By Shira Small

Rising child care costs are a significant barrier to access, particularly for families with low incomes who spend the highest percentage of their income on care. Some families with low incomes can access assistance through the Child Care and Development Fund (CCDF), but this program only reaches one in six eligible children due to significant underfunding. Barriers to access are exacerbated for families of color who are even less likely to access care despite eligibility. When families do receive child care assistance, many of them must still pay a portion of the cost, otherwise known as a copayment. Copayment scales vary from state to state and are influenced by income level, family size, and other factors. However, a history of underinvestment in child care results in low wages and lack of other support for providers which can make copayments complex and unaffordable for families.

COVID-19 child care relief funding and related waiver authority allowed many states to temporarily waive family copayments, but this authority and funding is set to expire soon. The first round of American Rescue Plan Act (ARPA) child care relief funding will expire on September 30^th and the remaining funds will expire in September 2024. Some states have tried to maintain copayment waivers and affordability for families in advance of the funding cliff; California is establishing a no-fee approach for families earning under 75 percent of the State Median Income (SMI) starting on October 1, 2023, and a generous scale for families earning above 75 percent SMI. However, not all states have the budget, resources, or political will necessary to modify their copayment scales to best meet parents’ needs.

The Department of Health and Human Services (HHS) is trying to help, and recently released a notice of proposed rulemaking (NPRM) aimed at addressing some of these challenges by improving child care accessibility and affordability. The NPRM requires that copayments are capped at 7 percent of a family’s income and recommends that states waive copayments for families with incomes up to 150 percent of the Federal Poverty Level (FPL) and for families with a child with a disability. CLASP has highlighted this significant positive step in our recent comments.

The NPRM also calls for Lead Agencies, the departments in each state that administer child care, to post more information about copayment scales. Lead Agencies should use simple, concise language that is accessible to all families, including those with limited literacy and those who speak a language other than English. We recommend that states share a clear definition of copayments, how they are calculated, how frequently copayments must be paid, and how parents and providers were engaged in the process for determining the copayment and sliding fee scale.

Though many states will need to wait until their next legislative session to modify their copayment scale, there are other changes Lead Agencies can make now to help ensure families understand and afford the cost of care. Lead Agencies can clarify different factors that affect copayment, such as household size; whether families pay weekly, monthly, or per child; and other variables. Doing so would help make the copayment scale more transparent and easier to navigate.

A historic lack of investment in child care has created the conditions for an inaccessible and unaffordable child care system, rooted in the devaluation of women’s and especially Black women’s labor in the child care workforce. Without adequate funding, states are forced to make difficult decisions that often result in policies that don’t work well for parents — policies like higher copayments and restrictive eligibility criteria, which lead to far too few eligible families receiving care. Copayments must be more affordable and the system must be clearer to help families access child care, but this is only possible with increased and sustained public investment.