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The Healthcare Costs of War

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The editors at MBA in Healthcare Management Degrees decided to research the topic of:

The Healthcare Costs of War

The wars in Afghanistan and Iraq have cost billions of dollars over the last decade, but the spending won't stop when the fighting does. Just how much money are we spending on health care because of war?

Paying for Wars

- In the past, the U.S. paid for wars by:
- Selling war bonds
- WWII cost $340 billion
- Americans purchased $150 billion in war bonds to fund the war effort
- Raising taxes
- The largest tax increase in history provided additional funding for WWII
- The top marginal rate was raised to 94%
- Tax hikes also paid for the Korean war and the Vietnam war
- The Afghanistan and Iraq wars were paid for by borrowing most of the funds
- War-related federal outlays from 2001 through fiscal year 2013: $3,102.85 billion
- Interest payments on Pentagon spending alone: $259 billion
- 2013 discretionary budget for the US Department of Education (including Pell Grants): $68.4 billion

Current Health Care Costs

- As of March 2013, the U.S. has paid $135 billion for medical and disability care for more than 4 million veterans of the Afghanistan and Iraq wars.
- That's $150 million per day.
- More veterans apply to receive benefits every day.
- 45% of Gulf War veterans need benefits.
- Average wait time for benefits is 286 days.

Future Health Care Costs

- Because the U.S. is obligated to pay for future medical and disability costs for veterans:
- Costs will continue to rise, peaking after 30 to 40 years, as with other wars.
- Total health care costs estimated at: $754 billion

Today's Benefit Cost of Past Wars (including family benefits)

- Civil War: $1,752 per year
- Spanish-American War: $50,000 per year
- World War I: $20 million per year
- World War II: $5 billion per year
- Korean War: $2.8 billion per year
- Vietnam War: $22 billion per year

Total payout for ongoing veteran's benefits from all wars (combined) prior to 2001: $24.8 billion per year

Real Cost of Health Care

- Unless the U.S. is able to immediately repay the money for the wars, interest will be attached to the health care costs.
- Interest payments are estimated to be:
- $1 trillion by 2023
- At $1 per second, it would take 32,000 years to pay off
- 35,000 years ago, the earth was populated by Neanderthals
- $7 trillion by 2053
- about half the US GDP for 2012