipartisan basis deserve to be enforced.”

The OCR has gone head-to-head with California Attorney General Xavier Becerra — Biden’s pick for incoming Health and Human Services secretary — over California’s abortion insurance coverage for some time. Becerra’s office said Wednesday afternoon that it had not “received anything official from HHS on this matter.”

OCR found in January that California’s requirement that state-regulated health plans cover abortions discriminated “against health care plans and issuers that did, or would otherwise, limit or exclude abortion coverage in their plan products.” The department deemed that a violation of the Weldon Amendment, which bars federal funding to any program or state government that “subjects any institutional or individual health care entity to discrimination on the basis that the health care entity does not provide, pay for, provide coverage of, or refer for abortions.”

Becerra responded with a letter in February asserting that in 2016, OCR has found that the “Weldon Amendment’s protections extend only to health care entities” and that California had granted an exemption in 2015 to the one health care entity that sought one. “Given this fact, as OCR itself has recognized, California has not subjected any health care entity to conduct restricted under the Weldon Amendment,” Becerra wrote at the time.

When asked by CNN about Becerra’s defense, Severino said that the California religious groups who took issue with the abortion requirement “are the real victims hurt here, and it’s up to the state to fix it.”

“Whatever method they choose to address the issues raised by the complainants there, we’re not going to dictate them for them what is the precise method to make sure that people who want abortion-free coverage under the law and get an abortion-free coverage under the law,” he said.

Severino did not address CNN’s question about the timing of cutting $200 million in Medicaid funding in the midst of the worsening coronavirus pandemic.

Sara Rosenbaum, a professor of health law and policy at George Washington University who worked for former President Bill Clinton, said that in light of the dwindling Trump presidency, “politically, practically, it’s an empty threat, but legally it’s a real threat.”

“When you’re starting up a whole brand new agency, standing up whole divisions, they’re walking into a deluge of issues,” she said of the Biden administration encountering the California policy, adding that “it may be justifiable to seek (court) protection so that nothing can happen. Because turning the wheels and turning off the wheels and reversing course inside an agency is a complicated thing procedurally and legally to do.”