Orszag: Medicaid Is Crowding Out College

Our research suggests that states tend to rob education to pay for Medicaid during economic downturns. And when the economy recovers, the money for education usually doesn’t get restored…. A surprisingly strong connection: over recent decades [shows that] as state governments have devoted a larger share of resources to rising costs of Medicaid, the health care program for the poor, they have cut support for higher education.

If higher education’s share of state budgets had remained constant instead of being crowded out by rising Medicaid costs, it would be getting some $30 billion more than it receives today, or more than $2,000 per student.

Full New York Times op-ed by Peter Orszag here.

Comments (6)

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  1. Linda Gorman says:

    Higher education, the black hole of subsidized taxpayer funding that is currently undergoing its own financial bubble, needs more funding?

    Nice try.

  2. Ken says:

    Linda, they are both black holes.

  3. Vicki says:

    I don’t know which is worse — wasting money on higher education,, or wasting it on Medicaid.

  4. Aaron says:

    These colleges, I believe, still make plenty of money. I do not think they are in tough times. For some reason, the fallacy of college is “more expensive, equals better educated/ more potential”

  5. Bruce says:

    Health care has to crowd out something. At the state level, higher education is almost inevitable.

  6. Linda Gorman says:

    Why does health care crowd out anything when state revenues typically increase from year to year?