Earlier this month, the Trump administration announced a new rule barring home health care workers from paying union dues through their Medicaid-funded wages. The new Department of Health and Human Services rule, which will impact more than 800,000 workers and was immediately met with a legal challenge, followed years of planning by anti-union activists to promote such measures in states across the country, and, more recently, on the federal level.
In anticipation of a crushing blow to public-sector unions by the U.S. Supreme Court last summer, conservative groups ramped up their efforts to bring the federal government’s attention to the issue of Medicaid-funded union dues, according to an audio recording obtained by The Intercept and Documented.
On an invitation-only call with donors last June, leaders with the State Policy Network — a corporate-backed umbrella group of right-wing think tanks across the country — raised the issue of directly deducting union dues from Medicaid-funded paychecks, what they call “dues-skimming.” Vinnie Vernuccio, a labor policy adviser to the State Policy Network told donors that its plan was to end this practice by getting “an administrative rule passed at Health and Human Services” and passing federal legislation with the assistance of Rep. Cathy McMorris Rodgers, R-Wash.
The legislation has not yet come — despite a promise from McMorris Rodgers announced at the start of 2018 that she would introduce a bill to this effect. The Department of Health and Human Services, however, announced less than two months after the call that it would consider amending its Obama-era rule, which it ultimately did this May. On the call, Vernuccio touted that the State Policy Network “is the only group that’s driving this effort at a national level.” A spokesperson for McMorris Rodgers did not respond to requests for comment.
Others on the call were Rebecca Painter, the vice president of development for SPN; Tracie Sharp, the president and CEO; Todd Davidson, the senior director of strategic development for the network; and Jennifer Butler, an SPN senior policy adviser. None of the five call leaders returned The Intercept’s requests for comment. Instead, SPN spokesperson Carrie Conko reached out and said she would address any inquiries. She wrote in an email that her coalition plans to keep fighting in Washington “on behalf of those who would rather not see their hard earned money siphoned from their paychecks and into big union’s political and lobbying activities.”
The 45-minute call came about two weeks before the Supreme Court’s ruling in Janus v. AFSCME, which struck down public-sector unions’ ability to charge fees to nonmembers who benefit from collective bargaining. SPN leaders voiced optimism that the case would bring them positive results.
“Once the government union barrier is removed, everything else that matters to everyone on this call so much is that much closer within reach.”
“I want you to know that later this month, or any day now, the chances are good that we may actually have this unprecedented opportunity with the Janus Supreme Court case decision,” Sharp told her donors. “If it comes down on our side, of course, it makes every state a ‘right-to-work’ state. And so we have the opportunity to change the way the left funds everything that you and I disagree with.” At a different point on the call, she said, “Once this ruling comes down — and we do expect it to come down in our favor — everything will change. The door to pass a dream list of free-market reforms is going to swing open for us.” Vernuccio agreed. “Once the government union barrier is removed, everything else that matters to everyone on this call so much is that much closer within reach,” he said.
With a Janus victory in sight, an emboldened State Policy Network looked ahead to next steps, particularly taking the dues-skim fight from the states to Washington, D.C. SPN could “devolve power back to the states, communities, and most importantly, back to individuals,” Butler explained to the donors. “By harnessing all our expertise and all the resources at the federal level, we can stop this nationwide,” Vernuccio added. “So nothing really illustrates the power of SPN and the network better than what[‘s] gonna soon be a victory on the dues-skim.”
The State Policy Network’s first win on the dues-skim came in early 2013, just as Michigan became a “right-to-work” state. The SPN organization in Michigan, the Mackinac Center for Public Policy, convinced state lawmakers and Republican Gov. Rick Snyder to eliminate the ability of child care providers and home health care workers to deduct union dues from their paychecks.
The financial result has been devastating for unions: In the past seven years, SEIU Healthcare Michigan has seen an 84 percent drop membership and a 74 percent drop in revenue. Its political spending has also seen a major decline, from $3.5 million on lobbying and politics in 2012, to just $290,000 in 2016.
SEIU Healthcare Michigan spokesperson Adam Bingman told The Intercept that the rollback of protections for home health care workers has exacerbated the care crisis in his state. He’d recently gotten “two different calls from independent providers” who said they’re struggling to find qualified home health care workers. “The lack of union membership and the assault on home care workers, and those who rely on those services, has really hurt the ability to attract dedicated qualified home care professionals,” he said. According to Bingman, many home care workers have left to go work in nursing homes or find alternative employment.
While Michigan provided conservative activists a proof point of what’s possible with regards to weakening home health care unions, Republicans soon realized that passing similar measures in other states would not be as easy. “In Michigan, the Mackinac Center hit it out of the park; they stopped it,” said Vernuccio on the donor call. “But in a lot of other states, the political winds just simply didn’t align.”
“The lack of union membership and the assault on home care workers, and those who rely on those services, has really hurt the ability to attract dedicated qualified home care professionals.”
