Medicaid is financed jointly by the federal government and the states, which must comply with federal law as a condition of getting federal money.

Planned Parenthood of Indiana and two of its patients have filed suit in Federal District Court in Indianapolis, challenging the new restrictions as “a blatant violation of the ‘freedom of choice’ provision” of federal law. The federal government is not a party in the case, but the administration’s statement sends a signal to the court, which will hold a hearing in two weeks on whether to block the state law.

States can obtain federal permission to waive certain requirements of the federal Medicaid law. But the federal law says that “no waiver” may restrict the choice of Medicaid beneficiaries in receiving family planning services.

When Indiana legislators were considering the abortion bill last month, state Medicaid officials alerted them to possible legal problems. A “fiscal impact statement” on the bill, prepared by the nonpartisan staff of the legislature, said that “restricting freedom of choice with respect to providers of family planning services is prohibited” by federal law.

Mr. Daniels, the popular governor who said on Sunday that he would not seek the Republican Party’s nomination for president in 2012, once suggested a truce on social issues, saying the nation ought to concentrate on its fiscal problems. But he supported the Indiana law, passed with majorities of more than two to one in both houses of the legislature.

Mr. Daniels said the state law ensured that tax dollars would not subsidize providers of abortion. “Nonabortion services, whether family planning or basic women’s health, will remain readily available” from entities other than Planned Parenthood, Mr. Daniels said.

For years, federal law has barred the use of Medicaid money to pay for abortion except in certain cases of rape or incest or danger to the life of a pregnant woman.