Policy Brief: LR378 (2022) | Child Care Subsidy Reimbursement Rates

Like other states, Nebraska uses a market rate survey to determine how much a child care provider will be reimbursed for serving children who qualify for the child care subsidy. Reimbursement rates are affected by children’s age, program type, program quality and location. The market rate system for setting subsidy reimbursements does not reflect the true cost of delivering quality child care, even for families who pay for child care services privately. Because state statute prevents providers from claiming subsidy reimbursements above what they can realistically charge for private pay, it severely undercuts the financial viability of child care programs. This brief examines alternative methods for setting subsidy reimbursements that combine market rate data with other factors that can make participation in the child care subsidy program more feasible for Nebraska’s providers.