Facing state-level opposition, the same conservative activists known for railing against federal intervention decided the time was necessary for federal intervention. Vernuccio explained how SPN “saw an opportunity to … harness everything that we learned” in Michigan and other states around stopping the so-called dues-skim and to bring that knowledge to D.C. “This means that states like California, Washington, Illinois that would need a huge political sea change to stop the skim at the state level will now have it stopped in D.C.,” he told the donors. “It also means that we’re focusing the firepower of the donations of people on the call and across the country — that instead of fighting an uphill battle in these states, we can win more quickly and more easily in Washington, D.C.”
Butler then shared that she had been taking caregivers to Congress to tell lawmakers how they’ve been affected by the dues-skim and unions. She cited a nearly half-hourlong meeting they had with Sen. Tim Scott, R-S.C., a few months prior. Federal disclosures show that Butler, on behalf of SPN, has lobbied the Senate, the House of Representatives, and Health and Human Services with the stated goal of ending the Medicaid dues-skim.
In April 2018, Sen. Ron Johnson, R-Wisc, chair of the Senate Committee on Homeland Security and Government Affairs, sent a letter to Centers for Medicare and Medicaid Services Administrator Seema Verma requesting that she look into the dues-skimming situation. His letter said that unions in 11 states were able to skim an estimated $200 million in Medicaid payments each year, a statistic he attributed to a 2017 Mackinac Center policy brief. By August, Verma had announced that her agency was reconsidering the rule, and both Johnson and McMorris Rodgers submitted comments in favor of changing it.
The Mackinac Center cheered the Trump administration’s new rule, finally announced on May 2. “Ever since the Mackinac Center learned a decade ago of unions skimming funds from those caring for society’s most vulnerable — and in many cases, their own ailing family members — we began to actively seek to end this abhorrent practice,” said Joseph Lehman, the center’s president, in a statement. “This illegitimate action, negotiated between government and big unions, cost Michigan caregivers tens of millions of dollars. We were proud to litigate and bring an end to this practice for Michigan residents providing care to the disabled. Now, we celebrate with caregivers across the country who are finally afforded the same relief.”
A PowerPoint presentation prepared by Heart+Mind Strategies for the State Policy Network in October 2017, and obtained by The Intercept and Documented, details carefully tested message research to help Republicans craft their talking points on this issue for lawmakers and the public. The research was conducted through a 25-minute online national survey between October 5 and 13, 2017, with over-samples in Texas, Illinois, Ohio, and Pennsylvania.
A “key messaging takeaway,” the consultants advised, was to be sure to not attack unions directly, as “they are seen positively by Americans” and most respondents “describe unions as fighting for higher wages and better benefits.” Only a minority of respondents, the consultants found, associate unions with “negative descriptors like corrupt, harmful, and dangerous.”
While the consultants acknowledged that “government labor unions” was the most effective way to negatively describe unions, even then they admitted that support for “government labor unions” was more positive than not. Still, the consultants said, “there are large groups of neutral Americans who can be moved on the issue.”
When it came to the dues-skimming issue, the consultants reported encouraging results for the Republican activists, saying that more than half of Americans oppose direct dues payments for government-funded home care workers and child care providers, and just half had existing knowledge of the policies. They found that most Americans have negative associations with the phrase “dues-skimming” — even before learning what it means.
To successfully fight direct union payments from child care workers and home care workers, the consultants advised activists to use messaging that included phrases like “as a condition of employment” or “forced to pay.” They also recommended focusing on language about taking money dedicated to people with disabilities and to avoid language around “growing the union’s treasure chest.” Coincidentally or not, the Department of Health and Human Services issued its new rule on similar lines, denying that it would interfere with voluntary union dues and insisting that it “in no way prevents” health care workers from paying dues to a union.
The Heart+Mind Strategies consultants also polled support for going through Health and Human Services to end the practice of union workers directly deducting their dues, and respondents supported the idea of the department sending a letter to states demanding that they end the practice by a 12-to-1 margin. This resembles the course of action the federal government ultimately pursued.
Conko, the SPN spokesperson, told The Intercept that the research from the PowerPoint presentation shows “that the general public agrees with us” about “right-to-work” laws and the Obama-era rule that allowed health home care workers to deduct union dues from their paychecks. Conko said the research was shared with state think tanks across the country and on SPN’s website, along with stories of workers “who wanted policymakers and others to know how the union’s practices were unfair and not always transparent.”
The messaging tips were consistent with SPN’s practices that The Intercept has previously reported on. The network has advised its member groups to avoid lodging direct attacks on unions because unions remain highly popular. Instead, SPN urged its state affiliates to stress that their efforts are about protecting workers’ “First Amendment rights of free speech and freedom of association.”
Bingman of SEIU Healthcare Michigan said the dramatic attacks on workers’ rights have “ultimately underlined that elections have consequences.” He pointed to the election of Democratic Gov. Gretchen Whitmer in November and said that his union, “along with organized labor, are really looking forward to changing things both here in Michigan and on the federal level.”
Correction: June 3, 2019
This story initially reported that Sen. Johnson warned in a letter of $200,000 in skimming from Medicaid. The figure is $200 million.