News Story

Medicaid Dues Skim May Come To An End, After All

Friends, relatives of disabled individuals among those swept into public sector unions

The U.S. Department of Health and Human Services has signaled that it is considering a rule prohibiting states from deducting union dues from checks sent to home health aides employed by Medicaid beneficiaries. This in-home care is often provided by friends and relatives, who receive their checks from the state.

The practice of states classifying these aides as public employees and letting unions deduct dues from their checks, sometimes referred to as a “dues skim,” is currently allowed in 11 states.

The Olympia, Washington-based Freedom Foundation estimates that in 2017, about $150 million in union dues was skimmed from Medicaid checks.

In Michigan, the state allowed the Service Employees International Union to skim $34.4 million from Medicaid checks between November 2006 and May 2012. The practice officially ended in Michigan in April 2013.

At some point between 1992 and 2015, 15 states allowed unions to take a share of Medicaid money that was meant to pay health aides. This came about after unions “organized” those aides through processes that raised questions and were not transparent. In 14 states and three counties in California, it was done either through union votes that, on average, saw just 27 percent of targeted workers participate, or with a “card check” process. Under card check, workers are contacted one at a time by union associates and asked to sign a card indicating their support for forming a union and paying dues.

The Mackinac Center for Public Policy was the first organization in the country to challenge the legality of dues skimming. Michigan Capitol Confidential, which is published by the Mackinac Center, also published over 100 articles on the subject.

In April 2013, Gov. Rick Snyder signed a new state law declaring home health care workers to be private employees, not public ones, and thus not subject to unionization. That same month, the Michigan Department of Community Health ended a contract with the SEIU that had been established during the term of former Gov. Jennifer Granholm. With the end of the contract, dues skimming stopped.

In the 2014 U.S. Supreme Court ruling Harris v. Quinn, the court held that these Medicaid home health care providers are not state employees and so are not subject to unionization under federal labor law. But the ruling didn’t explicitly prohibit states from siphoning money from Medicaid checks to union coffers, usually the SEIU or the American Federation of State, County and Municipal Employees.

“The Mackinac Center’s leadership in ending the dues skim in Michigan set the stage for both the Supreme Court’s opinion in Harris v. Quinn and this proposed rule, which should once and for all prevent public employee unions from improperly taking money meant to assist some of our country’s most vulnerable citizens,” said Patrick Wright, who was the lead attorney on the Mackinac Center’s dues skim-related lawsuits and is the head of the Mackinac Center Legal Foundation.

The Mackinac Center for Public Policy has submitted a public comment to the U.S. Department of Health and Human Services, sharing its experiences opposing unions skimming money from Medicaid payments to those caring for sick friends and relatives.

“Michigan’s experience provides compelling insight into what happens when the rights of independent home care providers are deprived through compulsory or coerced union fees,” the Mackinac Center’s comment reads in part. “According to a report by the U.S. Department of Labor, SEIU Healthcare Michigan’s membership fell from 55,265 in 2012 to 10,918 in 2013, once mandatory payment of union fees was no longer a condition of employment.”