Skimming Hurts California’s Most Vulnerable

Skimming is not a union practice that went out when the closing credits for “On The Waterfront” first rolled in 1954. It’s still alive today. And it’s hurting some of California’s most vulnerable residents, while at the same time stuffing the treasury of politically powerful unions and financially exploiting those who care for the sick, disabled and elderly.

Caregivers, or home health-care workers, generally fall into two categories. There are informal caregivers, who, according to the Caregivers Alliance are those “involved in assisting others with activities of daily living and/or medical tasks.” This includes spouses, family members, friends, and neighbors. Some of the services they provide are as simple as companionship, checking in with telephone calls, offering emotional support, assisting at mealtimes, and helping the feeble bathe and move around their homes. Samuel Han, the Freedom Foundation’s California director, says that these home health care workers “often make enormous personal sacrifices” to help.

There are also “formal” caregivers who provide services in the home or in a care setting. They work for private care agencies that are reimbursed through Medicaid payments. In California, many of these agencies have been organized and the caregivers must pay union dues as a condition of their employment, since this is not a right-to-work state.

Though informal caregivers, also known as individual providers, are not employed by agencies, they cannot avoid the union label nor escape unions’ grasping hands. Nor are the weak, poor and infirmed free of the union grip.

According to state law, paid informal caregivers — there about 300,000 in California — are public employees. This is not for their benefit. It’s only for the purposes of unionization, says Maxford Nelsen, director of labor policy for the Freedom Foundation. Consequently, union dues are deducted directly from Medicaid payments made to those the caregivers serve and never reach them nor the recipients. It’s big money for union bosses.

“The two unions that represent individual providers in California — SEIU 2015 and United Domestic Workers/AFSCME 3930 — collected a combined total of $96.6 million in dues from caregivers in 2016, according to federal reports the unions file with the U.S. Dept. of Labor,” says Nelsen.

So the unions get fat at the expense of the roughly half a million Californians who need home health care but don’t get the full benefits of their coverage because “skimming funds directly from Medicaid payments takes resources from a fixed pot of money that is meant to help the disabled,” Sam Adolphsen says in a Mackinac Center policy paper.

Redirecting Medicaid payments toward union dues also “contributes to the home health-care worker shortage,” he adds, which “could lead to an increase in institutional care, which is more costly for taxpayers and less favorable for Medicaid-eligible individuals.”

While the “issue was created by and could be solved by state law,” says Nelsen, Washington could bring relief in the 12 states where skimming occurs. Adolphsen’s paper says that the Health and Human Services Secretary could issue a letter to each state that would essentially force them to end the practice. States refusing to comply could lose the waiver that allows their Medicaid-eligible residents to use benefits for in-home care, leaving more-costly institutional care or no care at all their only options.

Adolphsen says that Washington could also “adopt new rules that explicitly ban the use of Medicaid funds for union dues or fees.”

Meanwhile, Sacramento seems to have little interest in ending the skimming. Nelsen believes he knows why.

“The powers that be would prefer to leave the scheme in place because a large percentage of the funds unions skim from Medicaid payments find their way into politicians’ coffers,” he says.

It’s lawmakers’ chumminess with unions that resulted in a California law requiring new caregivers to suffer through a 30-minute session with union organizers who aggressively pressure them to join. Nelsen says new caregivers in the Freedom Foundation’s home state of Washington who’ve been through the sessions have reported being driven to tears by organizers’ rude and bullying behavior.

With unions receiving that depth of favoritism, fairness demands that the new caregivers be advised that once sucked in, it’s not easy to leave. Those who have signed a union card but want to stop paying dues can opt out only during a 10-day window each year. That’s indefensible by any understanding of what is just. But it makes clear that Sacramento prefers its union allies over the sick, poor and disabled, and those who need their care.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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