Food For Thought
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Cost of Iraq War and Rising Healthcare Costs
The Cause And The Price To Be Paid?
February 1, 2003
by columnist
David Lawrence Dewey
"Reading provides knowledge...
knowledge leads to answers."
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The present costs of our war in Afghan, the daily and future costs of a war with Iraq and rising healthcare costs which I believe is caused by Medicaid costs are serious issues facing our country. Now you are probably wondering what does Medicaid costs have to do with war. They both are having and will have created more serious consequences on our standard of living. It has to do with greed and here's why.

First, let's explore the war costs.

However, keep this in mind as you read. Estimated oils reserves in Iraq exceed $1.7 trillion dollars in present oil prices.

In November, 2002, Federal Reserve Chairman, Allan Greenspan warned that if the possible upcoming war with Iraq was prolonged, it would cause serious problems with an already suffering economy.

The American taxpayer was lucky regarding the Iraq war in 1991 war costs. The war cost American taxpayers $62 billion dollars, however $54 billion of that was paid back by coalition partners in the war, mainly Kuwait. This will not be the case this time in this impending war with Iraq. This impending war with Iraq will cost a minimum of $75 billion dollars and upwards to $1.9 trillion dollars. So far, only Britain as committed to only 10% of the cost of the war.

In President Bush's February, 2002 budget, Bush budgeted $2.13 trillion dollars for military spending for war costs. Do you notice the date. Even back in February, 2002, the desire to take Saddam out was there in President Bush's mind.

In addition, the U.S. has paid the following countries for their upcoming cooperation in the war against Iraq. Germany has received $14 billion dollars to help their failing economy. Pakistan has received 2.1 billion dollars for their cooperation in the war against terrorism from the U.S. and more to follow if the U.S. goes to war against Iraq. Israel has received in excess of $20 billion dollars, and the list goes on and on.

The first thirty days of the Afghan war cost the American taxpayer nearly $17 billion dollars. It is still costing the American taxpayer nearly $1.9 billion dollars a month. It is estimated that by the time the U.S. pulls out of Afghanistan which will not be for at least five years, it will have cost the American taxpayer nearly $50 billion dollars. This does not count the nearly $25 billion that the U.S. government will give the new Afghanistan government in rebuilding Afghanistan. Estimates for future costs if after the impending war with Iraq will add another $100 billion to this total. Who is going to pay for all this?

The following are statistics from the 1991 Gulf War:
U.S. troops killed: 79 in action, 58 in non-combat, total: 148
U.S. troops wounded: 213
U.S. airmen listed as POWs: 9 ( they still have not been found )
U.S. troops missing in action: 37
Allied troops killed: 44 in combat
Allied air missions flown: 106,000+
U.S. planes lost in combat: 27
Allied planes lost: 9
Iraqi aircraft destroyed: 141
Iraqi planes that fled to Iran: 137 , nearly half are still in Iran
Iraqi tanks destroyed: 3,080
Estimated Iraqi casualties: More than 85,000 killed and wounded
Iraqi ships sunk, damaged: 73
Iraqi POWs held by allies: 80,000
U.S. troops in Persian Gulf: 537,000+

It is estimated based on present day troop deployment to the gulf region, that in excess of 700,000 troops will be deployed for the war. This war this time will not be a easy win like last time, because the U.S. did not go into Bagdaq last time. According to former General Joseph Hoar who told the Senate Armed Services Committee last fall, it is estimated that because we did not got all the way into Bagdaq the last time, this time the cost in human life will be at least ten times greater or approximately 1,500 American lives lost in this war.

If the war is prolonged, ( more than 30 days to gain control of the country ), it will cost in excess $500 million dollars a day. This will have serious consequences on an already shaky and suffering economy.

If you add the present Afghan war costs, plus this impending Iraq war cost, this will be costing the American taxpayer in excess of $20 billion dollars for the first month alone. And this does not count the billions of dollars of aid to countries supporting the war. Instead of others helping to foot the bill like the last time in 1991, the American taxpayer will be stuck with the whole amount. Instead, the U.S. is paying other Arab countries to make war on Iraq, plain and simple.

President Bush wants to cut taxes mainly for taxpayers that make in excess of $300,000.00 a year. Then there is his doing away with tax on dividends. Yes, this will help Americans who invest in stock, however what you are not being told is this. Years ago, corporations found a way to avoid the corporate tax structures. They would form another corporation, that would own the assets of their primary corporation. This allowed for many tax credits and deductions not otherwise given to a regular corporation. However, for other stockholders to be paid dividends, and to pass profits onto the other corporation owning the primary corporation, a dividend would have to be declared on the primary corporation. In doing so however, the corporation receiving the dividends from the primary corporation would have to pay taxes on that.

