State Policy Network
New federal rule ends unfair practice of dues skimming

Today, the Department of Health and Human Services announced a final federal rule that prevents states from taking money from in-home caregivers’ support checks and giving it to unions. In recent years, some 350,000 home caregivers have lost an estimated $150 million annually through the dues skimming scheme, but they will now be able to keep more money in their pocketbooks and be better positioned to provide improved care to their patients.

In 11 states — previously in more — in-home caregivers who are usually taking care of sick family members, children, or friends have wrongly been classified as public employees and subjected to unionization. In these states, union-supporting governors and legislatures declared these providers “public employees” simply because they receive state support to take care of the needy. This classification has allowed states and unions to engage in the dues skimming scheme whereby states take union dues out of the caregivers’ support checks before the assistance ever reaches the patient, child, or their caregiver.

While a 2014 US Supreme Court decision in Harris v. Quinn said states may not force caregivers to belong to unions, in many cases, caregivers were coerced or tricked into paying dues. Some caregivers reported never knowing they belonged to a union.

This scheme costs Medicaid patients and their caregivers in an estimated $150 million each year from their Medicaid Home and Community-Based Services waiver funds.

Caregivers will still be allowed to join and pay a union if they decide that is the right choice for themselves and their family, but the new rule prevents states from doing this on their behalf.

No parent, relative, or friend should be coerced into paying a union just to care for a loved one. That’s why State Policy Network and the Network have worked to find a solution that would stop dues skimming from robbing the vulnerable who need Medicaid’s support most. Today’s victory is the culmination of a multi-year effort by state-based think tanks and other nonprofits across the country that have dedicated countless hours to ensure the rights of our country’s most vulnerable are protected.

A network coalition forms and raises awareness

In January 2017, SPN tapped the expertise of several state think tanks, asking them for input on a solution that would protect caregivers while returning power to the states. The Freedom Foundation, Center of the American Experiment, Mackinac Center for Public Policy, The Buckeye Institute, and Yankee Institute weighed in with the same answer: the federal government must end the dues skim.

In spring of 2017, state think tanks began working in earnest to raise awareness of the dues skim issue. The Mackinac Center for Public Policy published “How to Stop Dues Skim of Federal Home Healthcare and Childcare Funding,” providing critical research and positioning state think tanks as experts on the issue.

State think tanks also participated in an op-ed campaign to place commentaries about the dues skim impact in strategic news outlets frequently read by policy makers and key influencers. SPN’s Vincent Vernuccio and Chantal Lovell and Freedom Foundation’s Maxford Nelsen traveled to New York for a media tour on dues skimming, and their outreach eventually prompted The Wall Street Journal to publish an editorial calling for an end to dues skimming.

While media coverage drew attention to the problem of dues skimming, key decisionmakers in DC needed other resources to prove their constituents wanted the dues skim to stop. SPN provided lawmakers and agency staff with polling data showing that 88 percent of Americans thought the government should end the dues skim and shared updates via—a hub for information on dues skimming that featured emotionally compelling educational videos, FAQs, and several other resources. SPN also brought home healthcare workers and a patient from Washington and Minnesota to DC, along with key staff from the Freedom Foundation and Center of the American Experiment. They shared stories and research with lawmakers and media to educate them on the negative impact of dues skimming on patients and caregivers.

With these resources in hand, lawmakers, and agency staff had the necessary data and stories to make a case for ending the dues skim. In the spring of 2018, the Senate Committee on Homeland Security and Governmental Affairs, led by Wisconsin Senator Ron Johnson, launched a dues skim investigation—a significant step that showed the coalition’s work was gaining ground with lawmakers and agencies.

A federal rule is proposed and finalized

In July 2018, the Department of Health and Human Services proposed a rule that would end the dues skim. This announcement marked an even bigger milestone—after nearly four years of research and education, relief for caregivers was within reach.

HHS opened a comment period on the proposed rule, and this opportunity gave states and home caregivers another chance to emphasize how this rule would protect caregivers.

The comment window coincided with a new and timely study from the Freedom Foundation, which detailed the scope and impact of dues skimming nationwide and provided updated estimates of the amount states take from caregivers and give to unions. At the same time, the coalition’s media outreach resulted in another victory when The Wall Street Journal editorial board called for an end to the dues skim.

Thank you to the state-based leaders and generous supporters who made this multi-month effort a success. As a result of SPN and the states coming together through the power of the Network, we were able to accelerate this effort and bring positive change from the states to the federal level.

This is a victory worth celebrating, but it is not the end. SPN and the coalition of state think tanks will continue to educate policymakers and caregivers about the impact of the rule and how states must now end the dues skimming practice.

Organization: State Policy Network