Medicaid rule change will prevent states from doing unions’ dirty work

The unions claiming to represent hundreds of thousands of Medicaid-reimbursed homecare providers all around the country are about to have their bluff called.

On Thursday morning, the federal Center for Medicaid Services (CMS) announced a rule change ending the despicable practice of states skimming union dues and political contributions from the paychecks of individuals providing home-based care services to low-income clients.


The move comes after a multi-year effort by the Freedom Foundation to encourage the agency to administer the program as its framers intended.

Federal Medicaid law requires payment for services be made directly to service providers. Beginning in the 1990s, however, certain states began diverting Medicaid funds to third-parties like SEIU and AFSCME from home caregivers’ wages.

In 2014, the Obama administration attempted to retroactively legitimize the enterprise by adopting a regulation inappropriately adding an exception to the statutory direct payment requirement.

A report released by the Freedom Foundation last year found that eight states — including California, Connecticut, Illinois, Massachusetts, Minnesota, Oregon, Vermont and Washington — deducted nearly $150 million in union dues from the wages of more than 350,000 caregivers in 2017.

An estimated $1.4 billion in Medicaid funds has been diverted to unions since 2000.

Caregivers in Pennsylvania are now also affected.

Ever since the U.S. Supreme Court issued its 2014 ruling in Harris v. Quinn, which did away with mandatory union dues and/or fees for home-based caregivers, the government employee unions designated to represent them have worked feverishly to suppress those rights.

Among their efforts is a scheme adopted by numerous states in which dues are siphoned off by the state before they ever reach the provider.


The tactic is a clear violation of federal laws, which make clear that Medicaid payments must be made directly to the intended recipient, and its only purpose was to complicate the process of opting out.

Consequently, the unions have boasted for years that the providers were content and united, and that outreach efforts to inform workers of their rights were a waste of time — notwithstanding the 50,000 workers who have already opted out on the West Coast alone.

Now the burden of proof has shifted and we’re going to see exactly how popular the unions are with their “membership.”

Once the new rule takes effect — as it should within the next 60 days or so — the unions will have to work to earn the dues of every single member.

If this sounds like a tough standard, maybe it is. But it’s exactly what private-sector businesses must do if they expect to turn a profit.

Why are the representation services offered by the unions an exception to normal economic rules, and why are they entitled a legal monopoly to spare them the painful necessity of competing in the marketplace?

Again, if public-sector unions were providing a service truly valued by their would-be members, they’d have nothing to fear from this rule change.

But they’re not, and they know it. That’s why we’re expecting they’ll fight — dirty.


But we’re ready for whatever they throw at us.

In the meantime, this is a truly historic moment — as consequential in its own way as last year’s ruling in Janus v. AFSCME, which followed up on Harris by affirming the right of all government employees to decline union participation.

One court decision, one administrative rule change, one worker opt-out at a time, the ability of public-sector unions to corrupt the political process at every stage of American government with money confiscated from workers unwilling to give it is disintegrating before our very eyes.

And it’s about time.

Jeff Rhodes is the Managing Editor at the Freedom Foundation.


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