Rio Grande Foundation provides formal comments against “Dues Skimming”

There is a policy loophole in 11 states (blessedly, not in New Mexico) that allows unions to directly “skim” funds from the federal Medicaid program in order to pad their bottom lines. The Trump Administration has proposed a change to federal policy that would end the practice of “dues skimming nationwide.

There is a comment period now underway (it ends on August 13) that would end the practice. The Rio Grande Foundation submitted the following comments. As you might imagine, the unions (like SEIU) which benefit from the current policy, are going to fight to keep that money flowing. We encourage anyone, no matter what state they are from (we are all federal taxpayers) to submit comments in their own voice in an effort to eliminate this unfair and unwise practice. The website to submit comments can be found here. Our comments follow:

The Rio Grande Foundation is a 501c3 not-for-profit organization based in Albuquerque, New Mexico. Our mission is to educate New Mexicans on the many benefits of free markets and individual liberty.

These comments are in support of the proposed rule which removes the regulatory text at 42 CFR 447.10(g)(4) which allows a state to reassign portions of a provider’s payment to third parties for benefits such as health insurance skills training, and other benefits customary for employees.

This proposed rule is an important step towards eliminating the infrastructure in 11 states (California, Connecticut, Illinois, Maryland, Massachusetts, Minnesota, Missouri, New Jersey, Oregon, Vermont, and Washington) that permits state governments to collude with unions to withhold dues from Medicaid stipend checks that should pay care providers. These individuals often take care of disabled friends and family members.

While the Rio Grande Foundation and a vast majority of its supporters are NOT residents of the 11 states listed, the fact is that we, like all American taxpayers, have a direct interest in the efficient use of our federal tax dollars and the well-being of Medicaid recipients.

According to a report from the Freedom Foundation of Washington state, the current “dues skimming” diverts $150 million annually from Medicaid Home and Community Based Services waiver funds to union coffers and a total of $1.4 billion since 2000.

The current policy is wrong (and the proposed rule will improve the situation) for numerous reasons including the following:

• Dues skimming takes limited resources from the vulnerable. Every dollar of Medicaid funds state governments divert to unions is one less dollar available to help those in need.
• The current policy which allows “dues skimming” was never intended under the law. Medicaid has a narrowly defined purpose to help our Country’s most vulnerable. Redirecting these funds to unions that aren’t directly helping program recipients should be prohibited to maintain program integrity.
• Dues skimming just isn’t right. Many of these healthcare providers serve a family member or friend from their home. No parent should be coerced into paying a union just to care for their own disabled child.
• The current policy isn’t about care or improving care. Instead, money skimmed from care providers is used by the unions to further their own legislative and political interests, pay executives, and even cover administrative costs—things that have nothing to do with serving providers or the care recipients.

Thank you for your attention to this important matter and for making long-overdue changes that focus resources on the people who need them.