By Jennifer Calfas, Mariah Timms and Katy Stech Ferek

Planned Parenthood is closing clinics and facing more financial strains as Republican control of Washington opens new avenues for weakening the abortion provider.

The organization will go before the Supreme Court on Wednesday for a case that will help determine whether states can kick healthcare providers that offer abortions out of their Medicaid programs, a move that would further imperil the organization's presence in conservative states.

Republicans who control Congress and the White House are using cuts to federal spending to target progressive groups. Antiabortion leaders are making a push to get GOP lawmakers in the coming weeks to strip some $700 million in Medicaid and other federal funding that Planned Parenthood receives for nonabortion healthcare services. Already the Trump administration has frozen about $20 million in family-planning grants to Planned Parenthood clinics in about a dozen states.

"This is an opportunity we cannot afford to miss," Rep. Chris Smith (R., N.J.), said at a Capitol Hill event last week calling to defund Planned Parenthood.

Any loss of funding would further exacerbate the organization's financial challenges. A burst in fundraising after the overturning of Roe v. Wade nearly three years ago has dissipated, and Planned Parenthood is operating at a loss and treating fewer patients, according to the most recent publicly available financial reports.

"This isn't the first time we have faced attacks, and we know it won't be the last. We will always fight to protect patients and ensure they can get the essential care they need," Planned Parenthood President and CEO Alexis McGill Johnson said.

Planned Parenthood is a sprawling organization with a national office that serves as a fundraising, lobbying and communications juggernaut. A network of about 50 local affiliates operate some 600 clinics that provide services including abortion, contraception, breast-cancer screenings and a range of other healthcare. Overall its clinics provide about a third of abortions in the U.S.

Nationally, Planned Parenthood operated at a loss in 2023 -- the most recently available data -- running nearly $68 million behind its expenses as contributions dropped 15% from a decade high of more than $428 million in 2022. The national office has laid off dozens of staff members over the last couple of years, in part to send $70 million in additional funding to its local affiliates, many of which have also struggled financially.

Local Planned Parenthood clinics have had to navigate restrictions on abortion that have slashed the number of procedures they can legally perform in some states and made it difficult to recruit staff amid a broader healthcare-worker shortage.

Planned Parenthood affiliates have announced temporary or permanent clinic closures even in states with protective abortion laws including Illinois, New Mexico, Ohio and the organization's home state of New York. The New York affiliate recently announced it would sell its Manhattan clinic, ending a century-long presence in the borough; it has closed four other clinics over the past year.

The affiliate loses more than $30 million annually, its representatives told city lawmakers last week in a plea for more public funds. "The care New Yorkers deserve and have come to rely on from PPGNY over many years is in real danger," said Dr. Gillian Dean, the affiliate's chief medical officer.

Wednesday's Supreme Court case involves a 2018 decision by South Carolina's Republican governor to prohibit organizations that offer abortions -- including two Planned Parenthood clinics -- from being eligible healthcare providers under Medicaid, the government program that covers limited-income Americans.

The Medicaid law allows patients to use any qualified provider that participates in the program. Planned Parenthood argues that states can't for political reasons interfere with that freedom. South Carolina, which bans most abortions after the earliest weeks of pregnancy, argues that its opposition to subsidizing abortion is enough to disqualify Planned Parenthood. Although federal law prohibits Medicaid from paying for abortions, the governor reasoned that income for services such as pregnancy tests "frees up their other funds to provide more abortions," the state's brief says.

The justices are considering whether Planned Parenthood patient Julie Edwards has a legally enforceable right to obtain care from any qualified and willing provider. An appeals court in Richmond, Va., found she did.

John Bursch, a lawyer for the Alliance Defending Freedom who is arguing the case for South Carolina, said Planned Parenthood must choose between providing abortions or receiving Medicaid funding. "The one thing they can't do is have their cake and eat it, too," he said.

Abortion opponents are making a rare united push to get Congress to strip Planned Parenthood's federal Medicaid dollars, appealing to Republicans' broader cost-cutting efforts. Shortly after the November election, Elon Musk and Vivek Ramaswamy -- then co-heads of the Department of Government Efficiency -- cited Planned Parenthood's federal dollars as an example of government waste.

The changes to Planned Parenthood's funding could come as part of a broader restructuring of the federal Medicaid program in the coming few weeks. Planned Parenthood so far hasn't been a focal point for Republican negotiators in the House and Senate, although some key Republican legislators said they would be open to such cuts.

Write to Jennifer Calfas at jennifer.calfas@wsj.com, Mariah Timms at mariah.timms@wsj.com and Katy Stech Ferek at katy.stech@wsj.com

(END) Dow Jones Newswires

April 02, 2025 05:00 ET (09:00 GMT)

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