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What is Hiding in the CLASS Act? Ron Greiner Interviewed
October 27, 2010
Mike Siegel interviews Ron Greiner of StopObamaCare101.com to discuss the hidden payroll tax that is set to hit paycheck in Jan 2011.
What is this tax?
Transcript:
Siegel: Well, folks, welcome back in to the program. Good to have you with us. Mike Siegel here as we are at the BOSS Business Hour. It is a pleasure to be with all of you as we continue the conversation. We switch gears to something that will be of major conversation for a very long time, probably until 2014 at least, maybe sooner if the United States Supreme Court gets the court earlier and decides that Obama Care is unconstitutional, but in the middle of all of this some of it is taking effect already. For example, Section 8002 is a new payroll tax that is going to hit all American employees beginning on January 1, 2011, which is actually just a couple of months from now. It was placed in Obama Care to actually make the legislation appear to cost almost 100 billion dollars less than the true cost. In other words, it is great that they are going to make it 100 billion less, but how are they doing that? It is a shuffle game. They are taking the money out of your pocket in order to pay for Obama Care. So, in effect it becomes a tax. It is a pleasure to have here with us a gentleman who knows a good deal about this, Ron Griener, of stopobamacare101.com. Mr. Griener, thanks for being with us. How are you today?
Ron: Hey, it is great to be with you, Mike.
Siegel: Thank you very much. Let's talk about this, because it is frankly very scary that a lot of this is going to take effect coming sort of under the radar, people not knowing about it. Is this just one tax that is taking effect that may be followed by many others that in effect cut money out of the people's pocket, that we wind up paying for this thing. Employers, of course, small businesses, are majorly impacted by this. What about that?
Ron: Well, the way it is going to happen is the government is going to ask the employers to participate and the employers are the ones that get to choose. So, if the employer decides that t hey want to participate, then all employees are automatically enrolled into this new payroll tax. The only way an employee can get out of it is if they specifically opt out.
Siegel: If its like the Massachusetts plan, if they opt out, is the employer then not fined and that money is put into a pool with the federal government level. Doesn't the employer have to be pay anyway?
Ron: Well, like a lot of the programs, like social security was voluntary when it started, and this program is voluntary as it starts. It is meant to pay for long term care benefits. Because that is quite a program with the baby boomers as they age and the government does not have enough money to pay for it. So, now the people, the workers, are going to have the opportunity to deposit money into this long term care program, a trust fund from the United States government, and the interesting thing is that if the money goes in there is no benefits that come out for a period of five years. So, all money goes into this trust fund, and you know what the government does with trust funds that they have, they just raid that money and then they use it for Medicaid expansion. So, when it comes time to actually make a payment for long term care, then they are going to have to go back to the tax payers and have the tax payers pay it off again, because all that will be in the trust fund are IOUs.
Siegel: Well that is what they did with social security as well, as you know, so that is a model that has already been there. What does this do to small business in this regard with that particular tax?
Ron: Well, what I recommend is for everyone to opt out of this thing and, you know, I wouldn't give money to this trust fund. There are no benefits for a period of five years. That means if someone is paying into it, and if they are paying in 200 a month for example, they don't even know how much it is going to cost yet. But, if you are paying 200$ a month and then you flip your car seven times and you need long term care, there is no benefit for a period of five years. Where in the free and open market, at stopobamacare101.com, people can get quotes on long term care insurance and those benefits start immediately.
Siegel: Slow down a minute. I am not clear on what you are talking about here. The 100 billion dollar that we are talking about that will commend beginning January 1, 2011, as a payroll tax…. Just answer the questions I ask. Is it correct that the payroll tax is supposed to directly go toward a trust fund for long term care? Is that what that tax is for?
Ron: Exactly.
Siegel: Okay. So, now we are supposed to have a trust fund created for long term care. As you point out, it doesn't take affect for five years. Why would they allow people to opt out, since the system wouldn't work with people opting out, because you need the money in in order to pay for the long term care. So, why would they allow an opt out provision?
Ron: Well, they are allowing the opt out provision. The reason they made it available was so the congressional budget office, the CBO, would score it and they guesstimate that it will bring in all this money, 100 billion dollars. With this guess, that makes Obama Care cost 100 billion dollars less.
Siegel: Alright. So, is the program that we are talking about under Obama Care, the community living distance services as support program? Is that what we are talking about?
Ron: Yes. The Class Act.
Siegel: Okay. That program is the long term program. Is that correct?
Ron: That is correct.
Siegel: Conrad of North Dakota, even he is a democrat, has called this a Ponsi scheme of the first order. "The kind of thing Bernie Madoff would have been proud of." Is that correct?
Ron: That is absolutely correct, and Conrad he shares the budget committee in the Senate. So, coming from him I think that has special emphasis on that statement.
