A study to be released next week challenges the claim of some Michigan lawmakers that by adopting the Obamacare Medicaid expansion states can gain greater flexibility in reforming the medical welfare program, which is operated as a state-federal partnership.

The report is a joint project of Michigan's Mackinac Center for Public Policy and Ohio’s Buckeye Institute for Public Policy Solutions, and is co-authored by Buckeye President Robert Alt and visiting fellow Nathaniel Stewart. The authors were assisted by Ed Haislmaier, senior health care policy researcher at the Heritage Foundation in Washington, D.C.

"It is unrealistic to assume that the Obama administration will weaken the Medicaid requirements that they fought so hard to get," Alt said. "No state should expand Medicaid based upon the illusory hopes of waivers, which are inadequate to genuinely reform Medicaid's ills."

In the study, Alt and Stewart explain how relying on waivers to operate a more flexible and cost-effective Medicaid program may be "illusory."

The authors write: "[R]eliance on waivers as a source of long-term flexibility to reform the operation of Medicaid programs is ill-placed, and trading expansion for waivers is a risky bargain for states."

The Michigan Senate may vote to implement the Obamacare Medicaid expansion as early as next week. The State House passed it earlier this summer. At least 19 states have rejected the expansion and several more are leaning that way.

This summer a Senate work group made some changes to the House-passed bill. Both versions would require the state to seek permission from the federal government for waivers to implement various Medicaid reforms, including modest copays and a four-year cap on benefits.

The Mackinac/Buckeye study provides three reasons to believe that even if waivers are initially granted, they are unlikely to provide the foundation for genuine and permanent reforms.

First, Medicaid waivers are "designed to be temporary," meaning legislators would be expanding the program in return for reforms that may have to be retracted later.

Second, waivers are "highly discretionary" on the part of officials in the Obama administration and the federal Department of Health and Human Services, which will only grant them to the extent they are in accord with the policy goals of the Patient Protection and Affordable Care Act and Social Security Act.

Third, waivers are also subject to judicial review, even after they've been approved by federal officials.

For these reasons, the study says, it's unlikely that waivers will work to sufficiently offset the costs of expanding Medicaid. 

The paper supports these assertions by describing the experience of a number of states that have recently been denied waivers to modify their Medicaid programs, or even to continue existing reforms, including Oklahoma, Indiana, Arizona, California, Florida and Connecticut.

"Just as it would be imprudent for anyone to enter into a legally enforceable written contract with the expectation that the he can later persuade the other party to waive parts that are no longer preferable, likewise agreeing to expand Medicaid ... based upon the hopes of procuring future waiver concessions is ill-advised," the study says.

"Any decision to accept the Medicaid expansion today should not be based on the illusory promise of a federal waiver tomorrow," the study concludes.

The Mackinac Center Legal Foundation filed a lawsuit Thursday on behalf of four former Teamsters union workers who say charging them a fee to file a grievance because they opted out of paying dues is in violation of the right-to-work law passed in December.

Teamsters Local 214 in the city of Dearborn said effective July 1, it would charge $150 to employees who opted out of paying union dues to file a grievance, according to the lawsuit. The four workers being represented by the Mackinac Center Legal Foundation are city of Dearborn employees.

"I was waiting for [right-to-work] for a long time," said Fred Armstrong, one of the plaintiffs in the case. "I was happy when it happened. I was the first one out of the union.

"They really weren't helping me much," Armstrong added. "Things they said they could do, I wound up doing myself."

Maria Santiago-Powell agreed.

"I used to be very active in the union," she said. "And by my being active, I saw the lack of work that they were doing for us."

But the union made it very difficult to leave, adding fees and obstacles. So the employees, along with co-workers Shawn Koskyn and Greg Andrews, filed their lawsuit.

The lawsuit contends that even though the four employees no longer pay dues, they still are forced to be represented by the union.

In a press release, The Mackinac Center Legal Foundation cited a 1944 U.S. Supreme Court decision that ruled unions must represent all of its members "fairly and without discrimination." The lawsuit also says that charging the fee to file a grievance violates Michigan's Public Employment Relations Act.

"This policy flies in the face of seven decades of Supreme Court precedence and five decades of Michigan labor law," said Derk Wilcox, senior attorney for the Mackinac Center Legal Foundation, in a press release.

Unions have long advocated to be the sole representatives in a workplace, which means they represent every worker and it gives them a stronger bargaining position with employers. The courts and legislatures have often agreed, but with that comes the responsibility of representing everyone.

"Our clients are simply following the law and we think the union should, too. Unions are granted a monopoly because they are the exclusive representative," Wilcox said. "The price of that monopoly is that they have to represent all workers equally, even those who exercise their worker freedom rights."

Teamsters Local 214 Business Representative Mark Gaffney didn't immediately respond to a message left with a secretary.

David Nacht, an Ann Arbor private attorney who specializes in labor law, said in an email he hasn't reviewed case law under the National Labor Relations Act or other state labor laws to determine if courts have imposed burdens similar to what the plaintiffs seek in other right-to-work jurisdictions, but he said he thought the claims by the plaintiffs seemed unfair.

"The lawsuit seems to suggest that unions have an obligation to provide grievance representation for employees who aren't paying for the union to provide those services," Nacht said. "Unions, like companies, or any other entity, have to cover their costs. In general, the Mackinac Center is opposed to government regulation that imposes regulatory burdens on the private sector. In this case, however, the Center is asking the courts to interpret the state law to impose a significant burden on a private entity, which is what unions are, without getting paid for it. I think a court is going to have trouble finding that position to be reasonable. Why should some public employees get for free what others have to pay for? That’s not fair."

The four plaintiffs in the case are asking the court to void the union policy that says non-members are required to pay a special fee to process grievances.

"The union is a private entity that is given a lucrative monopoly by the government," Wilcox said. "In exchange for this lucrative monopoly the Teamsters must represent all members in the bargaining unit without discrimination. It is the Teamsters who are trying to freeload by saying 'we want our exclusive monopoly, but we don't want to have to pay for it.' "

(Editor's note: This story has been updated with additional information obtained since its original posting.) 

~~~~~

Here are the employees discussing the lawsuit: