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Could Halving the Dropout Rate Save Texas Half a Billion Dollars?

Reducing the high school dropout rate in Texas by 50 percent could save the state $547 million in Medicaid spending annually, according to a new report from the Alliance for Excellent Education

The study finds raising education-attainment levels could reduce health-related costs – specifically surrounding obesity, tobacco and alcohol use and heart disease. 

"An educated citizen is a healthy, productive and happier citizen," Bob Wise, president of Alliance for Excellent Education, said in a statement released Wednesday.

The study breaks down the potential cost savings for Texas as follows:

  • $70,194,553 in heart disease-related Medicaid savings
  • 143,462,985 in obesity-related Medicaid savings
  • $108,543,656 in alcoholism-related Medicaid savings
  • $146,784,162 in smoking-related Medicaid savings

Research shows a high school graduate is 50 percent less likely to go on Medicaid. 
But Chuck DaVore with the Texas Public Policy Foundation disagrees. 

"It’s a false linkage. What really matters in Medicaid on the macroeconomic sense is 'what sort of economic opportunities do you have for people with and without degrees?'" DaVore says. 

DaVore says in Texas, the number of residents on Medicaid is driven more by the population of foreign immigrants using the program, rather than the number of high school drop outs. 

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