Alaska expands child care aid to more working families and raises provider rates Dec. 1

Alaska will open child care assistance to more working families and pay providers more starting Dec. 1, under rules Health Commissioner Heidi Hedberg adopted Oct. 14.

Families earning up to 105% of the state median income will qualify, up from 85%. For a family of four, that's $11,257 a month, or about $135,000 a year, up from $9,113 a month. Those newly eligible families fall into a new category called PASS V. The Legislature set the 105% limit in Senate Bill 95 in 2025.

Families will also pay less. Copays rise with income but will top out at 7% of a family's gross income, down from 9%, and the cap covers the whole family rather than each child. A family of four at the new income limit would pay $788 a month.

The state is replacing the rate schedule it has used since December 2021. The full-time monthly rate for an infant at a licensed Anchorage center rises from $1,135 to $1,400, and in Mat-Su from $805 to $1,050. The infant rate now covers children through 18 months instead of 12, and children stay at the preschool rate through age 5, a year longer than before.

Two Ketchikan parents asked the state to stop using its Market Rate Survey to set rates, saying it leaves Ketchikan far below other Southeast communities. Ketchikan's infant center rate rises from $840 to $1,111. Every other Southeast region on the new schedule gets $1,400. The department replied that their comments had been received.

The department got 16 written comments, most of them supportive. Denali Preschool and Learning Center, the Denali Borough's only state-licensed child care center, asked whether there would be enough money for every eligible PASS V family and whether those families could end up on a waitlist. The department's response to comments doesn't say. Hedberg's adoption order says, "This action is not expected to require an increased appropriation."

The center's co-director, Monica Magari, described a single parent with a well-paying seasonal job who earned too much to qualify, then cut back work hours and switched to cheaper babysitting. "Expanded eligibility will have limited practical value if families remain responsible for both a substantial contribution and a large difference between the State's approved rate and the provider's tuition," she wrote.

The rules also add a category for children receiving protective services through the Office of Children's Services, and keep the $1 million asset limit. In substance, they match what the department proposed July 30.