The year 2022 has begun. The United States of America has experienced its greatest economic contraction in history as a result of the COVID-19 pandemic.
As a result of the pandemic and the outbreak of the highly contagious Omicron variant – inflation is said to be above 6% in the United States of America. Furthermore, the cost-of-living adjustment is the highest it’s been for 40 years – sitting at 5.9%. However, Medicare costs have increased drastically. In addition to this Medicare Part B, premiums have increased by the largest amount in history – that is according to American Action Forum.
According to an article on CNBC entitled: “Here’s what to know about your 2022 Medicare costs”, written by Sarah O’Brien – cost adjustments can affect premiums, deductibles, and other cost-sharing aspects of Medicare.
In addition to this, according to Danielle Roberts, co-founder of insurance firm Boomer Benefits: “This year, it is especially important to be aware of the increasing costs of Medicare because it’s happening at a time where we are also experiencing inflation”.
Thus as the year begins, Medicare costs will also increase. According to CNBC, over 63 million citizens in the United States of America are beneficiaries of the Medicare program with most of them being 65 years or older.
What this means is a large proportion of the program’s beneficiaries rely on retirement social security benefits as well. Unfortunately, this means that the cost-of-living adjustment and the increase in social security benefits will largely be offset by an increase in Medicare and more specifically Medicare part B premiums. Let’s go into a few details you might need to know about the medicare scheme.
Medicare Part A
According to CNBC, most beneficiaries don’t pay any real premiums for Medicare part A – as they would have worked for a long enough period – this is 10 years or more and has paid sufficient payroll taxes. According to this article on CNBC, however, if this is not the case – Medicare Part A premiums can cost as much as $499. This has increased from $471 a month last year.
Medicare Part B
To continue, Medicare Part B premiums have increased a massive $21.60. The maximum Part B premium according to figures taken from CNBC is $170.10 up from $148.50 last year. This will offset most social security benefits this year quite substantially at a time when medical insurance and care are in much need as a result of the COVID-19 pandemic.
Lastly, according to CNBC – if a U.S. citizen does not have any medical coverage besides Medicare, they will be paying $1,556 for the first two months of hospital admission. This is up from $1,487 last year.
So to conclude, this year will see a massive increase in medical costs as a result of inflation caused by the COVID-19 pandemic has come at a very opportune time. Indeed, Medicare premiums have increased by a great amount leaving their 63 million beneficiaries most of whom are over 65 further cash strapped this year. Hopefully, the highly contagious variant of the COVID-19 virus will not continue to affect U.S. lives and the economy as much as the pandemic has over the last two years.
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Only 28% Of Americans View Economic Conditions Of Their Country As Excellent
The American economy has experienced much turmoil during the COVID-19 pandemic. Indeed, according to the Motley Fool, the United States of America’s economy has come a long way since the beginning of the pandemic.
Of course, the pandemic sore the unemployment level in the year 2020 reaching a record high. In addition to this, finding work during this period has been extremely difficult. As such, the federal government issued various stimulus and COVID relief payments and credits and unemployment benefits to combat the effects of the pandemic.
The State Of U.S. Economy
Currently, the American economy is has a 7.5% inflation rate or consumer price index. This has surpassed the 40-year record high since 1982, that is, since last month. However, besides this – the unemployment rate has decreased, and it seems the United States of America is ‘getting back to work,’ and their country’s economy is starting to recover. However – a recent survey conducted by the Pew Research Center showed that 28% of participants viewed the country’s economic conditions as good or excellent.
Why Such Economic Pessimism
It seems the supper high inflation rate leads most Americans to have such a negative view of their economy. Indeed close to 90% of participants viewed food and gas prices as higher than last year, 89 and 88 82 percent respectively.
Is Inflation Always Bad?
However, some economists argue that inflation, is at times, a sign of a healthy economy and does not always have to be viewed in a negative light. This is easier said than done though, with living costs increasing – consumers can feel the pinch in their budgets.
