News

On February 1, 2021, Governor Tom Wolf announced an increase to base rates paid to child care providers participating in Child Care Works (CCW), Pennsylvania’s subsidized child care program.

About

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. 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.

Why It Matters

“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 later 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. We all seek to weather the challenges created by the pandemic and the recovery ahead.”

According to the announcement, 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.

“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.”

What is Child Care Works?

Child Care Works 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.

More Information

For more information, read Governor Wolf’s full announcement.