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Committee presses DHSS over childcare 'purchase of care' changes as April deadline looms; enrollment shift could cost $25M
Summary
Committee members probed DHSS on technical and fiscal impacts of a possible federal requirement to shift childcare subsidy payments from attendance to enrollment, including a roughly $25 million annual cost estimate, summer dual‑enrollment problems that leave families without summer camp options, and the administration’s plan to use funds instead to expand eligibility if the federal rule is reversed.
Representative Williams and multiple committee members spent significant time pressing DHSS officials on the administration’s handling of the purchase‑of‑care childcare subsidy program and a fast‑moving federal rulemaking timeline.
Key point: federal rulemaking from the Biden administration would require states to move from attendance‑based payments to enrollment‑based payments for subsidized childcare beginning April 1. DHSS told the committee that implementing that change as written would cost the state roughly $25 million annually.
DHSS position and contingency: Secretary Kristen Link Young said the governor’s recommended budget includes funding assumptions and epilogue language that would direct resources differently depending on federal action. If the federal government reverses that rule (administration guidance at the time of testimony indicated such a reversal was possible), DHSS would keep the attendance‑based system and use the newly available funds to expand eligibility (the GRB contemplates raising the 'door' to purchase of care from 200% to about 250% of the federal poverty level).
Operational concerns raised by members: Committee members described practical problems if Delaware is required to shift to enrollment payments, including duplicate payments when families change providers, the need for stricter absence‑day enforcement so states do not pay for unenrolled days, and a technical ‘dual authorization’ issue that prevents families already enrolled during the school year from securing summer program seats.
Representative Williams asked whether the state could track enrollment to avoid double payments and how absence rules would be enforced; DHSS said the department is technologically ready to make the change but would need stricter rules and back‑end audits to limit inappropriate payments and would provide more detailed implementation plans and cost estimates to the committee.
Provider rates and family impacts: Members also raised concerns about provider rates (including a separate three‑tier special‑education rate that currently lacks funding) and co‑payment rules. DHSS said some rate increases (mental health, McNesby‑related rates) are proposed in FY27 while other recommended increases for home‑and‑community caregivers are not included in this GRB cycle because of fiscal constraints.
Next steps: DHSS committed to provide the committee with more precise cost estimates for alternate approaches (including the effect of expanding eligibility thresholds and the cost to implement strict absence rules) and to follow up on dual‑enrollment technical fixes so families are not shut out of summer care.
