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Trump Administration Ends Homecare Providers Dues Skim

Since 2000, state governments have diverted $1.4 billion from homecare providers and handed it to labor unions, according to the Freedom Foundation. For over a decade, states automatically deducted union dues payments from Medicaid payments intended for homecare providers who care for the elderly or disabled. Worse, most homecare providers care for family members on Medicaid. No one should be forced to fund a union when simply caring for a loved one.

Thankfully, last week, the Centers for Medicare & Medicaid Services (CMS) within the Department of Health and Human Services issued a final rule, called the “Reassignment of Medicaid Provider Claims,” that prohibits state governments from automatically deducting union dues from Medicaid checks meant for homecare providers.

The Reassignment of Medicaid Provider Claims rule closes a loophole created by an Obama-era rule that provided legal cover for states automatically deducting dues from Medicaid payments. A 2014 rule issued by the CMS permitted states to withhold a portion of Medicaid payments to homecare providers and reroute them to third parties who provide “benefits customary to employees.”

The Obama rule created an exception to the Social Security Act (SSA) that mandates Medicaid payments for “any care or service provided to an individual” are to be sent directly to the beneficiary of services or to the person or institution providing such services. One problem with that regulation is that Congress did not delegate authority to the CMS to create new exceptions. And the Obama administration acknowledged as much during the rulemaking process. In the CMS proposed rule it states that the SSA does not “expressly provide for additional exceptions to the direct payment principle.” Congress did create a defined set exceptions to this direct payment requirement, but sending a portion of Medicaid checks to labor unions is not one.

Beyond overreaching its authority, the Obama rule gave states legal cover for deducting dues directly from home provider payments. And most of these homecare providers did not even realize unions were trying to organize them or that union elections were underway. For example, in 2006, the SEIU engaged in a stealth campaign to unionize homecare providers. Its tactics produced a voter turnout of just 20 percent, and SEIU won a landslide victory. Similarly, in Illinois, the election was not highly publicized, only about 16,700 day care providers out of around 50,000 eligible voters returned ballots. While the SEIU received strong support among voters—around 80 percent—in reality that meant about 14,000 child care workers decided the fate for all of the 50,000 care providers.

Once unionized, labor unions used state-mandated “captive audience” meetings to deceive individual homecare providers into believing union membership was required. In addition, once providers were coerced or deceived into joining, unions made it very difficult to end dues payments. Union dues deductions automatically renewed every year and homecare providers only had a short window (sometimes as little as 10 days) every year to send a letter to their union to end dues payments. 

Despite all this, House Democrats are seeking to defund implementation and enforcement of the rule that ends the homecare provider dues skim scheme. Here is the provision that has been included in the Labor, Health and Human Services, and Education, and related agencies appropriation bill:

SEC. 238. None of the funds made available by this Act may be used to implement, enforce, or otherwise give effect to the revision to section 447.10 of title 42, Code of Federal Regulations, contained in the proposed rule entitled ‘‘Medicaid Program; Reassignment of Medicaid Provider Claims’’ (83 Fed. Reg. 32252 (July 12, 2018)).

This appropriation rider is not unexpected given the outcry on Twitter from several House Democrats over the Trump administration rule. Rep. Suzanne Bonamici (D-OR) tweeted, “A new rule from the Trump Admin would make it harder for home health care workers to form unions & collectively bargain for higher wages, better working conditions, expanded benefits, and training. It's an unacceptable attack on workers.” Several other Democrats in Congress tweeted out a similar message.

These talking points from House Democrats are either purposefully false, or the representatives have failed to understand what the rule does. The rule does not, in any way, infringe on home health care workers’ right to form a union or collectively bargain. It merely prohibits state governments from rerouting portions of Medicaid payments to labor unions. Homecare workers may still voluntarily pay union dues—unions even started issuing pre-paid debit cards in response to the Trump rule to ensure dues continue to be collected. Rather than an unacceptable attack on workers, this rule makes sure workers receive their full pay and the right to determine how they spend their earnings.

As the House Committee on Appropriations prepares to mark-up the appropriations bill on Wednesday, which would defund enforcement of this rule, it is important to keep in mind that Medicaid payments are meant to care for the most needy in our society, not subsidize powerful labor unions.