Medicaid Abortion Rule May Be Delayed : Medicine: Requirement that states help pay in cases of rape or incest leaves some in position of either breaking own laws or losing federal funds.

The Clinton Administration is weighing whether to delay a requirement that states help pay for abortions in cases of rape or incest, because the directive has placed some states in the untenable position of either violating their own laws or losing federal Medicaid funds, officials said Tuesday.

“They set these states up to be sued,” said Ray Hanley, head of the Arkansas Medicaid program and chairman of the State Medicaid Directors Assn.

The controversy arises from a debate over what Congress intended last year when it loosened the ban on federal funding for abortions in cases of rape and incest. Previously, federal Medicaid funds--which must be partly matched by states--had been provided only for cases in which a woman’s life was threatened.

In a directive issued last week, the Administration said that it now deems abortions in rape and incest cases as “medically necessary,” meaning that states must pay for them from Medicaid funds.

Medicaid, a program providing medical services for the poor, receives half of its funds from the federal government but is administered by the states.

In a letter to the federal Health Care Financing Administration, Hanley contended that the Administration directive had gone beyond the intent of Congress--which he insisted was merely to give states the option of paying for abortions for low-income rape and incest victims.

At least 10 states, including the President’s home state of Arkansas, would have to change their laws to implement the Administration order, Hanley said. However, the issue is moot in California, which has no restriction on the use of state funds for abortion.

Sally K. Richardson, director of the Health Care Financing Administration’s Medicaid Bureau, said in an interview that the Administration is “considering what the options are” in light of the bind in which its directive has put some states.

However, she insisted that it is not unusual for states to have to adjust their own laws to conform with federal mandates.

The Administration initially gave states until March 31 to assure that their Medicaid programs did not prohibit funding of abortion in cases of rape and incest.

However, for some states, changing their laws in time could be impossible. Louisiana’s Legislature, for instance, does not go into session until April and, even then, is required by a recently adopted constitutional amendment to consider only fiscal matters.

“Apparently, we have the choice of violating state law . . . or risk disapproval of our state plan,” Louisiana Medicaid Director Thomas Collins wrote in a memo to Hanley. “As you can see, we are in a rather difficult position.”

Hanley also complained that the Administration had given the states no warning before issuing its directive. He said they learned of it only through newspaper accounts several days before it was to be issued in final form.

The ban on federal abortion funding is known as the Hyde Amendment, after its author, Rep. Henry J. Hyde (R-Ill.).

Before the amendment’s enactment 17 years ago, the federal government paid for about 300,000 abortions a year through the Medicaid program.

With the election of one of their own as President, abortion rights advocates had hoped to lift the ban entirely last year.

However, their effort was soundly defeated in Congress, which agreed only to add exclusions for rape and incest.