Yet another factor fueling America's economic malaise is health-care spending, according to a new report by the Centers for Medicare and Medicaid.

After a strong 2000, many companies extended lucrative benefit packages to lure top employees -- but that has come back to bite large and small firms alike. The sweetened benefits, coupled with the rising cost of prescription drugs and increased hospital and public health program spending, pushed the U.S. health-care budget to $1.4 trillion, up from $1.3 trillion in 2000. Break it down, and that's $5,035 per person.

If this is enough to make you sick, we suggest nine ways to lower your health-care costs.

Despite popping echinacea like candy, the FOOL 50 was down a percent today.

In today's Motley Fool Take:

Alcoa Dents the Dow

Results haven't gotten any shinier for aluminum giant Alcoa(NYSE: AA). Slack demand, oversupply in the aluminum market, and a weakened manufacturing sector continue to plague the company. A sales decline and quarterly loss mar its just-released fourth-quarter results.

Sales for the quarter were $5.06 billion, down from $5.10 billion a year ago. For the year, sales were $20.26 billion, versus $22.50 billion for 2001.

Earnings take a bit more work to parse out because of restructuring charges. The company's loss (including all charges) for the fourth quarter was $223 million, or $0.27 a diluted share. That's wider than the previous Q4's $0.17 per share loss (also including some charges). Net income for its fiscal year was $0.49, compared to $1.05 in 2001.

Excluding charges, Alcoa produced $133 million in income from continuing operations during the quarter, or $0.16 a share. Analysts were expecting $0.25 a share.

The company is largely at the mercy of the business cycle and the global aluminum market, which has been flooded with cheap aluminum from countries like China and Russia. Additionally, U.S. manufacturing weakness continues to take its toll. Factory orders dropped 0.8% in November after posting a 1.4% increase in October. That's the third time in four months that factory orders have declined. Orders for transportation goods, including two of Alcoa's key markets -- cars and airplanes -- dropped 1.9% in November.

Not one to sit idly by, waiting for its economic circumstances to improve, the company is taking control where possible. It has spent the last year cutting costs and growing lean. Continuing that trend, Alcoa will slash 8,000 jobs in 2003 and sell off some of its underperforming businesses, using the money generated to pay down debt.

The Dow component is in the unenviable position, then, of waiting out the economic storm. Alcoa must be applauded, though, for taking steps to control costs and become more efficient in the meantime.

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SUVs Deemed "Uncool"

Those invested or thinking of investing in auto makers might want to think twice. According to The Wall Street Journal (subscription required), consumers say the functional trucks, which make up a big part of auto makers' profits, just aren't cool anymore. Why? Several reasons.

  • Despite record sales in 2002 (one in four vehicles sold was an SUV), their fuel inefficiency is nevertheless proving unsatisfactory to many consumers.
  • Last year, several major religious organizations asked followers to rethink SUVs because they waste natural resources. A Christian organization recently began running "What Would Jesus Drive?" ads on TV.
  • Columnist Arianna Huffington has audaciously suggested those supporting SUVs are indirectly supporting terrorism by boosting our dependence on foreign oil. She's behind a series of soon-to-air TV ads illustrating the connection.
  • Websites such as The Ultimate Poseur Sport Utility Page mock the vehicles and offer arguments and statistics against them. Even somewhat mainstream media properties have joined the protest. Slate features this ad for a "Godzilla" SUV, offering zip codes as size options and promoting the "Exxon Valdez Commemorative Edition."

SUVs aren't just "uncool," though. They're also big polluters and less safe than many alternatives. Remember when Sen. Bill Frist (R-Tenn.) recently assisted victims at the scene of an overturned SUV? According to this New York Timesarticle (free registration required), SUVs roll over three times as often as cars due to their higher center of gravity. And The Mercury News says SUVs pose "nearly twice the risk to drivers of other cars as do average midsize and large cars."

The trucks are associated with a host of political issues, too, thanks to aggressive lobbying by the auto industry. Huffington addresses this in a recent column, in which she slams Presidents Bush and Clinton and discusses fuel-efficient hybrids. (Toyota and Honda have been making hybrids since 1997, and the Big Three are catching up.) "How ironic that if American car buyers want to do something truly patriotic, they have to buy Japanese to do it," she writes.

