Wolf Administration Announces Increase to Base Payment Rates for Child Care Providers Participating in Subsidized Child Care

February 01, 2021

Governor Tom Wolf today announced an increase to base rates paid to child care providers participating in Child Care Works (CCW), Pennsylvania’s subsidized child care program.  CCW helps make child care affordable for lower-income, working families and allows parents to go to work knowing their children are being cared for and learning in safe, loving environments.  Increasing base rates helps all providers who participate in the program invest in services offered for children in care, staff development and compensation, and overall quality of their child care facility.

“Child care is essential for a functioning economy.  Investments in this industry benefit us in two different ways.  They support communities and the families that rely on care to join the workforce every day and nurture the growth and development of young minds as they prepare for grade school and latter long-term success,” said Gov. Wolf.  “Increasing base reimbursement rates is an investment in the dedicated professionals that do this work every day and for countless parents and children a we all seek to weather the challenges created by the pandemic and the recovery ahead.”

CCW is Pennsylvania’s subsidized child care program that helps low-income families pay their child care tuition and fees. To be eligible, families must earn 200 percent or less of the federal poverty guidelines at application and meet work or job training requirements. Eligible families are able to choose to enroll at any participating child care provider, which can be impacted by convenience, transportation, cost and working hours. Families enrolled in CCW pay a co-pay, and providers that participate in CCW are reimbursed a set base rate per child from the state with the opportunity for add-on funding.

Every three years, a child care market rate survey is conducted to guide rate setting. The last Market Rate Survey was completed in 2019 and released in 2020. Effective March 1, 2021, base rates for CCW reimbursements will be increased to the 40th percentile of the market rate for child care in the provider’s region, up from approximately the 25th percentile where most of Pennsylvania’s child care providers currently sit. This change brings Pennsylvania closer to the federal government’s recommendation of reimbursing at the 75th percentile. This increase equates to an additional $28.8 million in federal funding for the 2020-21 fiscal year and $87.2 million in the 2021-22 fiscal year.

This change will also regionalize rate calculation based on Early Learning Resource Center (ELRC) regions rather than calculating rates by county for each of Pennsylvania’s 67 counties. Pennsylvania is currently the only state that does not regionalize rates. Regionalization of rates creates a larger pool to more accurately represent rates across provider types licensed by the Office of Child Development and Early Learning in each region rather than calculating rates by county with limited sample sizes and provider type representation.

No provider will see their rates decrease with this new structure. The average increase across all regions is $4.59.

“Child Care Works makes quality, affordable child care accessible for working families across our commonwealth,” said Department of Human Services Secretary Teresa Miller. “By investing in base rates, we invest in quality across our child care industry – an investment that will help providers grow, develop, and retain staff and continue to improve services and care for our youngest Pennsylvanians.”

Investing in base rates for CCW promotes more equitable access to quality child care. Nearly two-thirds of children enrolled in CCW are in a lower-rated child care provider, and higher quality providers serve fewer CCW families. By providing increased base payments for care for children enrolled in CCW, more child care operators will increase operating margins allowing them to potentially retain more highly qualified staff and engage in enhanced quality activities. This can help providers move up the quality rating system and, in turn, benefit all children in care.

Approximately $220 million in CARES Act funding has been allocated to support child care providers across Pennsylvania since the COVID-19 crisis began in Pennsylvania to support this critical educational and economic infrastructure for children and families across the commonwealth. The distribution method of CARES funding was based in part on the findings of researchers at Penn State Harrisburg’s Institute of State and Regional Affairs, who studied the impact of COVID-19 on Pennsylvania’s child care industry.

Pennsylvania is also issuing $600 COVID-19 Pandemic Relief Awards to child care workers across Pennsylvania through federal Child Care and Development Fund (CCDF) quality dollars and remaining CARES funding. Child care providers that are currently licensed and certified through OCDEL can apply for these funds through their local ELRC until February 12, 2021. More information about ELRCs can be found at http://www.raiseyourstar.org/.

On December 27, 2020, an additional $10 billion dollars was allocated by the federal government to support child care. Pennsylvania should receive its share of the additional funds in the coming weeks.

For more information on child care providers operating during the COVID-19 public health crisis, visit http://www.findchildcare.pa.gov/.


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