Massachusetts to Boost Reimbursement Rates for Child Care Providers
Board of Early Education Approves Healey-Driscoll Administration’s Transformative Proposal, 6th State in the Nation Federally Approved to Use Cost of Care Data
WORCESTER – Today the Board of Early Education and Care unanimously approved the Healey-Driscoll Administration’s transformative changes to how the state reimburses early education and care providers who accept state child care financial assistance, known as rates. Child care providers across Massachusetts will start to receive at least a 5.5 percent increase to their daily per child reimbursement rate beginning in February 2024, an increase of over $2,000 a year on average per child. They will also soon receive a one-time retroactive payment to account for the increased rates back to July 1, 2023.
The approved rates make significant progress on addressing long-standing inequities in rate amounts by geographic region and age group of children served. Massachusetts will be using the cost of providing care as a metric for setting rates for the first time, investing $65 million from the state’s fiscal year 2024 budget to raise regions with similar economic indicators to the same rate amount. Providers will also start to receive higher reimbursements for infant and toddler care to better cover the true cost of providing care to these age groups.
“I thank the Board of Early Education and Care for their support in approving our transformational rate proposal, setting Massachusetts up to be a national leader in using the cost of care to more accurately and equitably determine reimbursements for our child care providers. These deserved increases will help providers to recruit and retain a high-quality workforce and reduce costs for families,” said Governor Maura Healey. “I also thank the Legislature for their partnership in making historic investments in early education and care this fiscal year. Team Massachusetts is continuing to prioritize making child care more affordable and accessible.”
“We have heard from child care providers that some regions in the state have disproportionately lower rates, and that infant and toddler rates have been too low for too long. Under our administration, and in partnership with the Board and Legislature, today’s approved rates are a big step forward in addressing these past inequities and in our work to expand access and affordability for families across Massachusetts,” said Lieutenant Governor Kim Driscoll.
Rates provide direct needs-based financial assistance to increase low-income families’ purchasing power in the market and help pay for the cost of care. Under this approved rate proposal, Massachusetts is one of the first states in the country to use the cost of care as an additional metric when setting rates. There is growing recognition nationally that a market rate survey alone is not the best metric to use and that the cost of care should also be included, as the price of care is often more reflective of how much parents are able to pay for care and the local market for tuition versus the cost of providing high quality care. Federal rules require states to use a market rate survey or alternative methodology to set rates. Massachusetts is one of the first six states in the country federally approved to move forward with an alternative methodology when setting rates for child care financial assistance.
“Here in Massachusetts, we don’t just want to get ‘back’ to how things were before the pandemic – we are focused on transforming our early education and care system forward towards access and equity for all families,” said Secretary of Education Patrick Tutwiler. “Today’s approved rate changes continue our efforts to transform our state’s child care financial assistance system to be what all our children, families and early education and care providers deserve.”
“Our child care financial assistance programs are a critical tool to expanding access and affordability for families. Today’s approval of our transformational rate increase, in addition to the significant reforms we rolled out in the fall to that make it easier for providers to administer these programs, aim to attract more providers to participate in the state’s system,” said Early Education and Care Commissioner Amy Kershaw. “I want to thank our EEC staff, the Board, and our providers for your partnership in this vital work.”
Examples of rate increases by region and age group of children served in center-based settings include:
“Today’s vote by the Board of Early Education and Care reflects our ongoing efforts to work on equitably supporting families to afford and access high-quality early education and care across the Commonwealth and supporting providers in that pursuit. I am grateful to the Board and the Healey-Driscoll Administration for the thoughtful, data driven approach to the rate proposal. As a Commonwealth, we continue to take steps to in the right direction to address the needs of children, families, and providers,” said Paul Belsito, Chair of the Board of Early Education and Care.
