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Medicaid Is A Slush Fund For Labor And The Left
Medicaid, like its first cousins, Medicare and Social Security, has long been recognized as the Third Rail of the nation’s politics for its ability to instantly terminate the career of anyone reckless enough to tamper with a benefit to which millions of Americans in need have been assured they are entitled.
But the program is equally untouchable where government employee unions and their allies on the political Left are concerned because it offers an enormous slush fund to which only they have access.
Here’s how it works: In return for providing basic home health assistance to elderly and low-income Americans — usually a friend or family member — designated caregivers can receive a monthly stipend from Medicaid.
Years ago, union leaders and politicians in primarily blue states devised a legal scheme by which this Medicaid payment meant the caregiver was considered a “public employee” and, thus, subject to his or her state’s rules regarding the mandatory deduction of union dues or fees from their pay.
Even though the U.S. Supreme Court has since affirmed the right of caregivers to decline union membership and dues, many blue states make opting out of union dues payments needlessly difficult in order to preserve the roughly $200-million-a-year windfall in Medicaid funds still flowing into union coffers.
To cite just the most egregious example, in the 1990s, California became the first state to provide for the unionization of homecare workers.
Today, these “individual providers” (IPs) serve Medicaid clients through the state’s In-Home Supportive Services (IHSS) program and are represented by either the Service Employees International Union (SEIU) Local 2015 or United Domestic Workers (UDW) Local 3930.
To put the matter in perspective, SEIU 2015 now claims to be one of the largest unions in California, raking in more than $114 million in dues last year alone from its nearly 250,000 members.
Again, IPs cannot be forced to join a union. In 2014, the U.S. Supreme Court issued a ruling in Harris v. Quinn affirming that Medicaid-compensated individual caregivers are “quasi-public employees” and not subject to state laws making union membership and dues a condition of government employment.
Four years later, in Janus v. AFSCME, the justices recognized that the same First Amendment right applies to all public employees.
Since then, hundreds of thousands of government workers have left their unions, but the overwhelming majority remain in the fold either because they: A.) want to; B.) haven’t heard about the court rulings; or, C.) have been misled or browbeaten by the unions into believing their participation is still mandatory.
Unlike traditional government employees, homecare providers like IPs, by definition, work from a private home (often their own), and their “employer” is the friend or family member they look after.
Consequently, the unions representing IPs seldom have any real grievances regarding their workplace or employer, concentrating instead only on compensation.
And yet they charge some of the highest dues rates in all of organized labor.
Members of SEIU 2015, for example, see a whopping 3% of their gross wages deducted from their Medicaid payments.
This outrageous dues rate, combined with limited representational obligations, leaves unions with more money than they know what to do with.
For its part, SEIU 2015 reported cash reserves of more than $142 million at the end of 2024.
According to the union’s own accounting, less than one-fifth of the money the union collects from members goes towards representational activity. Much of the rest is devoted to advancing far-Left political candidates and causes.
In 2024, SEIU 2015 reported spending $6.4 million on politics, lobbying, and contributions, including $35,000 to the California Democratic Party, $451,000 to California Democratic Party county committees, and $25,000 to Equality California, the “nation’s largest statewide LGBTQ+ civil rights organization.”
In addition, SEIU 2015 paid $40.7 million in affiliation fees to SEIU California and the SEIU international headquarters in Washington, D.C., to fund their equally radical political activism.
UDW was no less profligate. The union collected more than $35 million in 2022 from its more than 78,000 members, who surrendered 3.5% of their gross Medicaid reimbursements — even more than their SEIU 2015 counterparts.
UDW reported spending close to $3 million on politics, lobbying, and contributions in 2022, the last year for which data is available.
Finally, UDW pays about $12 million in affiliation fees each year to its parent organization, the American Federation of State, County and Municipal Employees (AFSCME), in Washington, D.C., underwriting the international union’s uber-progressive political agenda.
Small wonder the alliance between labor and the Left continues to treat every worker defection as an existential threat. It is.
Stripped of this Medicaid-funded, taxpayer-underwritten war chest and forced to support their failed candidates and causes solely through voluntary donations from people who actually agree with them, unions and their pet politicians would face an even bleaker future than the one already confronting them.
The law has always intended for Medicaid payments to be made directly and in full to Medicaid providers, but government unions have figured out a way to use it as a slush fund for Left-wing politics.
President Trump has the ability to end this scheme by implementing a rule change to uphold the integrity of federal Medicaid laws and stop the diversion of Medicaid funds to unions.
* * *
Aaron Withe is the CEO of the Freedom Foundation, a group dedicated to combatting government unions. He is the author of the book “Freedom is the Foundation: How We Are Defeating Progressive Tyranny By Taking On The Government Unions”
Stephen Moore is a former senior Trump economic advisor and co-founder of Unleash Prosperity.
The views expressed in this piece are those of the authors and do not necessarily represent those of The Daily Wire.
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