The Child and Adult Care Food Program (CACFP) is the federal program that reimburses child care providers when they serve healthy meals and snacks to children in their care. On July 24, the USDA published the updated CACFP reimbursement rates for child care centers and home-based child care for this program year (July 2025-June 2026).
Each year, the federal government reevaluates the reimbursement rates for the Child and Adult Care Food Program (CACFP) using the Consumer Price Index, as mandated by Congress. The modest CACFP reimbursement rate increases this year, only 2.23% for home-based child care, amounts to 4 more cents for a breakfast, 7 more cents for a lunch, and 3 more cents for a snack. For a Tier 1 home-based provider serving 7 kids two meals and a snack, this could mean a monthly increase of only $21.56. That is simply not enough to make a dent in the high cost of food and other hardships child care providers face.
The annual percent changes required in the federal child nutrition law are building on insufficient rates overall. The inadequacy is a long-standing problem. USDA’s latest cost estimate found the reimbursements covered a relatively low percentage of the total food costs to produce the meals and snacks: 26% of breakfast costs, 35% of lunch costs, and 21% of snack costs, on average. And does not substantially address costs associated with labor for shopping, food preparation or related paperwork.
As a result of the recently passed H.R. 1 bill, signed by the President in early July 2025, millions of families will face reduced access to SNAP and Medicaid. This change is expected to have a cascading negative impact on access to school meals and the Child and Adult Care Food Program (CACFP).
CACFP reimbursement rate tiers are commonly determined by the percentage of low-income students participating in area schools and qualifying for free and reduced school meals. Fewer participants in SNAP and Medicaid will result in children not being able to automatically qualify for free school meals thus decreasing the number of children with low-incomes participating in the school meal programs. The reduction in the number of students with low-incomes participating in school meals will push more home-based child care providers out of Tier 1 into Tier 2, where the reimbursement rate is about fifty percent less.
Feeble rate increases and threats to home-based child care provider eligibility in CACFP, SNAP and Medicaid will increase hardship for child care providers, reduce access to healthy food for young children and strain family budgets.
Read this short brief to learn more here.