So the bottom line to this: it will benefit already greedy corporations from having to pay taxes on dividends they are declaring on their corporation that is making the money. Thus...corporations that are already paying almost next to nothing federal income taxes, will now in most cases, pay no federal income taxes. Eventually, you the American taxpayer will have to make up this difference, maybe not within the next 2-3 years, but count on a huge tax increase in 4-6 years by whatever political party President is in power then. He will have no chose because what is being done will cost this country dearly in the few years to come. It will be the same thing that President Reagan did when he promised he would not raise taxes, but did.

Also, if you study the present tax reduction proposals by the Bush administration, yes, lower income people and married people are getting a tax reduction, but those making in excess of $300,000.00 a year will get the most tax rate decrease, the largest ever given to this group. Is this pay back time for all the political contributors that make up this group.

Has anyone noticed that the U.S. government is again in the red to the tune of $200 billion dollars so far this year? It is estimated that by the end of the year the U.S. will have a $593 billion deficit and by the end of 2004, it will be in excess of $1 trillion dollars. Keep in Ming that before President Bush took office, America had a $240 billion treasury surplus. So, if you add this surplus in, the actual figure of a deficit is more like $440 billion so far this year that has been spent by the Bush Administration since taking office. Has this been spent on needed programs in the U.S. No it has not. Programs for children have been drastically cut, Headstart for one. Although President bush has allocated $26 billion for his "No Child Left Behind", this is only a two year program. What happens after two years, are children in three years going to have to reach themselves how to read? Instead the cost of this impending war with Iraq could pay for eight years of this program not two.

What you don't hear is that other federal education funding has been slashed by 22%. Local school boards are scurrying to find funds to keep their schools open and to repair. Yet, Bush says he wants every child in America to be able to read and write. I could list many other cuts in programs that are severely hurting Americans, but one listed is just an example of the severity problems that are not being addressed by this administration. All they are paying attention to is this war with Iraq they want.

The question one must ask oneself is this. How can a taxcut be given with all these much needed expenditures being cut and the impending costs of war with Iraq and present war costs in Afghanistan. If anyone has any sense of simple math, one realizes this cannot be done, period! Any any politician out there whether it be Democrat or Republican is telling you otherwise is lieing to you.

Americans must seriously start looking at this Administrations priorities. Is going to war with Iraq to remove Saddam, who I agree with is evil, or is it about the estimated $1.9 trillion oil reserves in Iraq which American oil companies will get first crack at? I hope my fellow Americans will start asking more of the questions that need to be asked and that they start getting the answers that are needed. Now I do not disagree that Saddam must be removed. He is evil. He has killed his own people with biological weapons. He tortures children to get their parents to do what he wants. The world must get rid of this evil person. But the U.S. must not go alone. The world must stand up and take responsiblity as well. America can no longer afford to be the stabilizer of planet earth. It is time for all civilized countries to do their part and pay the price. If not, then America should do everything to protect and care for her people first.

Now to Medicaid.

Rising healthcare costs I believe have been the direct result of the increase in Medicaid costs from $770 million in 1966 as part of President Johnson's to "Great Society" push, to over $67.3 billion dollars alone this year with a projected 14.6% rising annual costs, ( 7 billion dollars a year ) for the next ten years. Within ten years, Medicaid will cost taxpayers, ( i.e., Medicaid is paid out of Medicare tax contributions that you the taxpayer pays into ), nearly $157 billion a year today. There are already 37 million adults and children served by Medicaid each year and both parties want to add 40 million more. The idea of having nearly half of all Americans in government-run health programs (if you include 35 million seniors receiving Medicare) and others, its unlikely that states will take on Medicaid recipients without funding. Politicians are wanting to change the federal mandate requirements so more people can qualify, but yet the government doesn't want to foot the bill. They are expecting the states to do so. Medicaid spending is increasing at twice the rate of overall state government expenditures, state governments simply cannot take on any added Medicaid costs. Who have lost their minds in Washington. Does anyone there read the accounting figures?

Why has overall healthcare costs risen an average of 10-12% a year for the last ten years? The answer is quite simple. Hospitals and health care providers have to raise costs for others to pay for the loss they incur on Medicaid patients. Did you know that undocumented aliens from Mexico can instantly qualify for Medicaid once they are over the border? Pregnant Mexican mothers because of the lack of medical care in their own country, jump the border right before they are due and go to a hospital in the U.S. to have their baby. After the baby if born, they then qualify for Medicaid, food stamps and living subsistence. What's wrong with this picture and why have our politicians allowed this to happen.

The other problem here is what the hospital then has to absorb because Medicaid as only kept up with a mandated 2% annual increase in service fees for healthcare costs, and what little Medicaid does pay for, the hospital or healthcare provider has to raise their overall pricing to others to not suffer a loss. Hospitals and healthcare providers are businesses.They cannot take a loss on something without charging higher prices. Here is an example of what Medicaid will reimburse a hospital for a simple White Blood Cell Count and comprehensive metabolic test.

The amount that Medicaid will reimburse hospital or healthcare providers for a Medicaid patient is only $10.90.

Let's break this down to see why the hospital then has to increase other costs to everyone else.

