How is Planned Parenthood funded? What special legal exemptions have been carved out for the industry? As the new Republican-controlled Congress takes up the question of defunding Planned Parenthood, understanding the specifics is critical – but funding is only part of larger concerns that must be addressed. This piece is the first in a three part series examining the funding mechanisms and special treatment Planned Parenthood and the abortion industry has received.

As the debate over abortion has intensified in recent years, much of the focus of the discussion has centered on Planned Parenthood, the United States’ largest abortion provider.  In 2014-2015 (the last year for which data is available), Planned Parenthood affiliates performed 323,999 abortions.

In 2015, undercover videos released by the Center for Medical Progress raised concerns about the allegedly illicit sale of fetal body parts and tissue and renewed the ongoing debate about taxpayer funding for the organization.  This series will examine public funding for Planned Parenthood (at the federal, state, and local levels), as well as other “special” legislative treatment Planned Parenthood has received here in California.

Federal Funding of Planned Parenthood

Planned Parenthood bills itself as a “non-profit” provider of “women’s healthcare services.”  However, the data reveals that Planned Parenthood is heavily subsidized by the federal government.

In the fiscal year ending June 30, 2015, Planned Parenthood reported revenue of $1.4 billion and a net revenue of $149.5 over its expenses. A large proportion of that funding comes from taxpayers.  Approximately $553.7 million (or 43% of Planned Parenthood’s total revenue) comes from taxpayer dollars.

According to Planned Parenthood, total revenues, net income after expenses, the amount of taxpayer funding, and the percentage of its income coming from taxpayer all increased over the prior year, while the number of clients served decreased.

These figures have resulted in increased scrutiny at the federal level.  In 2013, several pro-life members of Congress requested that the nonpartisan Government Accountability Office (GAO) conduct an audit of taxpayer funding of abortion services at six organizations – Planned Parenthood, Population Council, International Planned Parenthood Federation of America, Guttmacher Institute, Advocates for Youth and Sexuality Information, and the Education Council of the United States.

According to the report, Planned Parenthood and its affiliates received $344.5 million in federal funds and another $1.2 billion in funding from Medicaid (which includes a combination of federal and state funds) for a total of $1.5 billion over three years from all federal programs. The organization receives $1.2 billion from Medicaid, $201 million from the Title X family planning program $40.6 million from Title XX Social Services block grants and $25.9 million from the Title V Maternal and Child Health Services block grant.

What is the “Hyde Amendment?”

Most Americans have heard something about “the Hyde Amendment.” First passed in 1976, this amendment excludes abortion from Medicaid, the federal program that provides health care services to low-income individuals.  However, the Hyde Amendment is not a complete ban, as Congress has enacted several exceptions over the years. Currently, the federal Medicaid program requires funding of abortions in cases of rape or incest, as well as when the mother’s life is endangered by a physical disorder, illness or injury.

A majority of states have followed the federal government in restricting public funds used for abortion. However, 17 states have policies that direct their Medicaid programs to pay for most “medically necessary” abortions. Four of these states do so voluntarily, and another 13 states do so pursuant to court decisions that have mandated nondiscriminatory public funding of abortion. This latter group includes California, which mandated such nondiscriminatory public funding in Committee to Defend Reprod. Rights v. Myers, 625 P.2d 779 (1981).

While the Hyde Amendment is an important federal policy concerning the use of taxpayer dollars to fund abortion, one should be cautious not to overstate the impact of this policy on the ability of abortion providers such as Planned Parenthood to provide abortions.  Federal funding restrictions such as the Hyde Amendment may technically prohibit the use of taxpayer funds for abortion, but in practice they are fungible funds that simply enable abortion providers to spend a greater share of their private donations on abortion.

Indeed, the significance of these fungible federal funds was recently highlighted by the Obama administration’s issuance of a rule on December 16, 2016, that prohibits states from denying federal Title X family-planning funds to Planned Parenthood and other abortion providers. The new rule goes into effect on January 18, 2017, two days before President-elect Trump is inaugurated.

Planned Parenthood’s “3%” Argument

Planned Parenthood and its defenders have argued that it is not objectionable to provide public funding to the organization since abortion services represent only a small portion of their total activities.  They routinely cite the statistic that abortion comprises only three percent of their activities.

However, many commentators have challenged this “3%” statistic as misleading.  First, this statistic in based on “unbundling” abortion services into discreet tasks and counting them separately. As a National Review editor stated in an editorial, “The sponsors of the New York City Marathon could count each small cup of water they hand out (some 2 million cups, compared with 45,000 runners) and say they are mainly in the hydration business.”

Second, Planned Parenthood does not specify what share of this figure is represented by contraceptives (but they do state that contraceptives represent one third of their services). Many contraceptives, including the Plan B pill and intrauterine devices are abortifacient in nature and should be included in the definition of abortion services. Including such contraceptives would dramatically increase this figure.

In 2013, Rachel Larimore, senior editor of Slate Magazine, stated that the 3% figure was the “most meaningless abortion statistic ever”:

“[I]t’s easy to calculate, as the Weekly Standard did, that Planned Parenthood gets at least a third of its clinic income—and more than 10 percent of all its revenue, government funding included—from its abortion procedures.

“Ask anyone who runs a for-profit business or nonprofit charity if something that brings in one-third of their revenue is “central” to their endeavor, and the answer is likely to be yes. So yes, abortion is central to what Planned Parenthood does.”

Full article at California Catholic Conference website.