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New Law Tightens Requirements for Earning State-Subsidized Health Care Rhode Island Remains Only State to Offer Health Care to Child Care Providers

At a public hearing tonight, the Rhode Island Department of Human Services (DHS) will begin the process of implementing changes to the state’s existing child care subsidy program. The changes are part of a new family child care program – the Child Care Provider Rite Care (CCPRC) program – that was authorized in the state budget by the General Assembly and signed into law by Governor Carcieri in June.

The new child care program restructures the health care coverage available to self-employed family child care home providers and their dependents, according to Ronald A. Lebel, Acting Director of the Department of Human Services. Changes from the existing program include: increasing the amount that home child care providers must earn from the state before they qualify for state-subsidized family health coverage; limiting coverage to providers earning less than 350 percent of the federal poverty level; and requiring eligible providers to join the RIte Care program to receive health care.

Once the changes to the current law are fully implemented, Rhode Island will still be the only state that offers state-subsidized health care to home based child care providers and their families.

The CCPRC program is designed to address the rising costs to the state of providing health care coverage for home child care providers and their dependents. The cost of the state subsidized child care program has risen 156 percent over five years and cost the state $80 million in 2004. The number of children being served by the program over that time period has increased by only 65 percent, to 13,601 in 2004.

Payment rates to subsidized child care providers in Rhode Island have risen 142 percent since 1997. Even with the changes to the current program, Rhode Island will continue to operate one of the most generous child care subsidy programs in the country. Rhode Island’s payment rates are higher than the subsidies given by neighboring states.

Changes from existing child care program:

  • Increases the amount that home child care providers must earn to qualify for health coverage from the state for themselves and their children. Currently, home based child care providers must earn only $1,800 in state subsidies in order to qualify for free, state-subsidized health care for themselves and their children. In other words, a provider can qualify for free health care after caring for one child over a six-month period. Under the new program, providers will need to earn a minimum of $7,800 in state child care subsidies per a six-month period. This equates to a provider caring for two children over six months.
  • Requires providers who are eligible for RIte Care to participate in RIte Care/RIte Share. As a result of this change, the state will receive 54.4 percent federal Medicaid matching funds for RIte Care participants, thus offsetting the cost of the program to Rhode Island taxpayers.
  • Limits health care coverage to those providers with family incomes less than 350 percent of the federal poverty level.
  • Requires providers who are not eligible for RIte Care to be subject to the same cost sharing and dental benefits as RIte Care enrollees. Currently, child care providers receiving free health care pay none of the co-shares required of the low-income individuals receiving health care through RIte Care.

Who is affected:

  • Of the 911 persons covered under the current program, it is estimated that:
    • Eight hundred seventeen (817) providers and their dependents, or 90 percent, will continue to receive health coverage.
    • Ninety-four (94) providers and their dependents would be ineligible because they do not meet income eligibility guidelines or they do not meet the $7,800 income threshold.
  • Center-based child care providers will not receive any health care subsidy increases.

Why the new program is being implemented:

  • The subsidized health care program for child care providers was established in 1997 to meet the growing need for child care as part of the Family Independence Program, which encouraged low-income Rhode Islanders to get into the workforce. Since then, there is no longer a capacity issue in some communities. Providence, for example, reports the availability of two child care slots for every one child under the age of six.
  • The threshold of $1,800 was set in 1997 when the rate of reimbursement to providers was $70 per week, which meant that a provider needed to take care of more than one child for a six-month period. The reimbursement rate has since more than doubled to $150 per child per week.

Public hearings and briefings on the new program:

  • Details of the program were explained by DHS officials at:
    • Permanent Legislative Commission on Child Care: March 7, 2005
    • House Finance Subcommittee Hearing on Human Services: March 9, 2005
    • Senate Finance Subcommittee Hearing on Human Services: March 16, 2005
    • Advisory Committee on Child Care and Development at DHS: March 22, 2005
    • Permanent Legislative Commission on Child Care: April 5, 2005
    • Family provider help sessions: August 17, 27 and September 6, 2005

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