Medicaid and State Universities

Moneybox
A blog about business and economics.
Jan. 29 2012 4:06 PM

Medicaid and State Universities

Kevin Drum and Duncan Black talk about declining public support for higher education, a subject I don't think you can talk about without talking about health care. For state governments, in particular, Medicaid is a huge deal. But in 1960, Medicaid didn't exist so state governments spent $0 on it. By 1970 it was up and running but only cost $5.4 billion rising to $26 billion in 1980 (PDF from the Centers on Medicare and Medicaid, who somewhat annoyingly seem to be using nominal dollars). By 2000 that was $200.5 billion and it got up to $401.4 billion in 2010.

That, to me, is a key difference makers. Back in the good old days of the 1960s and 70s when baby boomers were in college, state governments weren't really shouldering a heavy load to provide health care to the poor, the elderly, and the disabled. By the aughts, this was a big element of what states were doing. But it's not as if liberals spent the 1980s and 1990s having enormous success in persuading voters to support higher taxes. Indeed, by 2008 the position of the Democratic Party was that 95 percent of the population was paying too much in taxes. You see at both the state and the federal level that between public aversion to taxes and public support for health care programs, the tendency is for other things to get squeezed. Growing state spending on prisons can't have helped either, but the health care pinch is especially tight since it's more or less the same group of legislators who you'd expect to back tuition subsidies and health care subsidies. Since debt-finance of college education is generally available and has historically been a reasonable investment, refusing to foot the bill for kids' college has seemed like a better bet than refusing to foot the bill for grandma's long-term health care needs or Jane Indigent's chemotherapy.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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