Trump admin ends ‘illegal’ 2014 regulation allowing states to skim, divert home-care payments to unions and and

On Thursday, the Trump administration terminated a regulation implemented in 2014 by the Obama administration formalizing a practice by many states that skimmed payments meant for home health service providers and care-giving families and diverted the money to labor unions.

The practice has been under contention for years, as it takes money out of the pockets of home caregivers, often family members of those requiring health care. Experts say the elimination of this shady practice will put as much as $150 million into the accounts of caregivers and families who are struggling to meet the demands of their patient-care work.

Even before 2014 when the policy was formally instituted by Obama bureaucrats, the practice was in place in several Democrat-run states beginning in the 1990s during the Clinton era.

According to the Freedom Foundation, portions of federal Medicaid payments intended as home caregivers’ wages were given to third-parties like SEIU and AFSCME, though they had no involvement in the caregiving. The Freedom Foundation has been fighting to strike down that practice for years.

“Repealing this illegal regulation is a major victory for caregivers and those who care about protecting Medicaid from being looted by special interests,” said Maxford Nelsen, Freedom Foundation director of labor policy.

“Kudos to the Trump administration for ending this shameful Obama-era policy,” Ashley Varner, Freedom Foundation VP of communication and federal affairs. “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.”

Federal Medicaid law stipulates that payments for services be routed directly to the service providers.

According to the Freedom Foundation …

In 2014, the Obama administration attempted to retroactively legitimize the practice by adopting a regulation inappropriately adding an exception to the statutory direct payment requirement.

A report released by the Freedom Foundation last year found that eight states — including California, Connecticut, Illinois, Massachusetts, Minnesota, Oregon, Vermont and Washington —deducted nearly $150 million in union dues from the wages of more than 350,000 caregivers in 2017. An estimated $1.4 billion in Medicaid funds was diverted to unions since 2000. Caregivers in Pennsylvania are now also affected.

Washington state caregiver Loren Freeman and his wife serves as caregivers for their daughter. He said:

“As both a caregiver and former regulatory analyst for the state, it’s clear the dues collection schemes unions like SEIU implemented have always violated federal Medicaid law. The Obama administration tried to grant legal cover to this scheme by passing a regulation in 2014, but an administrative rule can’t abrogate federal law just because a powerful special interest wants it to. By repealing this illegal regulation, the Center for Medicaid Services is not only upholding the rule of law but helping caregivers. Many live-in providers like myself pay as much as $1,300 a year in union dues for dubious representation. All caregivers deserve to be able to decide for themselves whether to hand over part of their wages to a union.”

“States have no business, legally or morally, diverting Medicaid funds to unions,” Nelsen said. “Caregivers deserve to be able to choose how to spend their wages after they’ve been paid in full for their services. If they wish to support a union, that’s up to them.”


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