Republican Governor and potential presidential candidate Mitch Daniels signed the bill earlier in the day on Tuesday. The measure bars the state from entering a contract with any entity that performs abortions (excluding hospitals and ambulatory surgical centers).
Planned Parenthood, which operates 28 centers in the state, would lose all public dollars under the law. Women who rely on Medicaid coverage could no longer receive services at Planned Parenthood.
Planned Parenthood President Cecile Richards released a statement calling the bill dangerous and criticizing Daniels for taking away health care for thousands of women in Indiana.
"Clearly, Governor Daniels, who has called for a truce on social issues, would rather play politics with women's health than show leadership and fiscal responsibility by rejecting a bill that will ultimately cost the state millions in federal funding," she wrote. "If Governor Daniels chooses to run for president, women across this country will not forget that he failed them when they needed him."
The injunction, which aims to prevent the law from immediately taking effect, argues that the measure is in violation of federal law because it deprives Medicaid patients of their choice of health care provider.
The injunction also argues that measure is unconstitutional on the grounds that it denies Planned Parenthood federal grants because the organization offers a constitutionally-protected medical procedure -- abortion.