AILSA CHANG, HOST:
Across the country, many child care providers are barely staying afloat. As essential as they are, their industry operates on tiny profit margins. And now the Trump administration is rolling back policies aimed at providing stability. The rationale is the prevention of fraud. NPR's Andrea Hsu reports.
ANDREA HSU, BYLINE: Michelle Wright runs two child care centers in Southwestern Illinois, just across the Mississippi River from St. Louis.
MICHELLE WRIGHT: You OK?
(SOUNDBITE OF COUGHING)
HSU: This time of year, bad weather and illnesses can take a toll.
WRIGHT: It's wintertime. It's Midwest.
HSU: Attendance sometimes drops below 70%, which is a problem for Wright, and here's why. Ninety percent of the families she serves qualify for child care subsidies, which the state pays out based on attendance. So when a lot of kids are absent, she may not get paid what she was expecting. She has to scramble to figure out if she'll be able to pay her teachers.
WRIGHT: That staff comes ready to work. Maybe spent gas, maybe took a Uber or a bus to get here. And then six kids are out, and I know the numbers are down. I have to send their staff home.
HSU: It's a unique challenge for those like Wright, who want to serve low-income communities.
WRIGHT: I chose the area because of the need.
HSU: Things would be easier if she had opened her centers in more affluent areas. Families who pay for care themselves typically pay up front, and they're on the hook for the tuition, whether their children come in or not. Subsidy payments here in Illinois and many other states go out after the care has been provided and based on who shows up, allowing for some number of absences. Wright says, this is one reason there's not a lot of high-quality child care in low-income areas. It doesn't make business sense.
WRIGHT: Most people won't take 90% subsidy.
HSU: This issue came to a head during COVID, when many children were out for days. To keep day cares open, more states began paying based on who was enrolled, not who showed up. Turned out to be a game changer for many day cares, giving them predictability. Later, the Biden administration issued a rule mandating all states make this change and pay the subsidies upfront, like private-paying families do. Dozens of states got waivers, giving them more time to comply, but now the rule is getting scrapped altogether.
(SOUNDBITE OF ARCHIVED RECORDING)
JIM O'NEILL: Hello, I'm HHS Deputy Secretary Jim O'Neill.
HSU: This is a video posted by the Department of Health and Human Services in January. O'Neill, who has since left HHS, says requiring states to pay for care up front and based on enrollment created vulnerabilities.
(SOUNDBITE OF ARCHIVED RECORDING)
O'NEILL: Those policies weakened accountability and made fraud easier, not harder.
HSU: This announcement came shortly after allegations of child care fraud erupted in Minnesota. Such fraud is rare, but it does happen. In the past, providers have been found guilty of claiming subsidies for children who weren't in their care. States have moved to safeguard their systems with more oversight, more unannounced visits by state inspectors. Still, child care advocates worry the Trump administration's focus on fraud could get in the way of progress.
DENISE WIESE: Ready?
UNIDENTIFIED PERSON: Get it.
WIESE: One, two, three.
UNIDENTIFIED CHILD: [inaudible].
HSU: At Lemay Child and Family Center in St. Louis County, Missouri, Denise Wiese, the center's executive director, has been looking forward to changes in how subsidies are paid. Last year, Missouri's Republican legislature approved making payments up front based on who's enrolled, not on who shows up. Beta testing has been underway, and...
WIESE: We're hoping by mid-year, that will be throughout the state.
HSU: But late last year, the state announced it needed more time to ensure the new system works correctly and to secure long-term funding because it will be more expensive. Whether the changes happen or not, Wiese is pushing for more investment, sustained investment in child care.
WIESE: We have to take care of the children in our communities. They're the ones that are going to lead this country and lead the state 30 years from now.
HSU: She says the country can't have a stable future without stable child care, Andrea Hsu, NPR News. Transcript provided by NPR, Copyright NPR.
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