States should protect caregivers’ Medicaid funds from union skims

Robert and Patricia Haynes live in Mich. and provide full-time care for their adult children, Kevin and Melissa, who suffer from severe cases of cerebral palsy. Until 2014, they were forced to give a portion of their Medicaid reimbursements to the Service Employees International Union (SEIU), a scheme propagated by unions such as SEIU and the American Federation of State, County and Municipal Employees (AFSCME) that is commonly known as to as “dues skimming.” 

Yet, while a number of states including Michigan have taken action to prohibit the dues skim, a May rule by the federal Department of Health and Human Services (HHS) reversed a Trump administration effort to stop the skim nationally. A separate 9th Circuit decision last week also continues to allow unions to trap home care providers into paying them.

The Hayneses, like other caregivers across the country, are eligible for Medicaid reimbursement from the state for the care they provide to their disabled children. However, over a decade ago, unions worked with state policymakers in about a dozen states to permit the siphoning of union dues from Medicaid money the Hayneses received. Without their permission or intent, the state reclassified the Hayneses as “public employees” at the behest of SEIU — and they had to pay their dues.

Many members of the “home care workforce” are relatives or friends providing care to sick family members or loved ones in need.

It took years to end the dues skim in Michigan, including administrative action by former Gov. Rick Snyder, legislative reform, lawsuits and the defeat of a ballot measure backed by the unions in a last-ditch effort to keep the dues skim alive. After the SEIU took $34 million from providers like the Hayneses, this unfair policy finally ended.

But caregivers in states such as Illinois, Oregon and Washington had to wait until 2014 before unions could stop forcing them to pay fees to take care of their loved ones. In a landmark case, Harris v. Quinn, the U.S. Supreme Court said unions could not force Pamela Harris — an Illinois mom caring for her son Joshua, who needed constant care for developmental disabilities — to pay union fees.

But that same year, HHS under President Obama adopted a federal rule to explicitly allow Medicaid funds to be diverted to unions. While providers did not need to pay, unions could still trap them into paying. By 2017, the Freedom Foundation estimated that unions were skimming an estimated $150 million each year, affecting 358,000 caregivers’ Medicaid funds.

The reason was that, after Harris v. Quinn, at least 11 states allowed dues skimming and unions were able to make providers pay dues by establishing arbitrary opt-out windows that limited when caregivers could leave and stop paying union fees. Cindy Ochoa, who was taking care of her disabled son, Adam, even experienced the union’s forgery of dues authorization signatures to keep the payments flowing.

Then, in 2019, the Trump administration reversed the rule, prohibiting unions from taking Medicaid payments from providers. Now, President Biden’s commitment to being the “most pro-union president ever” is coming to fruition: the new rule from HHS once again gives federal blessing to dues skimming.  

A debate exists over whether states or the federal government have the authority to issue policies pertaining to these Medicaid reimbursements. While Medicaid dollars are funded in part by the federal government, state governments allocate the money. Some states, such as Michigan, have banned dues skimming, but Biden’s decision means that caregivers in many states without such statutory protections may be forced to pay union fees.  

The nature of home care means that unions don’t represent these caregivers in the traditional workplace or in negotiations with an “employer.” A parent is not going to file a complaint against his or her sick child. Neither is a union going to negotiate benefits when the supposed “employer” is a sick or disabled relative.

Yet, the Biden administration’s HHS rule and the 9th Circuit decision are prioritizing the dues skim over the best interests and financial needs of caregivers and our nation’s most vulnerable patients.

As Michigan has done, states must act now and not wait for the federal government or the courts to rule justly. State policymakers owe it to caregivers like Robert and Patricia Haynes, Pamela Harris, and Cindy Ochoa to pass laws prohibiting the dues skim from Medicaid payments, ensuring that these caregivers have maximum support and flexibility to provide for those they love.

Lindsay B. Killen is vice president for strategy and communications at the Mackinac Center for Public Policy, a research and educational institute in Midland, Mich. Follow her on Twitter @LindsayBKillen.

F. Vincent Vernuccio is a senior fellow with Mackinac Center’s Workers for Opportunity project and president of the Institute for the American Worker. Follow him on Twitter @vinnievernuccio.