All articles tagged with #overpayment
The Winner's Curse occurs when the winners of auctions or bidding wars tend to overpay and end up paying more than the item's worth, a phenomenon observed across various markets and domains. Richard Thaler, a pioneer in behavioral economics, highlights how irrational bidding behavior leads to this curse and offers advice to avoid it, emphasizing cautious bidding especially in competitive environments with many bidders.
The Trump administration has begun garnishing Social Security benefits for over a million beneficiaries to recover approximately $23 billion in overpayments, with some checks being reduced by up to 50%. Beneficiaries can legally avoid or reduce garnishments by requesting waivers, reconsiderations, or hardship-based repayment adjustments through specific SSA forms, especially if the overpayment was not their fault or causes financial hardship.
Starting July 24, over 1 million Social Security beneficiaries who were overpaid will face garnishments of up to 50% of their benefits, but there are legal ways to reduce or avoid these garnishments, such as requesting a waiver or appealing the overpayment.
The Social Security Administration will start recouping overpayments by deducting up to 50% from monthly benefits, potentially reducing recipients' payments starting in August, with options to appeal or request lower recovery rates; this policy change does not affect Supplemental Security Income benefits.
United Airlines overpaid in a secret deal to secure a partnership with JetBlue, primarily motivated by gaining access to JFK airport and countering American Airlines, despite the deal's details and true value remaining undisclosed. The deal was influenced by a competitive bidding process, with United possibly overestimating the partnership's worth, reflecting a winner's curse scenario.
The Dallas Cowboys made a questionable trade at the NFL deadline by acquiring receiver Jonathan Mingo from the Carolina Panthers in exchange for a 2025 fourth-round pick. Critics argue that the Cowboys overpaid for Mingo, who has yet to score a receiving touchdown in his career, especially when more established receivers like Davante Adams and DeAndre Hopkins were traded for similar or lower picks. Despite Mingo's rookie contract being cheaper, the Cowboys' ample cap space and the absence of injured quarterback Dak Prescott make the trade seem ill-advised.
Johnson & Johnson is being sued by one of its own employees for allegedly overpaying its pharmacy benefit manager for prescription drugs, leading to higher health insurance premiums and out-of-pocket costs for workers. The lawsuit claims that the overpayments ultimately affect workers' paychecks and wage growth, citing an example where J&J allegedly paid over $10,000 for a prescription that could be purchased elsewhere for as little as $30. This raises questions about employer liability for overpaying for drugs.
A new book highlights common mistakes made by the Social Security Administration (SSA) that could cost beneficiaries. One common mistake is retirees claiming benefits at the minimum retirement age of 62, which can reduce monthly checks by up to 30%. Waiting until the full retirement age of 67 or even age 70 can result in higher payments. Overpayment is another issue, affecting over a million Americans annually. Keeping detailed records of interactions with the SSA can help avoid overpayment problems. The earnings test can also impact benefits, with workers losing $1 for every $2 earned above the threshold. However, benefits can be restored once full retirement age is reached. Lastly, widowed individuals receiving survivor's benefits may have to give back payments if they become eligible for their own SSA payments.
The Anaheim Ducks have signed Alex Killorn to a four-year, $6.25 million AAV contract, which is seen as a significant overpayment. While Killorn brings a championship pedigree and offensive skills, his age and the talent gap between his former team, the Tampa Bay Lightning, and the Ducks raise concerns about his long-term performance. The Ducks, who are not competitive and have ample cap space, could afford the contract but it is still a questionable decision. Killorn likely couldn't have secured a similar payday elsewhere, but the contract is expected to age poorly. The fit grade for the contract is low, as other teams were able to add veteran players at a discount, while the Ducks paid a premium.