Trump Administration Blocks States From Skimming Medicaid Payments for Unions

President Donald Trump (L) acknowledges the audience as Administrator of the Centers for Medicare and Medicaid Services Seema Verma (2nd L) looks on in the Eisenhower Executive Office Building in Washington on Jan. 18, 2018. Alex Wong/Getty Images

The Trump administration on May 2 finalized a Medicaid rule that will cut off states from skimming Medicaid payments for home caregivers and diverting them to labor unions.

While federal law requires Medicaid payments to be made directly to the service providers, several states began flouting the requirement in the 1990s, by diverting portions of the payments toward union dues.

In 2017, eight states took approximately $150 million in Medicaid payments from the wages of more than 350,000 caregivers, according to a report by the Freedom Foundation, a non-profit that has led the fight to curtail the practice.

“Caregivers deserve to be able to choose how to spend their wages after they’ve been paid in full for their services,“ said Maxford Nelsen, the director of labor policy at the Freedom Foundation. ”If they wish to support a union, that’s up to them. But giving unions access to caregivers’ paychecks has enabled them to exploit caregivers, using an array of unethical and illegal schemes, up to and including forging signatures on membership forms.”

The Supreme Court in 2014 struck down mandatory union dues requirements for home caregivers as unconstitutional. The same year, the Obama administration attempted to retroactively legitimize the practice by adding an exception to the direct payment requirement. The Trump administration’s Centers for Medicaid and Medicare Services (CMS) announced in July 2018 that it intends to undo the Obama-era rule. The final rule will be effective in July 2019.

The CMS found that the federal Medicaid law didn’t allow the Obama administration to order an exception to the provision concerning direct payments. The law “provides for a number of exceptions to the direct payment requirement, but it does not authorize the agency to create new exceptions,” CMS noted.

“Kudos to the Trump administration for ending this shameful Obama-era policy,” said Ashley Varner, a vice president at the Freedom Foundation. “This move by the Trump administration will put as much as $150 million per year back in the pockets of families who need it most.”

California, Connecticut, Illinois, Massachusetts, Minnesota, Oregon, Vermont, and Washington diverted up to $1.4 billion to unions since 2000.

Brad Boardman, a caregiver from Washington state, opted out of the Service Employees International Union (SEIU) in 2014 on the heels of the Supreme Court decision that struck down mandatory union memberships for caregivers. In a statement for the Freedom Foundation, he said that the new CMS rule “is a big step towards giving caregivers control of their own money again.”

“In recent years, SEIU and state governments have concocted a host of schemes to keep skimming dues from caregivers’ wages for the union to use on its political agenda,” Boardman said.

“They’ve lied to and pressured caregivers. They’ve forged signatures on membership forms. They’ve even spent our money on lawsuits and deceptive ballot measures to keep caregivers in the dark about their rights,” he added.

In a statement, the SEIU criticized the Trump’s administration’s rule, saying that it attacks “roughly 800,000 home care workers’ ability to use common paycheck deductions for health insurance contributions, union dues, and other expenses.”

Loren Freeman, a Washington state caregiver, said that the CMS decision upholds the rule of law and helps caregivers.

“Many live-in providers like myself pay as much as $1,300 a year in union dues for dubious representation,” Freeman said. “All caregivers deserve to be able to decide for themselves whether to hand over part of their wages to a union.”