Market rate for Purchase of Care (POC) in Delaware

Change Indicator

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Why This Indicator Matters

The first five years of a child's life are an important time for growth and development, and lay out the foundations for language, academic ability, habits and socio-emotional development. Research shows that access to high quality early care and education programs help young children grow up ready to succeed in school and life. However, there are large gaps in the quality of early care and childhood programs and not all children receive the maximum benefits from their program. When we invest in replicate high quality programs for children and youth, we can solve these gaps in early childhood development and show significant long-term improvements for children. Investing in  a system of high quality early care and education programs will benefit both young children and society as early investments reap dividends when child development translates into economic development later on.
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Definitions:

Daily market rates at the 75the percentile are used to determine purchase of care reimbursement amounts to early care and education providers.

Market rate = prices providers charge parents for the care of private-paying children. They are prices charged by the providers to unrelated and unaffiliated parents that have not been reduced for special circumstances (e.g. low-income, employees children, etc.)

The 75th percentile is such that 75% of the prices are at or below the price and 25% are above.

Data Source: Delaware Department of Health and Social Services, Division of Social Services

Footnotes:

The effects of COVID-19 on the 2021 Study: The goal of the 2021 Local Child Care Market Rate Study was to perform a census of approximately 1,000 licensed providers in the state. This is in contrast to previous studies where researchers designed a stratified sample of 50% of the providers in the state (about 500 providers). Unfortunately, the onset of COVID-19 seems to have had a detrimental effect on the supply and demand of child care throughout the state. Ultimately, the researchers were only able to make contact with about 70% of licensed providers statewide. Of these, only 447 providers completed the survey. Reasons for not completing the survey included: not serving children in the last month (a sign on decreased demand), serving only subsidized children (disqualified for no private payers), or too busy to complete the survey. In fact, a handful of providers discussed how COVID-19 had made it difficult to conduct business while keeping all employees and children safe from the virus. A few providers were angered at researcher attempts to conduct the survey and the associated outreach performed by the state.

Effective 5/1/19, DSS issued guidance on FFY2019 POC rates. The new rates bring the daily POC rates up to between 48% and 62% of the 2018 market rates- with an average being 59% of the 75th percentile of the 2018 market rates. The current rates reflect an increased rate for most providers and no change for a small number of providers. The Market Rate Study proposed a reduced payment for some of the providers who are curretnly in a "no change" status but DSS chose to grandfather the higher Market Rate so no provider experienced a rate reduction.

Last updated: 01/2022