Quality, affordable child care holds the key to improved lives for all – better futures for children, greater economic opportunity for families, and increased workforce capacity for local and state economies. Unfortunately, today in the U.S., many struggle with the far-reaching impacts of a looming child care crisis. Despite recent job market growth, research shows that 77% of families face difficulties finding child care, citing barriers such as a lack of available providers, increasing costs, and complexities in application and enrollment processes.

In many areas, families may need to miss work or make child care arrangements to complete the benefits application process, and for families already lacking access to child care, this can present significant hurdles. Administrative challenges like this help explain why 47% of families believe the government is to blame for difficulties accessing child care. Meanwhile, however, many government agencies are under-resourced in terms of both staffing and funding, many agency workers put in overtime hours trying to accomplish the tasks set before them, and many child care providers find the government benefits processes too difficult to be worth navigating.

Something about the child care system isn’t working, and how we move forward needs to change.

What would a family-centric, provider-friendly child care system require? How would it function? The Affordable Care Act (ACA) of 2010 and the related development of state-based health insurance marketplaces provide useful insights into these questions.

The ACA was created to make health insurance more affordable and accessible and, ultimately, to reduce the number of individuals and families without insurance. Since its enactment in 2010 up through the most recent data in 2023, the national uninsured rate for all ages has dropped from 16% to 7.7%, less than half of what it was before the ACA (Assistant Secretary for Planning and Evaluation, HHS). If the successes of the ACA could be replicated within the child care sector and the number of families lacking child care reduced by comparable amounts, the positive impacts would be felt across the nation.

What can we learn from the ACA to help achieve such results in child care? First and foremost, the ACA facilitated an ongoing, historic decline in the nationwide uninsured rate by engaging process improvements along with technology solutions. The ACA expanded eligibility and streamlined requirements for insurers but also established online health insurance marketplaces to make comparing and selecting plans easier and to support the distribution of federal subsidies, leading to more accessible and affordable health insurance options. A similar approach to child care – with changes to both policy and technology – shows great promise, and the timing happens to be perfect.

New rules were recently passed by the Administration for Children and Families to strengthen the Child Care Development Fund (CCDF), and these rules mirror several of the policy improvements ushered in by the ACA for health insurance. The new CCDF rules lower the cost of child care for families, improve and streamline payment practices for providers, and reduce program bureaucracy to make services more accessible for all. While these new rules stand to radically improve the child care ecosystem, to unlock their full potential for positive change, agencies should consider implementing technology solutions and virtual marketplaces to support the new rules – similar to how healthcare.gov and state-based health insurance exchanges support the ACA.

Child care exchange (CCX) solutions have the ability to integrate data sets and automate processes, facilitate real-time verification and presumptive eligibility, simplify enrollment and administration, and enhance the capacity of child care staff, leading to improved experiences for everyone involved in the child care ecosystem. Children and families gain access to benefits faster without the hassle of missing work or arranging for child care and are tasked with less paperwork because the state takes over the responsibility of finding documentation to verify eligibility. Providers are able to focus more on children because they can interact with the state at a time that works for them, and regulatory tasks are made less demanding through automation and technology support. State agencies likewise benefit from streamlining and automating processes but also from gaining data-driven insights into where care is needed, where it is lacking, and where increased capacity would be of greatest benefit. Furthermore, a CCX solution can provide the flexibility states need to adapt to changing policies and shifting demands.

As the ACA has demonstrated in the realm of health insurance, when thoroughly researched policy revisions meet well-designed technology solutions, there is immense potential for positive change. With the new CCDF rules in place, the child care ecosystem is well-poised for a long-overdue transformation. We believe a CCX solution designed to support the new CCDF rules is key to making the most of this transformation and alleviating the child care crisis across the nation.

Learn more about C!A’s end-to-end, integrated self-service child care delivery solution.