A return to pre-pandemic childcare subsidy reimbursements has some Missouri childcare providers feeling left in the lurch.
During the early days of the pandemic, Missouri’s Children’s Division increased the amount of money childcare providers were reimbursed when working with low-income and foster families who qualify for a subsidy.
Originally, payments to childcare facilities was based on attendance. This changed to payments based on “full authorization," or the total number of kids, who qualify for the subsidy, the facility can serve. This was intended to lessen the impact, and financial burden, of the pandemic on childcare providers.
The state also took other steps in their “Coronavirus Aid, Relief, and Economic Security (CARES) Act Child Care Plan” including one-time payments to facilities that were open to the children of essential workers or those who would watch children during non-traditional hours. They also expanded the number of people who qualified for the subsidy by opening it to low-income families who were facing unemployment due to the pandemic.
According to a Department of Social Services spokesperson, the original change to subsidy payments for “full authorization” was only for March through June, and DSS then extended those through July 2020.
Casey Hanson, the Director of Outreach and Engagement for Kids Win Missouri, said this is true. But communication about the timing of the halt in subsidy payments seems to have caused some confusion.
On August 18, Governor Mike Parson wrote in a Facebook post about childcare facilities. His page said:
“In order to ensure that our child care providers stay in business, and the number of child care slots are not impacted by COVID-19, our administration has paid our child care providers on their full authorized amount. This authorization has been provided to 2,300 child care providers across the state, and we plan to continue this payment through August,” Parson wrote.
Through August: Hanson said the words – through August – made many providers and advocates believe that the modified subsidy reimbursement would continue to cover all services rendered through the end of August.
But, as subsidy payments are paid after care is provided – paid in August for care provided in July, etc. – the original state plan only intended for the increased reimbursement to be paid through August, which meant covering only the care provided through July 31.
Hanson said this is why an email sent out by Children’s Division on Wednesday, September 2, caught providers and advocates off-guard.
The email reads: “child care subsidy payments for August 2020 will return to normal and be based on the child’s actual attendance. Child care providers should submit August attendance via their normal method.”
Hanson said many were expecting to be paid for care provided through August at the increased reimbursement rate, and these changes to pre-pandemic guidelines have some losing significant income. One provider, she said, went from getting nearly $20,000 in a subsidy payment to just $8,000.
“It’s a stressful time for childcare providers, especially for those who provide care to a high percentage of subsidy children,” Hanson said. “Because, you know, in normal circumstances, there's no money to be made, and in these current circumstances - it's especially bad. It's been a very challenging week for them following just a number of challenging months, and so, the level of stress and anxiety in the provider community right now is very high.”
Hanson said some providers are already making hard decisions because of the change – like laying off staff, turning away families who use the subsidy or spending less money on COVID-19 precautions.
These COVID-19 precautions comply with CDC-recommended guidelines, including smaller teacher-to-child ratios, social distance policies, not allowing parents in buildings, the use of PPE and more stringent cleaning procedures.
But these precautions also increase the cost of operating a childcare facility and reduce the capacity of how many children can be safely served.
Hanson said she’s spoken to providers who don’t know how long they’ll be able to stay open and some who have already closed. There are eight counties in the state that don’t have a licensed childcare center in the county borders and more counties are at risk of becoming childcare deserts. Which, Hanson added, impacts an entire community.
“We are worried about if childcare centers close down, if they permanently closed, will they reopen?” Hanson said. “Then will kids have the care that they need? Will working parents be able to find the care that they need for their kids in order to be able to work? Will that impact the rest of our economy if parents don't have care and kids don't have a stable place to be?”
Hanson said that there are things that government – at all levels – can do to help. Congress can pass a new relief package. Local communities can look for emergency grant funds or use CARES Act funding.
And she said the organization is calling on the state to use available funding to extend changes to subsidy payments – from attendance to full authorization – through the end of the year to help keep facilities afloat.
“We have $100 million of Child Care and Development Block Grant funds the state can access immediately to address this, and we understand that the state needs to hold on to some of that money to have reserves,” Hanson said. “But we can't save all of the money for a rainy day when we're in the middle of a hurricane.”
Hanson added that extending the modified subsidy payments would also give providers more time to prepare.