Illinois unions fight to block Medicaid savings

One of the screwier effects of Illinois labor law was on display recently when an arbitrator ruled that the state would have to terminate its contract with Maximus Health Services. In September 2012, the state hired Maximus to review Illinois’ Medicaid rolls and remove those who were no longer eligible for benefits. The company’s investigation identified 60,000...

One of the screwier effects of Illinois labor law was on display recently when an arbitrator ruled that the state would have to terminate its contract with Maximus Health Services.

In September 2012, the state hired Maximus to review Illinois’ Medicaid rolls and remove those who were no longer eligible for benefits. The company’s investigation identified 60,000 ineligible people on the rolls, but the American Federation of State, County and Municipal Employees objected and filed a grievance, saying that state workers should perform the Medicaid review instead, even though the state said it lacks the resources and its workers lack the knowledge to do the job properly. In the end, the arbitrator determined that the state has to fire Maximus by Dec. 31 and use state workers.

It would be easy to criticize the union for its selfishness — and I don’t necessarily want to discourage any of that – but it should be said that the union’s reaction was exactly what the state’s labor law encourages. Because the law allows for contracts in which all employees must pay either union dues or agency fees as a condition of employment, the union has a direct interest in maximizing the number of employees that the state has on its payroll. And under its own law, the state must reach an agreement not only on wages but on all aspects of employment, including how state workers are assigned. This means the union can wage a protest not just over how its members are employed, but over how they are not employed (“Hey, that’s our job!”).

So while this recent development might be frustrating, it shouldn’t come as a surprise when a union objects to the state hiring a private firm to do valuable work that the union might want a piece of. Governing with powerful unions can turn into a game of “Mother May I?” in which the state must get permission, either from the union or an arbitrator, to do even fairly common sense things such as hiring specialists to do specialized but important tasks.

The state of Illinois really shouldn’t be playing this game. Its labor law gives union officials too much influence over how governments in Illinois operate. At a bare minimum, the state should establish that elected officials will decide what work will be done in-house and what work will be outsourced without any bargaining. Michigan did something similar for public school districts, and the savings have been pretty substantial. This is an area where the General Assembly should be prepared to take decisive action next year.