The Department of Health and Human Services has protected America’s most vulnerable people by ending a decades-long scheme that robbed homecare providers of an estimated $150 million dollars each year. Under the new rule finalized on May 2, 2019, state governments may no longer take money out of Medicaid support checks intended to improve the quality of life of America’s sick, elderly and disabled, and give it to unions. This means family members and friends who stay home to care for loved ones will keep all of the money that is owed to them moving forward, rather than seeing hundreds or over a thousand dollars each year sent to a union they may not know.
Unfortunately child care providers for low-income families are still impacted by this scheme. A recent joint report by Freedom Foundation and Mackinac Center for Public Policy lay out several policy solutions to address this injustice. Learn more about these efforts.
State governments take an estimated $200 million intended to help the country’s most vulnerable and divert the money to unions. Money taken from Medicaid, Child Care and Development Fund, and Temporary Assistance for Needy Families funds reduce resources for those in need. In 13 states, caregivers —most of whom are taking care of sick friends and relatives, or friends, families, or neighbors taking care of disadvantaged children—have been classified as public employees, enabling unions to skim off dues from government support checks before the assistance ever reaches the patient, child, or their caregiver.
In certain states, the government allows unions like the Service Employees International Union (SEIU) to automatically withdraw union dues from home healthcare providers’ Medicaid funds. This scheme costs Medicaid patients and their caregivers in 11 states an estimated $150 million each year from their Medicaid Home and Community-Based Services waiver funds. States also allow unions to operate the same scheme against childcare providers who receive payment through the Child Care and Development Fund and Temporary Assistance for Needy Families funds, collecting an estimated $50 million annually in nine states.
Every dollar of Medicaid funds that state governments divert to SEIU and other unions is one less dollar available to help those in need.
Both Medicaid and child care-assistance programs have a narrowly defined purpose to help our country’s most vulnerable. Redirecting these funds to unions that aren’t directly helping program recipients should be prohibited to maintain program integrity.
Many of these healthcare providers serve a family member or friend from their home. No parent should be coerced into paying a union just to care for their own disabled child.
It is unfair that money skimmed from care providers is used by the unions to further legislative and political interests, pay executives, and even cover administrative costs—things that have nothing to do with serving these workers or the care recipients.
Union-supporting governors and state legislatures in these states declared home healthcare and daycare providers “public employees” simply because they are receiving state subsidies to take care of the needy. In states that aren’t right-to-work, this means that caregivers were forced to pay union dues. Thankfully, a 2014 Supreme Court ruling in Harris v. Quinn questioned the “public employee” status and declared that unions could not force these caregivers to pay the unions. However, the decision did not end the problem. Unions continue to pressure and deceive caregivers into membership so they can collect dues.
State governments and unions developed unfair and confusing rules that trap caregivers in the dues skim. For example, some caregivers can only opt-out of their union during a 15-day annual period that varies by member. In Minnesota, caregivers have alleged that unions forged signatures on membership cards. Unions have similar arrangements in other states. The structure for dues skim exists in: Washington, Oregon, California, Connecticut, Illinois, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, Vermont, and Rhode Island.
A recent nationwide survey found that a vast majority of Americans oppose dues skimming and two-thirds find the current opt-out procedures unfair. Home healthcare providers deserve a permanent fix so they can have freedom of choice to focus on providing care to their patients instead of fighting off unions that rob a portion of their payment.
Congress and the US Department of Health and Human Services have the authority to comprehensive fix the dues skimming and prevent states from acting as unions’ dues collection agents by:
Preserving Medicaid funds for important services by prohibiting their diversion to union fees.
Protecting childcare program funding such as TANF from going to unions.
Ensuring care providers remain independent and not classified as state employees.
May 2, 2019: DHS Ends Unfair Practice of Dues Skimming
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.
August 14, 2018: DHS Reviewing Public Comment on Proposal to End Dues Skim
The US Department of Health and Human Services (DHHS) has closed its public comment period on a proposed rule that, if enacted, will prohibit states from taking money from Medicaid checks and giving it to unions.
Comments supporting DHS’ proposed move submitted during the 30-day period explained how dues skimming jeopardizes the needed Medicaid program and falls outside its narrowly defined purpose. Other comments touched on the unfairness of dues skimming, which robs our country’s most vulnerable of approximately $150 million a year.
DHHS is currently reviewing comments. Check back for further updates on the status of this proposed rule to end dues skimming and the ongoing efforts to protect in-home caregivers from this unfair and deceptive scheme.
July 10, 2018: Department of Health and Human Services Proposes End to Dues Skim, Seeks Public Comment
State governments may soon be prohibited from allowing unions to skim millions of dollars from the Medicaid checks of people who are caring for sick friends and relatives.
Today, the US Department of Health and Human Services (HHS) announced a Notice of Proposed Rulemaking to protect the integrity of the Medicaid program by ensuring states are no longer able to take union dues from the support checks of in-home caregivers who look after our country’s most vulnerable. If the rule is enacted, people who stay at home to care for elderly, sick, and disabled loved ones will be able to keep the entirety of their Medicaid support checks; states will no longer be able to siphon money away and give it to government unions.
Each year, in-home caregivers lose an estimated $150 million from their support checks, and this proposed rule is a way to stop this unfair and deceptive scheme once and for all.
HHS said it will publish a Notice of Proposed Rulemaking (NPRM) in the Federal Register on Thursday, July 12, marking the start of a 30-day-long period during which the public may comment on what the rule would mean for them. Impacted caregivers are especially encouraged to provide comment on the personal impact of the rule to them and their families and patients.
The public comment period is now open. Comment on the proposed rule to end the Dues Skim here. All comments are due no later than 5 p.m. EST on August 13, 2018.
May 2, 2018: Lawmakers voice concerns over dues skimming
US Sen. Ron Johnson (R-Wis.) sent a letter to the Centers for Medicare and Medicaid Services challenging the practice of dues skimming. He notes in his letter that it is illegal for Medicaid funds to be sent to anyone other than the caregiver, encourages CMS to look into the practice, and asks for information on whether a new law or regulation is required to stop this from happening. He joins Rep. Cathy McMorris Rodgers (R-Wash.), who also recently voiced concerns with dues skimming, signaling an end could be in sight for this deceptive scheme. Read his letter here.
Maxford Nelsen, Director of Labor Policy at the Freedom Foundation in Washington state, observed, “For over a decade, unions like SEIU have been permitted to hijack Medicaid funds meant for caregivers serving the elderly and disabled. Even though the US Supreme Court denounced this practice as a ‘scheme’ in 2014, unions and their allies in state governments continue to employ coercive practices to seize hundreds of millions of dollars in union dues from the Medicaid payments of hundreds of thousands of caregivers’ in states across the country. It is very encouraging to see Sen. Johnson and the Governmental Affairs Committee taking this issue seriously. Federal action is urgently needed to protect caregivers’ rights and to stop Medicaid funds from being siphoned off to politically influential special interest groups.”
7 out of 10 support anti-dues skimming policies, with nearly half strongly supporting.
There is 12 to 1 support for the proposed federal solution to dues skimming.
88 percent of Americans think the federal government should put a stop to dues skimming.
87 percent of Americans believe tax dollars should support those in need, not unions.
6 out of 10 Americans agree that it should be simpler for caregivers to opt our of union membership.
Pam Harris is an Illinois mother whose son Joshua, “needs constant care because of a rare genetic syndrome that causes severe intellectual and developmental disabilities.” She was lead plaintiff in Harris v. Quinn, the Supreme Court case which gave right-to-work to home healthcare providers.
"Isabella County's Steven Glossop has been providing care for his 71-year-old mother Linda Glossop for the last four years. Linda had heart surgery and suffered a stroke while recovering at the hospital, which limits her mobility. Steven noticed money was being taken out of their Medicaid payments and going to a union. He contacted the Service International Employees Union asking to be released from the union. That did not happen."
"Rob and Pat Haynes of Michigan’s Macomb Township have adult children, but will never be 'empty nesters.' Around the clock, in their home, and probably for life, they care for their children, Melissa and Kevin, who suffer from cerebral palsy. Medicaid was meant to help people like the Haynes, who face heavy healthcare burdens through no fault of their own. But the Haynes’ decision to care for their children at home and accept Medicaid payments to offset the costs caused them to be labeled 'government employees' who are subject to 'union dues' — a violation of their rights and a corruption of public assistance for them and nearly 60,000 other home health care providers."
Catherine Hunter is a Minnesota Personal Care Assistant and former teacher. She looks after her son, Drew, who has a birth defect that requires the assistance of another adult. A union organizer came to the Hunters’ home to encourage Catherine to join the SEIU and hand over a portion of Drew’s Medicaid support checks to the organization, even though she didn’t feel it would represent her or her son’s interests. Catherine’s drive to protect the tax dollars allocated to help people like Drew led her to get involved to decertify the union.
"I take care of my sister-in-law seven days a week. Her Medicaid reimbursements help me care for her. For 11 years, the union has been taking money from her reimbursements without permission." After learning about the Harris v. Quinn decision, Brad chose to opt out of the union so they could no longer take money out of his sister's reimbursements.
Rosetta Horne provides care to her mother. She was told that in order to receive state funding she would have to join the union. She was lied to, but now knows the truth.
Like thousands of caregivers around Washington state, LaCelle was forced to pay union dues and/or fees as a condition of her contract with Medicaid, which pays gives a stipend to care for her disabled daughter. However, the U.S. Supreme Court ruled in 2014 that individual providers cannot be considered full-fledged union employees for representation purposes.
The Olsens care for their son. Reflecting on their circumstances, the Olsens said, "Having the union take our money was a real hardship on us. We used to pay $2,000 a year in dues...that could be spent on gas, groceries, and medical bills. The union has never helped us, and we're better off without them."
Caregiver Mary Jane helps make sure her Autistic grandson receives the love and care he needs. For her, caregiving isn't a profession, but simply a service to her family.
Michelle Peterson is the caregiver for her daughter, Emily. She never wanted to be part of a union and never signed a membership card. But SEIU 775 and the State of Washington didn’t care, and they took her money anyway. She didn’t even know the state was withholding union dues for SEIU 775 from her pay until informed by the Freedom Foundation of her constitutional right to have the deductions stopped.
Homecare provider Miranda Thorpe provides care for her daughter, Sarena, and receives reimbursement subsidies from the State. Even though the union can’t legally force providers to join the union, the state and union colluded to force every provider to pay full union membership dues until the provider completes a specific opt-out process. The union skims hundreds of thousands of dollars from providers who have never signed membership cards. Miranda, with the help of the Freedom Foundation’s legal team, brought a lawsuit to stop this deceptive practice.
This one-pager summarizes the dues skim problem and how policymakers can help.
This one-pager features a few brief testimonials of medicaid caregivers harmed by the dues skim.
Please contact Chantal Lovell with media inquiries.