11 States to Defy Clinton Abortion-Funding Rules : Government: Officials say their laws prohibit use of Medicaid money to pay for procedure in rape, incest cases.

At least 11 states plan to defy today’s Clinton Administration deadline to begin using Medicaid funds to pay for poor women’s abortions in cases of rape or incest.

In a broad clash between state and federal governments over one of the nation’s most divisive issues, state officials said they cannot comply because their own laws prohibit such a use of Medicaid dollars.

By some estimates, as many as 37 states could face conflicts between the federal mandate and their own regulations.

The federal Health and Human Services Department’s Health Care Financing Administration said, however, it has yet to determine how many states actually will choose to stand their ground.

Those that do so risk a broad range of penalties, including the possible loss of billions of dollars in Medicaid funds that are funneled to the states from the federal government.

“The thing we really need to do is go out next week with a letter to the states and ask them,” said Sally K. Richardson, director of the HCFA’s Medicaid bureau.

Some state officials are betting that the Administration will not press for compliance out of fear of stirring more controversy over abortion at a time when it is trying to win support for a health care reform plan that would include abortion coverage for all U.S. women, said Arkansas Medicaid Director Ray Hanley, chairman of the State Medicaid Directors Assn.

“A lot of them are saying the smart thing is just sit on it and see what HCFA does,” he said.

The dispute between the states and the federal government centers on what Congress intended when it loosened a 1976 abortion-funding law last year. That law, known as the Hyde Amendment for its sponsor, Rep. Henry J. Hyde (R-Ill.), bans the use of federal funds to pay for abortions for poor women who are enrolled in state Medicaid programs.

Previously, states were required to pay for those abortions only in cases when a pregnancy jeopardized a woman’s life. But last fall, Congress expanded the exemption from the Hyde Amendment to include cases of rape or incest.

In a letter to state Medicaid officials last December, Richardson said the change in the law means that abortions in cases of rape or incest now fall under the category of “medically necessary” procedures, meaning that states must pay for them, just as they must when a woman’s life is at risk.

In California and 12 other states, the issue is moot because they have long used their own money to pay for Medicaid abortions without restriction.

But officials in some other states argued that the Administration had overstepped Congress’ intention, which they insist was merely to give them the option of paying for abortions in those cases.

“The state of South Dakota does not see that a letter generated by Sally Richardson is a properly promulgated federal regulation that supersedes its own regulations,” said R. Shawn Tornow, an attorney with the state’s Department of Social Services.

South Dakota Gov. Walter D. Miller, a Republican, is among several governors who have written to President Clinton asking him to reconsider the policy.

“The Department of Health and Human Services has indicated that a lack of compliance, for whatever reason, would place our Medicaid funding at risk,” he wrote in a letter dated Feb. 18. “However, as governor, I cannot allow existing state law to be violated.”

An incomplete survey of states indicated that at least eight--Pennsylvania, Arkansas, Michigan, South Dakota, Louisiana, Kentucky, Utah and Oklahoma--have no plans to loosen their restrictions in compliance with the Administration directive.

“That’s where we are at the moment--kind of hoping that it goes away,” said Joe Wagner, a spokesman for Louisiana’s Department of Health and Hospitals.

Officials of three other states say they do not plan to meet the deadline. Officials of Alabama and Colorado said they were waiting for advice from their attorneys general, while a spokeswoman for Nebraska’s Department of Social Services said her state plans to schedule a public hearing.

The Hyde Amendment is reviewed annually during the congressional appropriations process, and could be revised to make Congress’ intention clearer.

Meanwhile, Rep. Jay Dickey (R-Ark.) has introduced legislation to reverse the Administration policy. Portions of it also are being challenged in federal court by Pennsylvania officials.