Estimating minimum adequate foster care costs for children in the United States

Although foster care homes play a crucial role in providing stable placements to children who enter the child welfare system due to maltreatment, there is currently no federal minimum rate nor standard methodology to establish adequate rates to support foster parents to meet these children's needs. Therefore, it is important to establish a model to estimate the real costs associated with caring for children to serve as a foundation for states to set adequate reimbursement rates. The objectives of this study are to: use the methodology of a 2007 study to establish foster care minimum adequate rates for children (MARC) based on the child's age and geographical location in every state; update the MARC with cost of living adjustments to 2016; examine changes in gaps between the MARC and the current foster care rates; and identify states that have made increases to their reimbursement rates, relative to the MARC over time. Results found that all but four states provide lower foster care reimbursement rates than the adequate costs in 2016. This study recommends that, at the federal level, enhanced precision in operational definitions of care categories could increase consistency in the way that states reimburse foster families. Additionally, findings provide policy suggestions to establish a national methodology standard and increase foster care rates to the level that will meet children's needs. This study will enhance the scant body of literature found on establishing an economic model to estimate foster care costs.