Siegel: Alright. So, then if we have this situation, and by the way long term care could break the back of this entire program because Medicaid, which is where the long term care would come from under the federal government, could cause the states to go into a situation of collapse. We have 11 states right now that are on the verge of losing the ability to pay their pensions because their pension funds for retired public employees are running out. Eleven states are within a matter of a decade or less are going to run out of money. What is this going to do to the states, if we leave this program in place and have Medicaid be the way in which long term care is paid for?
Ron: That is exactly correct. What happens today, if one person, a couple let's say, 70-year-old, and the husband has a stroke. He goes into the nursing home and they spend down until they have 2000$ and then now they qualify for Medicaid and Medicaid pays the balance of the bills. So, what they are trying to do here is to save Medicaid by people purchasing long term care insurance, so that they don't go on Medicaid.
Siegel: Okay. Can an individual just as an employee…. is it an opt out system where you sign an opt out form with your employer and then you opt out of this payroll tax that starts January 1st?
Ron: Exactly.
Siegel: Okay. So, if they have that opt out…theoretically, what if every employee opted out? Then what? I mean, the program would be as a matter of course, it would be nullified by the people opting out, would it not?
Ron: That is exactly correct and then the CBO guessed wrong and then the cost of Obama Care jumps 100 billion dollars.
Siegel: Got you, and that is because the government would still fund it but they would not be getting the payroll tax deduction to fund it with. They would have to find the money some place else. Is that correct?
Ron: Well, they wouldn't have the money for Medicaid expansion. Because they are going to raid the trust fund for Medicaid expansion. Medicaid in the State of New York costs $10,000 per person per year. A family of four would cost $40,000.
Siegel: So, my suggestion for people out there listening who own small businesses is that they get involved in understanding this, talk to their employees, specifically small businesses, about what the options are and make sure that people have other options prior to January 1st, so that they can then opt out and know that they are going to be protected anyway. The website, by the way, is stopobamacare101.com. Mr. Griener, thank you very much. I think this is an incredibly important point and that people can get into private purchase of long term care, kind of public/private partnership, rather than having this payroll tax pay for it and be delayed for five years. Good to have you on the program, Sir.
Ron: It was great being with you, Mike.
Siegel: Ron Greiner, stopobamacare101.com. You small business owners are going to have to deal with this and understand it, and this is one way you can do that. Mike Siegel here. Be proactive on this. Show people alternatives so that they can opt out. More to come. Stay with us.
What is this tax?
Transcript:
Siegel: Well, folks, welcome back in to the program. Good to have you with us. Mike Siegel here as we are at the BOSS Business Hour. It is a pleasure to be with all of you as we continue the conversation. We switch gears to something that will be of major conversation for a very long time, probably until 2014 at least, maybe sooner if the United States Supreme Court gets the court earlier and decides that Obama Care is unconstitutional, but in the middle of all of this some of it is taking effect already. For example, Section 8002 is a new payroll tax that is going to hit all American employees beginning on January 1, 2011, which is actually just a couple of months from now. It was placed in Obama Care to actually make the legislation appear to cost almost 100 billion dollars less than the true cost. In other words, it is great that they are going to make it 100 billion less, but how are they doing that? It is a shuffle game. They are taking the money out of your pocket in order to pay for Obama Care. So, in effect it becomes a tax. It is a pleasure to have here with us a gentleman who knows a good deal about this, Ron Griener, of stopobamacare101.com. Mr. Griener, thanks for being with us. How are you today?
Ron: Hey, it is great to be with you, Mike.
Siegel: Thank you very much. Let's talk about this, because it is frankly very scary that a lot of this is going to take effect coming sort of under the radar, people not knowing about it. Is this just one tax that is taking effect that may be followed by many others that in effect cut money out of the people's pocket, that we wind up paying for this thing. Employers, of course, small businesses, are majorly impacted by this. What about that?
Ron: Well, the way it is going to happen is the government is going to ask the employers to participate and the employers are the ones that get to choose. So, if the employer decides that t hey want to participate, then all employees are automatically enrolled into this new payroll tax. The only way an employee can get out of it is if they specifically opt out.
Siegel: If its like the Massachusetts plan, if they opt out, is the employer then not fined and that money is put into a pool with the federal government level. Doesn't the employer have to be pay anyway?
Ron: Well, like a lot of the programs, like social security was voluntary when it started, and this program is voluntary as it starts. It is meant to pay for long term care benefits. Because that is quite a program with the baby boomers as they age and the government does not have enough money to pay for it. So, now the people, the workers, are going to have the opportunity to deposit money into this long term care program, a trust fund from the United States government, and the interesting thing is that if the money goes in there is no benefits that come out for a period of five years. So, all money goes into this trust fund, and you know what the government does with trust funds that they have, they just raid that money and then they use it for Medicaid expansion. So, when it comes time to actually make a payment for long term care, then they are going to have to go back to the tax payers and have the tax payers pay it off again, because all that will be in the trust fund are IOUs.
