Decreasing High School Dropout Rates Could Save Billions in Medicaid Expenses

The United States could save billions in annual Medicaid costs simply by cutting the nation’s total number of high school dropouts in half, according to the Alliance for Excellent Education, an advocacy group which recently released “Well and Well-Off: Decreasing Medicaid and Health-Care Costs by Increasing Educational Attainment,” a report that analyzes Medicaid expenditures across the country.

The state-by-state evaluation examines Medicaid spending based on four health factors – heart disease, obesity, smoking and alcoholism. According to the authors of the report, there is a connection between those health risks and high school completion. The average high school graduate is half as likely to be a Medicaid recipient as someone that dropped out of high school, according to the report.

Additionally, researchers say that high-school graduates are more likely than dropouts to have private health insurance plans, follow physician orders, work in fields with fewer known health risks and navigate their way through health care bureaucracy.

In total, about $7.3 billion in yearly Medicaid costs could be saved by reducing the nation’s dropout population by 50 percent, including $1.9 billion in savings related to obesity-linked health conditions and about $2 billion in savings related to health conditions related to tobacco use.

According to the report, California alone could save more than $1 billion in annual Medicaid expenses by producing fewer high school dropouts. Savings per capita ranged from nearly $800 per graduate in Utah to approximately $2,500 per high school grad in Massachusetts.


Projected “societal savings,” from decreased health problems and greater work productivity, for example, could be even higher, the authors write.


“After accounting for these factors, the report pegs the societal savings to be nearly $12 billion in heart disease-related savings, $11.9 billion in obesity-related savings, $6.4 billion in alcoholism-related savings, and $8.9 billion in smoking-related saving,” the report concludes.

Photo credit:  Office of Governor Patrick / Flikr (license: 


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