Federal health officials announced Thursday what state leaders have predicted for weeks: that they are halting funding for Texas' Women's Health Program.

Cindy Mann, director of the federal Center for Medicaid and CHIP Services, said Texas left her agency no other choice by forging ahead with a rule designed to force Planned Parenthood clinics out of the program

"We have no choice but to not renew their program," Mann said. "... We very much regret that the state of Texas has taken this course."

The Obama administration believes Texas' plan to exclude Planned Parenthood from the program violates a federal law that lets Medicaid patients choose their own providers; the state's Republican leadership ardently disagrees, and says this is another example of federal overreach into a state decision.

“Texans send a substantial amount of our tax dollars to Washington, D.C., and it is unconscionable that the Obama administration has essentially told Texas it will send our tax dollars back to fund this program only if we violate state law and include its pro-abortion allies," Gov. Rick Perry said in a statement.

Anticipating that the federal government would turn off the funding tap, Perry announced last week that he would keep the family planning program, which serves more than 100,000 low-income Texas women, in place, at a cost of more than $30 million a year.

It's still unclear where the state money will come from in a tough budget cycle, but Perry has directed the state's Health and Human Services Commission to find cost savings or other efficiencies in order to fund the program without adding to Texas' existing Medicaid shortfall.

Mann said that under federal law, Medicaid beneficiaries must be able to choose their own providers. "Neither the federal government nor the state government is permitted to stop people from getting services from their trusted source of care," she said.

She said CMS will begin a gradual phase-out of the program, so funds won't be cut off immediately. If Texas takes over the program and no women lose services within the next three months, she said, federal support will be terminated. If not, it might extend the support longer. Mann said the state must submit a transition plan to the federal government for approval by April 16.

Asked if local governments could skip the state level and coordinate directly with the federal government to continue to get support, Mann said no. She said money for Medicaid programs flows through the state.