Siegel: Well that is what they did with social security as well, as you know, so that is a model that has already been there. What does this do to small business in this regard with that particular tax?
Ron: Well, what I recommend is for everyone to opt out of this thing and, you know, I wouldn't give money to this trust fund. There are no benefits for a period of five years. That means if someone is paying into it, and if they are paying in 200 a month for example, they don't even know how much it is going to cost yet. But, if you are paying 200$ a month and then you flip your car seven times and you need long term care, there is no benefit for a period of five years. Where in the free and open market, at stopobamacare101.com, people can get quotes on long term care insurance and those benefits start immediately.
Siegel: Slow down a minute. I am not clear on what you are talking about here. The 100 billion dollar that we are talking about that will commend beginning January 1, 2011, as a payroll tax…. Just answer the questions I ask. Is it correct that the payroll tax is supposed to directly go toward a trust fund for long term care? Is that what that tax is for?
Ron: Exactly.
Siegel: Okay. So, now we are supposed to have a trust fund created for long term care. As you point out, it doesn't take affect for five years. Why would they allow people to opt out, since the system wouldn't work with people opting out, because you need the money in in order to pay for the long term care. So, why would they allow an opt out provision?
Ron: Well, they are allowing the opt out provision. The reason they made it available was so the congressional budget office, the CBO, would score it and they guesstimate that it will bring in all this money, 100 billion dollars. With this guess, that makes Obama Care cost 100 billion dollars less.
Siegel: Alright. So, is the program that we are talking about under Obama Care, the community living distance services as support program? Is that what we are talking about?
Ron: Yes. The Class Act.
Siegel: Okay. That program is the long term program. Is that correct?
Ron: That is correct.
Siegel: Conrad of North Dakota, even he is a democrat, has called this a Ponsi scheme of the first order. "The kind of thing Bernie Madoff would have been proud of." Is that correct?
Ron: That is absolutely correct, and Conrad he shares the budget committee in the Senate. So, coming from him I think that has special emphasis on that statement.
Siegel: Alright. So, then if we have this situation, and by the way long term care could break the back of this entire program because Medicaid, which is where the long term care would come from under the federal government, could cause the states to go into a situation of collapse. We have 11 states right now that are on the verge of losing the ability to pay their pensions because their pension funds for retired public employees are running out. Eleven states are within a matter of a decade or less are going to run out of money. What is this going to do to the states, if we leave this program in place and have Medicaid be the way in which long term care is paid for?
Ron: That is exactly correct. What happens today, if one person, a couple let's say, 70-year-old, and the husband has a stroke. He goes into the nursing home and they spend down until they have 2000$ and then now they qualify for Medicaid and Medicaid pays the balance of the bills. So, what they are trying to do here is to save Medicaid by people purchasing long term care insurance, so that they don't go on Medicaid.
Siegel: Okay. Can an individual just as an employee…. is it an opt out system where you sign an opt out form with your employer and then you opt out of this payroll tax that starts January 1st?
Ron: Exactly.
Siegel: Okay. So, if they have that opt out…theoretically, what if every employee opted out? Then what? I mean, the program would be as a matter of course, it would be nullified by the people opting out, would it not?
Ron: That is exactly correct and then the CBO guessed wrong and then the cost of Obama Care jumps 100 billion dollars.
Siegel: Got you, and that is because the government would still fund it but they would not be getting the payroll tax deduction to fund it with. They would have to find the money some place else. Is that correct?
Ron: Well, they wouldn't have the money for Medicaid expansion. Because they are going to raid the trust fund for Medicaid expansion. Medicaid in the State of New York costs $10,000 per person per year. A family of four would cost $40,000.
Siegel: So, my suggestion for people out there listening who own small businesses is that they get involved in understanding this, talk to their employees, specifically small businesses, about what the options are and make sure that people have other options prior to January 1st, so that they can then opt out and know that they are going to be protected anyway. The website, by the way, is stopobamacare101.com. Mr. Griener, thank you very much. I think this is an incredibly important point and that people can get into private purchase of long term care, kind of public/private partnership, rather than having this payroll tax pay for it and be delayed for five years. Good to have you on the program, Sir.
Ron: It was great being with you, Mike.
Siegel: Ron Greiner, stopobamacare101.com. You small business owners are going to have to deal with this and understand it, and this is one way you can do that. Mike Siegel here. Be proactive on this. Show people alternatives so that they can opt out. More to come. Stay with us.
