Labor’s Piggy Bank

States deducted nearly $150 million in union fees from Medicaid caregivers' paychecks in 2017, new report shows

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Democratic strongholds deducted nearly $150 million from Medicaid caregivers' payments and handed them to labor unions in 2017, according to a report released by the Freedom Foundation.

California, Connecticut, Illinois, Massachusetts, Minnesota, Oregon, Vermont, and Washington deducted hundreds of millions of dollars in union dues and fees last year from federal funds set up to care for disabled and elderly Americans. The dues scheme has taken thousands of dollars from more than 350,000 Medicare providers, many of whom are caring for sick and aging family members. Since the turn of the 21st century, states have siphoned more than $1.4 billion in union dues from care aides' paychecks, according to the pro-free market foundation's report.

In 2014, the Supreme Court ruled in Harris v. Quinn that it was unconstitutional for states to force Medicaid caregivers to pay union fees against their will. But some states have created new measures since the decision, working with unions to coerce Medicaid caretakers to pay union dues even if they refuse.

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Maxford Nelsen, Freedom Foundation director of labor policy, believes some states that have continued to deduct fees from providers' wages do so because their state officials benefit politically from the support of labor unions.

"You have the state working with the union to enable the coercive practices," Nelsen told the Washington Free Beacon. "There's a lot of collusion going on between state officials and unions."

Before Harris, Nelsen said a common coercion tactic used by Medicaid caregivers included designating them as government employees for the sole purpose of placing them under the rule of public-sector collective bargaining laws. Workers did not receive any other benefits of being public employees, and states established laws to force care aides to pay dues once they unionized.

After the ruling, unions made it complicated for Medicaid providers to halt the state's removal of dues from their wages by altering membership forms. Some states required newly hired care aides to attend captive-audience meetings where union organizers tried to convince them into signing membership forms with binding provisions that allowed for dues deduction authorizations. In Washington, the state government will continue to skim fees from caregivers' paychecks without their authorization until they opt out of the deductions in writing.

"The ask is very different," Nelsen said, "if a union organizer has to get somebody's credit card information as opposed to just doing whatever it takes to get them to sign this piece of paper. Taking states out of that role will practically give caregivers the choice they should've had ever since the Court's Harris v. Quinn decision."

The Trump administration has attempted to regulate the skimming of dues by preventing unions from collecting federal funds. The Center for Medicare and Medicaid Services issued a rule in June to repeal a 2014 regulation adopted by the Obama administration that allowed states to collect union dues from Medicaid payments to home caretakers, who often care for disabled or elderly relatives.

"We think it went beyond the authority of the statute," Nelsen said of the Obama-era ruling. "It directly contradicted the statutory requirement that that payment be made directly to the provider of services."

Under 42 U.S. Code § 1396a(a)(32), Medicaid payments are required to be made directly to caregivers. There is no provision allowing for money to be disbursed to third-party entities that do not provide services to Medicaid clients—deeming the Obama-era regulation and many other union dues skimming methods practically illegal.

States such as Iowa, Maryland, Michigan, Missouri, Ohio, and Wisconsin have all put forth plans to end union dues deductions. But in Pennsylvania, home health aides await a state supreme court decision that may allow them to unionize. Nelsen said the suit is designed to set a precedent that will bar every state from dues skimming.

"At the end of the day, we want to see every caregiver be able to make an informed decision about whether to financially support a union or not," Nelsen said. "We want caregivers to be in the driver's seat. We want to see state and union exploitation of these folks come to an end."