Report to Senate caucus: Kansas child-care subsidy underused; report recommends direct payments and streamlined enrollment

David Jordan, president and CEO of the United Methodist Health Ministry Fund, told the Senate Early Learning Caucus that Kansas' child-care subsidy program is underutilized and that administrative design is a key barrier to broader use.

"Families up to about a family of 4 earning up to about $75,000 a year is eligible for child care assistance. However, just 12% of families are participating," Jordan said, summarizing the foundation's analysis of a spring 2024 survey and report led by Kansas State University researchers. The fund surveyed more than 300 providers representing 93 of the state's 105 counties.

Jordan said 60% of surveyed providers were approved to accept subsidy and roughly half reported serving at least one family who receives assistance. The study found a roughly $50-per-month difference in what centers receive from subsidized versus unsubsidized families and identified several non-rate barriers that reduce provider participation: prior negative experiences with the subsidy program, logistical challenges getting approved, administrative burden for providers and families, and lack of clarity about how the program operates.

A central operational concern, Jordan said, is that subsidy payments in Kansas are loaded to a family's EBT card and the family pays the provider, rather than the state paying providers directly. "We are 1 of 4 states that doesn't pay child care providers directly for child care assistance," Jordan said. He and the report suggested that direct payments to providers would reduce uncertainty about payment, lower administrative time spent by providers on payment inquiries and improve provider willingness to participate.

Jordan outlined five recommendations from the report: examine and streamline existing systems and paperwork; adopt direct payment to providers; assess alternative fee structures; increase outreach and information to dispel myths about subsidy recipients; and expand provider supports and technical assistance. He said the Department for Children and Families (DCF) and the Children's Cabinet have been receptive to the recommendations and that adopting direct payments could be accomplished administratively rather than through statute.

During Q&A, members of the caucus asked about costs and whether direct payment might save state funds. Jordan acknowledged some upfront implementation costs but said other states use a range of models and that a targeted, cost-effective approach might be possible. He also noted philanthropy and employer contributions as potential supplemental funding sources.

Materials summarizing the report were distributed to caucus members.