New York governor Kathy Hochul told Bloomberg that the state’s Medicaid program is being abused to the point that it accounts for most of the increase in jobs in New York City over the past year.
The Consumer Directed Personal Assistance Program (CDPAP) is advertised to New Yorkers as “Get paid to care for your loved ones.” It is funded through Medicaid and is one of many similar state-level programs that fund home-health-care providers. It essentially allows people to hire their family and friends to be their care providers, with their wages paid through Medicaid.
“I’m telling you right now, when you look on TikTok and you see ads of young people saying, ‘Guess what, you can make $37 an hour by sitting home with your Grandma. You know, here’s how you sign up,’ — it has become a racket,” Hochul said. She called it “one of the most abused programs in the entire history of the state of New York.”
“Budget officials published documents in April showing that almost all of the jobs added in the city in the 12 months ended March were in the home-health industry,” Bloomberg reported. “Without those gains, the city’s total private sector jobs would have contracted over the year.”
New York made eligibility rules for CDPAP less stringent in 2015, and since then, the number of people receiving care through the program has increased from 20,000 to 250,000. Medicaid spending on the program tripled in the past five years. Home-health jobs now account for 12 percent of New York City’s private-sector jobs, the Bloomberg story says.
The Service Employees International Union has been a driving force behind the expansion of home-health programs through Medicaid. By classifying family members caring for loved ones as employees and paying them through a welfare program, the SEIU can then unionize them, which it has done successfully in many cases. Former SEIU president Andy Stern championed this organizing approach in the 1990s and 2000s.
By the time Stern retired in 2010, the SEIU had gained 1.2 million members at the same time union membership in the country at large continued its decades-long decline. It did so mostly not by persuading workers to join, but by convincing politicians to reclassify home-health workers, previously considered independent contractors, as employees of Medicaid or of local governments. Then, it pressured the politicians — who, in many cases, it helped elect — to recognize the SEIU as the bargaining agent for the newly invented class of employees.
For years, organizing home-health workers also meant the SEIU could take dues without workers’ consent. The 2014 Supreme Court case Harris v. Quinn made that practice illegal, citing workers’ First Amendment rights to refuse to support speech they did not agree with. The case was a forerunner to Janus v. AFSCME in 2018, which applied similar reasoning in a ruling that protected all public employees nationwide.
Bill Hammond of the Empire Center for Public Policy, a state-based free-market think tank, has noted a new tactic the SEIU has used with home-health providers. If it can’t get forced dues, it at least wants the state to pick up the tab for providing home-health workers with health insurance. The SEIU’s benefit fund has been running deficits, so the union successfully pressured Hochul to allow more of its home-health members to receive health insurance through the state-run Essential Plan. The SEIU will still collect employer contributions to the fund for all union-represented workers, even if they receive their health insurance through the Essential Plan.
Hammond has also noted how the SEIU sought to make organizing easier by lobbying the New York state government to consolidate payroll processing for all home-health workers under one statewide intermediary. Beneficiaries opposed the reorganization, but it would be easier for the SEIU to negotiate with one intermediary rather than with the hundreds that currently exist in the program.
The CDPAP is indeed a racket, in more ways than Hochul will likely admit. SEIU Local 1199, which represents New York home-health workers, endorsed Hochul for governor in 2022, and the SEIU gave over $500,000 to her campaign. But at least she is speaking out about one aspect of the program’s abuses.