By Lawrence Hurley
WASHINGTON (Reuters) - In a victory for Planned Parenthood, the U.S. Supreme Court on Tuesday declined to consider whether the state of Indiana can prevent the nonprofit, which is the country's largest provider of abortions, from receiving federal Medicaid funding for any medical services it offers to low-income people.
Supporters of the law, which was blocked by an appeals court, had wanted to prohibit any government funding of Planned Parenthood's medical programs, such as cancer and HIV screenings, because the group also provides abortion services.
Medicaid is a federal health program for lower-income people that is administered by the states.
Under existing federal and state law, no government funds can be used to directly fund abortions, but Indiana's law went further by saying that no group that provides abortions could receive government funding for other services. The funding would have the effect of subsidizing the abortion programs, the law's supporters say.
The 7th U.S. Circuit Court of Appeals in Chicago ruled in October that Indiana had broad authority to exclude unqualified providers from its Medicaid program for the poor, but could not deny funding to a class of providers for an unrelated reason, which in this instance was because Planned Parenthood clinics perform abortions.
Indiana Attorney General Gregory Zoeller, a Republican, subsequently sought Supreme Court review. The Supreme Court's refusal to hear the case leaves the appeals court ruling in place.
Lawmakers in more than a dozen U.S. states have in the last few years taken steps to cut off funding for Planned Parenthood, prompting it to file several lawsuits.
Planned Parenthood is the country's largest provider of abortions, conducting about one-quarter of those performed in the United States.
The case is Secretary of the Indiana Family and Social Services Administration v. Planned Parenthood, U.S. Supreme Court, No. 12-1039.
(Reporting by Lawrence Hurley; Editing by Howard Goller and Mohammad Zargham)