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Healthier and Wealthier: Decreasing Health Care Costs by Increasing Educational Attainment



In the past, states spent more on K–12 education than on any other budget item. However, in recent years, rising medical costs have changed this pattern; in 2003, health care expenses surpassed education as the largest item in states ’ budgets. In fiscal year 2006, Medicaid alone is estimated to account for approximately 22 percent of total state spending, while all health care costs will account for about 32 percent of states ’ expenditures (National Governors Association & National Association of State Budget Officers, 2006). These costs keep going up, and absent some drastic change, there is every indication that they will continue to outpace most states’ economic growth (Pew Research Center, 2006). In general, individuals with lower income, less education, and lowerstatus occupations and employment have poorer health (National Institutes of Health, 2003). Therefore, it would seem that raising educational levels would reduce health-related expenditures for the public sector, as well as for individuals. Specifically, research has shown that each student who graduates from high school, instead of dropping out before getting a diploma, will save states an average of $13,706 (in 2005 dollars) in Medicaid and expenditures for uninsured care over the course of his lifetime (Muennig, 2006). Savings like that add up quickly. If th

Year: 2006
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