Impact of Education on Medicaid Eligibility

The individual mandate of the Affordable Care Act (ACA) coupled with the Medicaid expansion in Kentucky makes reducing Medicaid eligibility rates of crucial importance. This brief examines the link between education and eligibility for Medicaid for the citizens of Kentucky. In general, the relationship is nearly mechanical in that higher education leads to higher incomes. Since income is the key determining factor of Medicaid eligibility, and because of the individual mandate eligibility is mostly equivalent to participation, our estimates show that higher education reduces the likelihood that an adult will be on Medicaid or have children and family members on Medicaid. Our results suggest that the state of Kentucky could reduce Medicaid costs by $27 million if we were to increase our education levels modestly and as much as $200 million if we can achieve education levels comparable to the U.S