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Unions Could No Longer Get Medicaid Money Under New Trump Proposal

The federal government wants to roll back an Obama-era rule that lets some Medicaid payments go toward unions that represent home health care workers -- one of the fastest-growing and lowest-paid jobs.

Home health care worker helps her client out of their wheelchair
(AP/Ted S. Warren)
The Trump administration on Tuesday proposed rolling back an Obama-era rule that allows Medicaid payments to be diverted to unions supporting home health care workers.

This news comes just two weeks after the U.S. Supreme Court dealt a blow to public unions, ruling that they can no longer require employees who are represented by them to pay so-called agency fees.

In the announcement, Tim Hill, acting director for the Center for Medicaid and CHIP Services, alluded that the Obama-era rule may be illegal.

“This proposed rule is intended to ensure that providers receive their complete payment, and any circumstances in which a state does divert part of a provider’s payment must be clearly allowed under the law,” said Hill.

For the most part, federal law prohibits Medicaid payments from going to anyone other than a provider. But the Obama administration created an exception to this rule in 2014 and allowed some unions to take a cut of home health care aides' Medicaid payments.

Eleven states -- California, Florida, Illinois, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, New York, Washington, Vermont -- plus Washington, D.C., let home health aides unionize. On the flip side, Michigan and Ohio both passed bills in recent years stripping home health aides of their public-sector status. 

Rolling back Medicaid money to unions has been a quiet hobby of some conservative politicians and think tanks who see the payments as unions cheating the system and using Medicaid money for unintended purposes.

Kim Crockett, a senior fellow at the Center for the American Experiment, a free-market think tank in Minneapolis, wrote in the National Review earlier this year that killing the rule would be a victory “for everyone with an interest in seeing welfare dollars directed to those in need -- and not into the coffers of union behemoths and their Democratic allies.”

U.S. Sen. Ron Johnson, a Republican from Wisconsin, began looking into the issue earlier this year.

“This classification allows states to skim an estimated $200 million each year in union dues -- taxpayer money that would otherwise go to the care of Medicaid recipients,” Johnson wrote in a letter to the federal Centers for Medicare and Medicaid Services, which proposed the rule change.

Unions argue that the Trump administration's proposal would further destabilize wages and the well-being of these workers in an industry known for unstable hours, low pay and burnout. Home health workers and family caregivers are one of the fastest-growing jobs in health care -- but also one of the lowest-paid. It’s estimated that around 90 percent of home health aides make no more than $30,000 per year, with an average salary hovering around $23,000. 

“The proposed rule targets these home care workers and is designed to stop them from contributing their own wages to support their union in the same way that teachers, police and firefighters do. This proposal is a transparent attempt to interfere with workers’ freedom to choose to join together in a union and advocate for higher wages, better training and basic benefits like affordable health care and paid sick time that are crucial to ensure quality home care for our parents, grandparents and children,” said the Service Employees International Union (SEIU) in a statement

A couple of major court cases have thrown the legality of the rule in doubt. In 2014, the U.S. Supreme Court ruled that home health care workers are only "partial public employees" and cannot be forced to pay union fees if they don't want to join the union. And last month, the Supreme Court expanded that conclusion to government employees in general.

Before the 2014 Supreme Court ruling, some Illinois home health aides argued that the union was responsible for doubling wages, offering health insurance and better training.

Mattie covers all things health for Governing.

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