Proposed Rule 5180:2-16-06 changes the level-of-service authorizations to have higher thresholds for payment categories. It increases maximum hourly authorizations from seven to ten hours, part-time authorizations from 7-25 hours to 10-33, and full-time authorizations from 25 hours or more to 33 hours or more. Providers receiving payment for children authorized for between seven and ten hours of care and 25 and 33 hours of care will see reductions in payments and may ultimately lead to children being turned away because businesses simply can’t afford to have a slot taken up by a child with lower level-of-service needs.
Incorporating all of the proposed rule changes – group ratios, payment rate shifts, and level-of-service authorizations – our calculations show that Type A providers can expect the biggest losses.[1] Type A providers caring for a school-age child authorized for eight hours of care per week will see a 30% decrease in their payment at the base rate. Silver-rated Type A providers in the same circumstance will see a 35% decrease in their payment. That steep reduction will lead to programs opting out of caring for school-age children because they may not meet the new 10-hour minimum for a part-time authorization.
The hourly rates are simply too low to be worth it for businesses. The hourly rate for a school-age child at a Cluster 3 Silver-rated center is a mere $8.05. That’s less than the state’s minimum wage. For childcare businesses to retain quality, experienced staff, they need to be able to pay them what they deserve. Early childhood educators aren’t babysitters: They are certified professionals doing some of the most important work in our state’s economy. They ought to be paid as such.
Raising the level-of-service thresholds will reduce providers’ flexibility — a crucial factor for parents working non-traditional hours. A family needing low levels-of-service will struggle to find childcare, as businesses adjust their intake toward children with higher level-of-service needs and greater payments. Ohio legislators’ decision to cut funding from the Governor’s Executive Budget Proposal will impact not only Ohio’s children, but the economy at large as parents scramble to find alternative methods of childcare.
[1] Using current Center/Type A payment rates compared to proposed Type A/Type B payment rates, with 2022 Market Rate Survey rates.