Higher Education and Medicaid Spending: Analysis of State Budgetary Trade-offs and the Affordable Care Act

The 2010 health reform bill, the Patient Protection and Affordable Care Act, included a provision that would expand eligibility of the public insurance program Medicaid. One concern raised about implementing the Medicaid expansion is that it would lead to reductions in state spending in other policy domains. In this study, we test whether adopting expansion is associated with changes in higher education appropriations. Using a difference-in-difference model, we find no significant changes in higher education appropriations between expansion and non-expansion states. Implications of these findings for universities and state policymakers are discussed.