Editor’s Note: When this blog was published, the Nebraska Child Care Market Rate Survey Report 2025 (MRS) was not publicly available. It has been released since then and First Five Nebraska will provide additional analysis and commentary on the 2025 MRS soon.
New child care subsidy reimbursement rates went into effect July 1. The updated rates aim to better support providers and ensure more families have access to quality child care. Understanding the specifics of the new rates can help ensure providers are receiving the correct reimbursement and making the most of available resources. 
Understanding the maximums
For licensed child care alone, excluding fees, there are 128 subsidy reimbursement rates. The published rates are the maximum reimbursement a licensed child care provider can receive and are determined by several factors:
- The age of the child: Infants, toddlers, preschoolers and school-aged children have varying rates.
- Provider type: Whether the provider is a licensed family child care home or a child care center.
- Quality Rating: The provider’s accreditation or Step Up to Quality (SUTQ) rating.
- Time in care: The amount of time a child is in care (half day or full day).
- Location: Whether the provider is in an urban or rural county.
The 75th percentile: A closer look
The current base rates are set at the 75th percentile of the 2025 Market Rate Survey. While the rates have been released and are in effect, the Market Rate Survey has not been released publicly.
When a rate is set at the 75th percentile, it means the rate is equal to or higher than what 75% of Nebraska child care providers charge for that service. For example, the rate for full-day infant care in a rural county is $45.50 a day, meaning 75% of rural child care providers charge $45.50 a day or less.
Setting rates at this level means they should be sufficient to cover the full price of child care for 75% of licensed providers. It’s similar to a child’s height or weight chart—being in the 75th percentile means your child is as tall or taller than 75% of children their age.
Private pay vs. subsidy rate
It’s important to note that while the rates are set at the 75th percentile, not every child care provider will receive the full amount. Nebraska statute states that child care providers are reimbursed at the posted subsidy rate (75th percentile) OR the rate they charge families who pay privately, whichever is less.
- If a provider’s private pay rate is less than the base subsidy rate: Subsidy reimbursement will be equal to a provider’s private pay rate.
- If a provider’s private pay rate is higher than the base subsidy rate: They will be reimbursed at the posted subsidy rate.
Can providers increase their reimbursement rate?
Yes, child care providers who are accredited or have achieved a certain level in Step Up to Quality can earn higher subsidy reimbursements.
- Step Up to Quality rating: Reimbursement rates increase by 5% for providers who are accredited and/or achieve Step 3 in Step Up to Quality.
- Additional Step Up to Quality steps: Reimbursement increases by 5% for every additional step achieved in Step Up to Quality.
Quality increases are an exception to the private pay rules and may lead to reimbursements that are higher than the provider’s private pay rate.
Urban vs. rural
Subsidy rates also vary between urban or rural settings, with urban counties receiving higher rates due to higher costs of living and service delivery. For child care subsidy purposes, the Nebraska Department of Health and Human Services designates counties as either urban or rural.
- Urban counties: Lancaster, Dakota, Douglas and Sarpy counties.
- Rural counties: All other counties in Nebraska.
By understanding how subsidy reimbursement rates are calculated and what factors influence them, providers can better plan and potentially increase their reimbursements.
