Lawmakers probe Medicaid role in rising special-education costs as subcommittee begins study of HB 742

At a meeting of the Legislature’s Education Funding subcommittee, lawmakers heard from Henry Lippman, the state Medicaid director, about how New Hampshire’s Medicaid-to-schools program interacts with the state’s Special Education Aid system and how changes in federal expectations will require a cost-reporting conversion by July 1, 2026.

The subcommittee was convened to begin work on HB 742, described in the packet as “an act requiring catastrophic special education state aid funding to be drawn from the Education Trust Fund” and to broadly study special education aid, its costing and implementation. The chair of the subcommittee said the goal is to produce recommendations and an administrative directive to the Department of Education and the Department of Health and Human Services that identify the data the Legislature needs to make policy decisions on the program’s formula and funding levels.

Why this matters: Special-education spending has grown and the committee said existing information is incomplete. The statute and current formulas that multiply district costs (for example, a 3.5-times multiplier cited in committee discussion) have prompted recurring bills to change thresholds and multipliers. Lawmakers and agency staff told the panel that incomplete data about which services are health-related and therefore potentially billable to Medicaid complicates cost projections for catastrophic aid, which…