The argument, however, is that supply and demand determine the unit price. So if there is an increased demand – and supply does not necessarily change – unit price must increase. This means consumer price index increases or inflation. So an increase in demand could show people are buying more, and this might at least be the signs of a recovering – or active economy.
When supply chain issues are fixed – inflation should decrease. Furthermore, since December last year, unemployment is the lowest it has been since the start of the pandemic. So perhaps such an opposing economic viewpoint – can be replaced, which is realistic, in this light.
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Experts Predict Long Payment Delays From IRS This Season, Provide Few Tips To Speed Up The Process
The IRS faces an enormous backlog due to staff shortages amidst the pandemic, it has recruited new officials, but the challenge remains tough. IRS is yet to process millions of tax returns of last season. The IRS officials are crushed under a ton of paperwork; millions of taxpayers will file their returns this year. The authorities will need to devise a compact strategy to overcome the backlog. CNBC reports that IRS had 6 million unprocessed returns by December 31, this is large numbers, and 2021’s tax returns might take some time.
IRS Workers Are Sparse
Experts suggest various ways to slim the time lag between filing the returns and receiving the payments. CNBC reports that the IRS only had 15,000 workers to answer around 24 million customer calls during the first six months of 2021, one person for 16,000 customers. Experts suggest taxpayers avoid the paperwork to the maximum extent; filers can switch electronic modes to fast forward the documentation. Taxpayers need to use advanced features to process tax refunds and other pending payments quickly. The electronic method will ease the burden on IRS officials during data verification.
Taxpayers Should File Electronic Tax Returns
IRS quoted Erin Collins, the National Taxpayer Advocate; she said, “Paper is the IRS’s kryptonite, and the agency is buried in it. The IRS still transcribes paper returns line by line, number by number, they received around 17 million original paper returns last year, and the processing delays have run as long as 10 months.” The taxpayers need to recheck their tax returns thoroughly; the wrong information might lead to payment abortion and several lengthy delays. The officials, too, will have to go through the same twice or thrice, which makes the process more complicated.
The families who receive enhanced Child Tax Credit or Stimulus payments or both need to exercise extra caution while filing their returns; the IRS issued letters to provide data for the amount allocated. The beneficiaries for the remaining half of the Child Tax Credit payments or extra credit should give complete information in their tax returns. IRS has announced April 18 as the deadline; individuals need to complete the filing process before the date.
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2021 Tax Refunds Will Provide Additional Money To Low-Income Americans
The federal government introduced several relief programs to assist the sufferers of the pandemic. Millions of low-income families and individuals will likely return to their old living ways as the benefits have ceased. However, the tax refunds might bring extra money to several eligible households in 2022. IRS issued half of the Child Tax Credit to the families within the income threshold. The families will receive the remaining half after filing their returns. Many parents are eligible for additional checks after having a new child or a dependent in 2021. Cnet reports that the IRS will issue the suitable amount after information verification, eligible families will automatically receive the payments and tax refunds.
Families Will Receive The Remaining CTC
Families received $1,800 for each child below six and $1,500 for each between 6 and 17. Single taxpayers with annual income below $75,000 and married parents below $150,000 were eligible for the benefits. Cnet reports that the payments phase out at $220,000 and $440,000 for each. The families failing to receive the benefits last year due to incorrect data can avail themselves of the amount through their tax returns. Taxpayers can check their payment status through the online IRS portal. Last year, parents with an additional child needed to update their information to receive the credit.
Taxpayers With A Newborn In 2021 Will Receive Credit
Cnet reports that many families received overpayments due to data miscalculation; the IRS will claim back the payments or deduct the amount from the tax refunds. The parents with an income change need to update their information; the IRS will manage their repayments based on the new income. The parents with children turning 18 last year will have to repay the money to the IRS. The families with lower income in 2021 than in 2020 will also be eligible for the extra benefits.
The fate of the Child Tax Credit program is uncertain at present. The recent rejection of the Build Back Better bill shattered the hopes of millions of Americans. The CTC program offered valuable support to low-income families and allowed educational facilities for children below the poverty level. The cessation of the payments will lead to severe financial trauma.
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