To weigh in with your opinion on SUVs, pro or con, pop into our Motley Fool Take discussion board (hassle-free, free trial available).

Quote of Note

"Popularity is exhausting. The life of the party almost always winds up in a corner with an overcoat over him." -- Wilson Mizner (1876-1933), U.S. screenwriter

Prepaid Tuition in Trouble

Prepaid tuition plans are often described as "buying tomorrow's tuition at today's prices," since contributions are supposed to cover future college costs, regardless of tuition hikes.

But nowadays, prepaid plans can be best described in one of three ways, depending on the plan: 1) Pay more than today's prices and hope you're not overpaying for tomorrow's tuition; 2) pay at today's prices and hope it covers tuition tomorrow; or 3) don't pay anything because the plan is closed.

The trust funds relied upon by prepaid plans to pay benefits have been hit hard by the skidding equities markets. And state governments, strapped for cash due to lower tax revenues, have cut funding for higher education, which has led universities to raise tuition. So the operators of prepaid plans face the dilemma of covering costs rising faster than anticipated, with less money than expected.

Each plan has had its own solution. Some states, such as Ohio, Maryland, and Illinois, have increased prices, essentially adding a premium to current tuition. Other states may have to close plans to new enrollees, as Wisconsin and Colorado have. (Colorado, so far, is the only state to suggest it may not fulfill its obligation, and it's giving participants a chance to leave the plan before Feb. 20.)

So what should college savers do? "I think parents already participating should sit tight, unless the program seems anxious to get rid of them, like Colorado," says Joseph Hurley, founder of "Anyone looking to get into a prepaid program now should look closely at the pricing. It's getting tougher to justify the premiums being charged by some of the programs."

Also, contact the plan sponsor directly. Inquire about the financial status of the program, and find out what guarantee, if any, is behind the plan.

Finally, remember that it's important to start saving for college as soon as possible. If you were considering a prepaid tuition plan, but are now unsure, open a 529 savings plan and begin socking money away. You can transfer the assets to a prepaid tuition plan later, if you decide that's the best route for you.

Learn more about your options in our College Savings Center.

Quick Takes

Shares of Gateway(NYSE: GTW) were down as much as 15% in early trading after the computer maker warned it would lose more money than expected in the fourth quarter. CEO Ted Waitt blamed "demand softness."

Two unions representing about 19,000 General Electric(NYSE: GE) employees have notified the conglomerate that they will stage a two-day national strike next week. The unions are protesting a hike in health insurance payments. GE says it had to institute the increase because of rising costs.

Casino stocks are down today after MGM Mirage(NYSE: MGG) and Mandalay Resort Group(NYSE: MBG) lowered fourth-quarter guidance. Both say they're seeing a decrease in the number of gamblers visiting Las Vegas, a sign that consumers are continuing to cut back on entertainment spending.

Conversely, Super Bowl office pools are expected to give the U.S. economy a boost this year. University of Connecticut researcher Dr. Nancy Petry told the Associated Press that some $100 billion will be wagered on the big event, or about 1% of gross domestic product. Once the money trades hands after the game, it will be infused into the economy and provide a boost. Or so the theory goes.

In local news, movie buff Mary-Louise Cletus cried during the farewell scene of Casablanca for the 87th consecutive time. That broke her previous record of 86 straight weeps over the ending of Old Yeller.

And Finally...

Today on Bill Mann says don't believe the political mumbo-jumbo on dividend taxation.... Whitney Tilson reflects on a year of good calls, a few misses, and concludes with his 2003 outlook.... After Spider-Man, X-Men, and The Hulk, Marvel(NYSE: MVL) brings you the next generation of superhero: itself.... High-end accessories company Coach(NYSE: COH) ups its earnings guidance.... In Fool's School, determining your capital gains rates.... And the Post of the Day: A Fool saves himself from piling credit card debt.

Bob Bobala, Robert Brokamp, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Jackie Ross, Reggie Santiago, Dayana Yochim