David W. Brown, Amanda E. Kowalski, Ithai Z. Lurie present evidence of long term beneficial effects of Medicaid available in childhood. They consider the expansion of Medicaid and note that increased availability of Medicaid to children is correlated with higher earnings as adults. They note that this means that the Federal Government recouped part of the cost of the Medicaid.
They can identify the effect because Medicaid expanded at different times in different states. This strategy is the same as that in the study of the long term effects of food stamps.
The empirical result is the same too and it is the opposite of the social safety net is a hammock hypothesis that social welfare spending creates dependency and leads to a culture of poverty. This is another study providing convincing evidence that social welfare spending helps break the cycle of poverty.