Hoosier lawmakers face difficult choices over Medicaid, affecting several million citizens who either receive Medicaid or participate in the Healthy Indiana Plan. These choices also affect health care availability across the state, as well as the viability of providers in rural Indiana. These choices will require trade-offs.

The math is startling.

In 2010, when the Affordable Care Act was passed, Indiana spent 0.57 percent of our total state GDP on Medicaid, and 969,000 Hoosiers were enrolled. Last year, we spent 1.13 percent of our GDP on Medicaid and enrolled 1.96 million Hoosiers. For every one new job created in Indiana since 2010, we’ve had more than two new people enroll in Medicaid.

The GOP will blame the Affordable Care Act (Obamacare) for this costly spike in enrollment, and they’d be partially right. Keep in mind that former Gov. Mike Pence accepted the Obamacare Medicaid expansion, which accounted for more than 600,000 of the roughly 1 million new recipients since 2010.

However, there’s more to our long-term Medicaid problems than the ACA or state-level ACA expansions.

Hoosier workers are getting relatively poorer. In 2000, our factory workers earned the national average salary for their work. Overall, Hoosier workers earned about 93 percent of the national wage. The current Hoosier factory worker now makes about 89 cents for every dollar earned by factory workers nationwide and the average Hoosier worker earns less than 84 cents for every dollar earned nationwide.

The plain and ineluctable fact is that Indiana’s economy has spent 25 years falling further behind the rest of the U.S. As a state that is primarily creating lower-wage jobs, we inevitably have a growing share of our working-age population eligible for Medicaid.

So, with or without the ACA—which has zero chance of being overturned—Indiana should expect continued growth in the share of poorer residents eligible for Medicaid.

But what is causing this, and is there a way to fix it?

In the modern economy, over the last half-century or so, nearly all business and job growth has come to places with an abundance of highly educated workers. Since 1992, 80 percent of all the net job growth has gone to people with bachelor’s degrees or higher. However, Indiana has only six counties with educational attainment above the national average, and we send less than half of each age cohort to college.

I write often about this issue, but am not sure most folks, including many making fiscal and economic policy decisions, really understand what has happened or how lasting the effects will be. We are decades away from a turnaround.

In the early 2000s, U.S. manufacturing lost a sizable number of jobs. Most were lost to automation, but some were lost to trade. Economists have long known that better-educated workers, primarily those with some post-secondary education, are more likely to bounce back from a job loss.

Education, and the ability to learn throughout a working life, is important for long-term economic success. Indiana has the highest share of jobs at risk of automation, and a astonishing undersupply of workers who can transition easily to new jobs.

Again, the data are startling. For every factory job Indiana’s lost since the start of the Great Recession, we’ve created 14.4 new jobs in other sectors. That sounds good, but nationwide, the number is 24.3 new jobs created for every lost factory job.

Indiana simply does not have enough of the types of workers we need to thrive in the American economy of the 21st century. That’s how we got where we are today, and the future is decidedly more challenging than the past.

Since 2010’s ACA passage, Medicaid spending as a share of our GDP rose by 97 percent.

We’ve chosen a different path for education. Since 2010, state spending on K-12 education as a share of GDP declined by more than 21 percent and state spending on higher education declined by almost 30 percent.

Those cuts weren’t just in terms of our state’s economy. In inflation-adjusted terms, Indiana spends less per student today than we did in 2010. We’ve also de-emphasized post-secondary education, and for a brief time, actively adopted curriculum choices that pushed kids as young as 12 away from the college track.

The legislature has wisely reversed some of these errors. Perhaps a more flexible high school diploma, the elimination of some regulatory burden and an expanded 21st Century Scholars program will help.

The problem is, to match the national educational attainment average, we need 275,000 more adults with college degrees. If we boost college attendance rates by 20 percent, to about 73 percent, and all those kids graduated, we could catch up in about 25 years. But it’ll take a 12 percent increase just to keep from falling further behind.

We are rapidly falling behind.

All that extra money we are spending on Medicaid is not being spent on education. It is true that Indiana has been slashing taxes pretty steadily for more than a decade and is proposing more long-term tax cuts. It is also true that there are many unpleasant outcomes associated with cutting Medicaid. We’ll have a sicker population, with higher infant mortality and the closure of some rural health care providers.

Public policy is about weighing choices, and those choices are often unpleasant. Indiana can choose to continue spending more tax dollars to mitigate the effects of poverty (Medicaid) or spend more money to prevent poverty (education). Or, we can continue to cut taxes and spend less on both; or raise taxes and spend more on one or the other, or both.

Only one of these choices will result in less poverty and more economic growth. It isn’t tax cuts.