The Joint Subcommittee for Health and Human Resources Oversight convened on July 15, 2025, to discuss critical issues surrounding funding and services for children and families in Virginia. The meeting focused on the complexities of Medicaid funding, expenditures on special education, and the implications of recent budgetary changes.

The discussion began with an overview of Medicaid's funding taxonomy, highlighting discrepancies between what Medicaid covers and the actual needs identified by service teams. Intensive in-home services are funded by both Medicaid and the Comprehensive Services Act (CSA), but additional support services like mentoring and parent coaching are typically not covered by Medicaid, placing financial burdens on the CSA.

A significant portion of the meeting addressed the financial landscape of services provided to youth and families. Special education students, who represent about 30% of the 16,000 youth served, account for 45% of total expenditures. The high costs associated with private special education were emphasized, with the annualized cost per student increasing significantly. The General Assembly has instituted a 5% cap on annual rate increases for these services, which was noted as a response to the rising costs driven by both rate increases and an increase in the number of children requiring services.

The subcommittee also examined the impact of foster care on expenditures, noting that approximately half of the children served are involved with the foster care system, which constitutes about a quarter of total costs. Residential treatment, while serving a smaller percentage of youth, incurs high costs, further complicating budget management.

The meeting concluded with a review of trends in service utilization and costs, indicating a rebound in census numbers following the COVID-19 pandemic, with a projected growth rate of about 13% annually. The subcommittee discussed potential strategies for cost containment, emphasizing the need for a collaborative approach to address the rising costs of services while ensuring that children receive the necessary support.

Overall, the meeting underscored the ongoing challenges in managing funding for health and human resources in Virginia, particularly in the context of special education and foster care services. The subcommittee plans to continue exploring solutions to these pressing issues in future sessions.