Medicaid Or Education?

By Dick Morris on February 12, 2014

Published on on February 11, 2014

In state capitals throughout America, a drama will play out this coming year and in every subsequent year for at least a decade.

Legislators and governors will find themselves unable to provide decently for education without cutting back on the ambitious Medicaid expansion built into ObamaCare. Even in those states that opted not to participate in raising the eligibility levels for Medicaid — and took the out Chief Justice John Roberts gave them — the Medicaid rolls will rise as more of those previously eligible sign up through the well-publicized federal exchanges.

The explosion in Medicaid cost and enrollment represents a dire threat to educational quality in all 50 states. Simply put, improving our failing schools will have to wait, as ObamaCare drives up state healthcare spending.

Last year, according to, education ate up $286 billion of the $1.5 trillion in state spending — about 19 percent. But Medicaid gobbled up $478 billion — or 32 percent.

But this is just the beginning. Due to lower medical inflation, Medicaid spending has grown only at about 2 percent a year during the past two budget cycles. However, due to ObamaCare’s increased Medicaid enrollment, Medicaid spending is projected to rise 12.2 percent in 2014, 7.9 percent in 2015 and 2016, and 6.6 percent per year thereafter. Meanwhile, state total spending is projected to hold fairly steady at $1.5 trillion.

The left is going to have to choose between Medicaid and education. We cannot afford both. Of course, states can still raise taxes and join jurisdictions like Detroit into their slow spiral to oblivion.

Is the Medicaid spending worth it? Is it a good trade to swap our children’s future for a perceived increase in healthcare quality for today’s poor? Does increasing Medicaid help to improve the health of the new recipients? The seminal study says: Not much.

The study came about when Oregon expanded its Medicaid program in 2008, using a lottery to determine who would benefit from the limited expansion. Amy Finkelstein, an economics professor at MIT, and Katherine Baicker from the Harvard School of Public Health, analyzed the results in what came to be called the Oregon Health Insurance Experiment.

The researchers found “no measurable health benefits in the Medicaid group for several chronic conditions, including hypertension, high cholesterol and diabetes.”

They did find that expanding Medicaid coverage caused the newly enrolled to throng emergency rooms. Finkelstein said: “Medicaid coverage increases emergency department use, both overall and for a broad range of types of visits, conditions, and subpopulations, including visits for conditions that may be most readily treatable in primary care settings.” In fact, she reported a 40 percent hike in ER visits among the newly enrolled.

The control population and the Medicaid population in the study differed only in “the fact that some have insurance and some don’t.”

So is the Medicaid expansion worth it? Is it an effective way to use state resources to tell an entire generation of children that they will have to wait for good schools until the Medicaid expansion experiment has run its course? Or will it be too late for them then?

In view of the lack of evidence showing the benefit to providing poor adults under the age of 65 with free medical care, are we justified in diverting funds that would likely otherwise go to schools, better teachers and enriched curriculums? With students throughout the nation no longer able to study such subjects as science, social studies and foreign languages due to financial limitations, are we right to make Medicaid the sole object of our generosity?

Ask the kids.

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