The reimbursement rates defined in CCDF plans are a critical choice that states make when administering their subsidy program. The plans comprise comprehensive documents that are hundreds of pages long, with numerous questions ranging from basic information such as which agency administers the program to very niche and specific questions such as where states list searchable data to find providers. These plans cover a wide range of information, including who is eligible for the program and how much a state will reimburse a participating child care provider. State agencies responsible for executing the child care subsidy program must submit their Child Care and Development Fund (CCDF) plans every three years. In fact, data analysis has shown that the true cost of providing child care exceeds not only the reimbursement rates provided by subsidy programs but also the price charged to families. The reliance on market rate surveys builds low wages, low benefits, and low capacity into the child care system going forward. These surveys measure what providers charge at a single moment in time, which states then use as the basis for their subsidy reimbursement rates for up to three years. However, the state-determined subsidy rates for administering the Child Care and Development Block Grant (CCDBG) program are too low and are predominantly determined through a method-market rate surveys-that will never meet the real financial needs of child care providers. Throughout the pandemic, new funding helped many states provide greater reimbursements to providers participating in the subsidy program. Scarcity of resources has led to too few child care providers and too few staff, making child care far too expensive and inaccessible for American families. The child care industry in the United States has been rocky, at best, since long before the COVID-19 pandemic.
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