2020 Child Care Rate Issue Brief
The designated Lead Agency in Oklahoma, the Department of Human Services (DHS), receives Child Care and Development Funds (CCDF) for child care activities identified within their state plan. Title 45, Parts 98: of the Code of Federal Regulations requires the Lead Agency to certify rates as sufficient to ensure equal access for children receiving subsidized child care.
The rate model in Attachment A was developed to project the impact and calculate the cost of modifying fixed and uniform child care subsidy rates to meet federal requirements. Child Care Services contends child care subsidy rates should not be acquired through the competitive bidding process given that each month more than 30,000 children from low-income families utilized child care subsidy at approximately 1,700 providers throughout the state.
Child Care Services proposes to increase certain rates paid for child care subsidy. The rate increases will support the access and choice of child care for families meeting eligibility criteria and promote high quality care.
Recommendation
The child care subsidy increase is funded with 100% Federal dollars through the Child Care Development Fund. Child Care Services recommends the adoption of the revised rates as proposed on Attachment A.
Effective date: April 1, 2020
Eligibility Requirements
In order for a child to be eligible for Department of Human Services (DHS) subsidized child care, the household must meet the conditions of eligibility found in OAC 340:40-7. In order for a child care provider to receive subsidy payments from DHS, the provider must have a current Child Care Provider Contract.
Purpose
The purpose of the rate increase is to bring the 3 star programs up to the 75% of the Market Rate Survey to create a larger separation between 2 and 3 stars. At the time of the last rate increase on Aug 1, 2018, the 2 star programs received a greater percentage increase which diminished the separation between 2 and 3 star programs. The 1 star center providers didn’t receive an increase in the last rate increase effective Aug 1, 2018. 1 star child care homes increase is to encourage subsidy participation in child care deserts primarily located in sparsely populated rural areas. The current rate increase is also intended to increase access to subsidized care for children with special needs and families with non-traditional work schedules.
The March 1, 2020 Child Care Subsidy Rate Increase will:
Increase 1 Star Home rates to the 50th percentile based on the 2017 Market Rate Survey.
Increase 1 Star Center rates to the 50th percentile based on the 2017 Market Rate Survey.
Increase 3 Star Home and Center rates to the 75th percentile as determined by the 2017 Market Rate Survey for care of children birth through age three.
Increase Special Needs Add-On rate to $16 per day for moderate special needs and $28 per day for severe special needs. The add-on rate is in addition to the typical full-time daily rate approved for the child. Part time add-on is 50% of full time.
Implement a new non-traditional hours add-on rate to help support families with non-traditional work schedules. The new rate will be $14 per day for 2 hours or more of care provided between 6 pm and 6 am and on weekends. The add-on rate is in addition to the typical full-time daily rate approved for the child.
Annualized Cost: $3,318,716 (100% Federally Funded)
Definitions & Methodology
The 2017 Market Rate Survey (MRS) is the basis for identifying child care rates at the targeted percentile of full-time child care subsidy rates. The term "market rate" is defined as the agreed upon pricing point in an open market between a child care provider and a private pay family for child care services. The agreed upon price is evidenced by actual enrollment at the pricing point.
Complete definitions and references to policy are included on the 08AX0005E (Appendix C-4-B)
Written comments will be accepted via email at Childcare.OCCS@okdhs.org