Most hospital charge an average of $36.00 to $42.00 for such a test. This means that they are having to write off $22.00 to $27.00 on just one test. Another words, Medicaid is only paying for about 28% of the actual billed amount of most services hospitals provide Medicaid patients.

Here it is dollar wise:

Charge for WBC Comprehensive Test: $42.00

Minus Payment Medicaid Pays:............... -$10.90

Balance left on test:......................................... $31.10

Actual cost of hospital for doing the test:.... -$33.60

( This is based on a 80% overhead, average cost of hospital for all operating costs of the hospital )

This represents a $2.50 loss on just one blood test on a Medicaid patient. This represents a 6% loss the hospital has incurred on just this one blood test. For some medical procedures, this write off loss is even more to the hospital. The national average is a 30% write off of total charges.

Now, let's say you have a Medicaid undocumented alien having a baby in a hospital. The average two day hospital stay for a mother having a baby is $860.00. If the hospital is having to write off 30% of this because of low Medicaid payment, this is $258.00. Can the hospital continue to absorb this cost without having to close its' doors? No, they have to add this loss and increase their overall prices to everyone else, which in turn causes higher insurance premiums for everyone. One out of every three patients in emergency rooms in hospitals nationwide is not on Medicaid. Medicaid patients usually do not have a regular physician and they use the emergency room like a doctors office.

This my fellow Americans is why you have seen healthcare costs rise, your insurance premiums go through the roof the last ten years. And the cost of this impending war with Iraq could pay for a five year prescription drug program for the elderly who many are doing without to simply eat. The elderly are now dieing prematurely because of a lack of proper medication.

What is the solution to this? A national healthcare program where everyone is insured. One thing must stop immediately. Americans no longer need to foot the bill for Mexican nationals that come over the border for medical care. Mexico needs to start taking care of their own and the U.S. needs to start taking care of not only their own first, but better care of them. A person under this national healthcare program would get to chose their own doctors. There would be prescription benefits. Our elected officials must pass laws to limit the amount of profit and research dollars a drug company can claim on any drug to prevent over pricing. Politicians needs to get out of the pocket of drug companies. Drug companies contributed over $18 million dollars last year to officials running for office.

The plan would pay equitable payment for services and keep current payments correct, not like present day Medicaid that has only increased their payments by 2% a year. This hasn't even kept up with inflation. You would not be having physicians quitting their practice because they can't afford to keep it open. I know of some physicians that have gone to work selling automobiles because they make more money, less hours and alot less stress.

The other problem one finds here are the politicians. Members in both parties will not do what is needed to correct this problem. Why? Because they are backed by the huge corporations that are gobbling up nonprofit hospitals. Did you know that a for profit hospital can now turn an ambulance away to a county nonprofit hospital if emergency is not life threatening? The problem with this is, county hospitals are starting to close their doors. They can no longer absorb these costs that Medicaid and even Medicare will not pay.

The other problem is that Congress and even the President fails to see the ever growing elderly that will hit this country over the next 20 years from the baby boom generation. In addition, it is estimated that over the next 25 years, nearly $322 billion dollars, ( 12.9 billion a year ) will be paid out by Medicaid alone for tobacco related healthcare illness for Medicaid patients. This is only tobacco related illnesses. This is in addition to the already staggering amount of $67 billion a year today, or $157 billion in ten years with an increase of 20% for tobacco related illness alone,( an additional $322 billion), bringing the total Medicaid costs to over 479 billion dollars, or 14% of the budget. It will half of much as defense spending. Where is the money going to come from? The only place, higher taxes, and from whom? You the taxpayer.

If this is allowed to continue, healthcare costs for everyone will be so costly, that only 2.5 persons out of ten, or roughly 25% of the working population will be able to afford traditional health insurance. The remaining Americans that cannot qualify for Medicaid will be billed to death every time they are ill. They will stay in the poor house, paying to these large profit making corporations the rest of their lives.

If you take the billions of dollars that Medicaid and Medicare are paying out annually and the amount that Americans that have health insurance are paying annually, there is more than enough money to implement a National Healthcare Program to cover everyone with the best medical care that could be provided. And doctors would be making a comfortable living and you would not have life and death situations that insurance companies are now starting to exercise when approving claims or treatment.

Hello America...wake up. Yes, you the taxpayer. I've given you the facts on these two very serious issues facing our country today. How much longer are you going to let a bunch of politicians make ignorant decisions that are and will negatively affect your quality of life? there anyone listening?

I am known to be very blunt at times in my columns. I do this to make my point and to hopefully wake up people to the fact that they need to get involved in their government more. If you don't, one day, the government will totally be controlling you instead of what this country was based upon. A country by the people and for the people.

Here is something to remember that George Washington, the father of this great country said:

"A free people ought not only to be armed and disciplined...
but they should have sufficient arms and ammunition to maintain a status of...
independence from any who might attempt to abuse them,...
which would include their own government."

~ George Washington

~ God Bless ~

~ David Lawrence Dewey ~

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