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Page 4 | December 9, 2025 Health and Human Services: Childcare Assistance Extension of Previous Childcare Assistance Research

Previous CCPI research found that the number of licensed childcare slots the state has proportionally decreased between fall 2019 and spring 2023. Additionally, the decline in slots was primarily in registered homes, which predominantly serve families of color and lower-income families. LFC extended this research and found, between fall 2019 and spring 2025, the number of overall licensed childcare slots have increased slightly but the number of registered homes decreased by 9,482–or 75 percent. Moreover, CCPI research found the lowest income families were less likely to be served following expansions, and LFC staff found similar results with the number of low-income families served. Finally, extending research found in LFC’s 2025 Early Childhood Accountability Report, the number of children under the age of 2 being served has decreased since ECECD began expanding childcare eligibility.

ECECD commissioned a series of reports from a research group known as the Low Income Investment Fund (LIIF) examining supply and demand aspects of childcare through administering surveys and examining administrative data. Similarly, LIIF reports cited similar gaps in capacity for children under 2, with long waiting lists and the issue is more pronounced in some communities than others. Barriers cited in surveys included staffing, transportation, and information gaps with the state’s Childcare Finder not being used as intended. Similarly, a parent survey reflected little to no use of that platform, pointing to a disconnect between available resources and family decision-making. Additionally, some providers do not want to expand or grow their capacity.

Registered Homes. A registered home is a childcare center that operates out of an individual’s home and cares for a smaller number of children. These homes make up a small overall proportion of the provider system, but tend to serve higher-poverty families and rural areas. The LIIF studies found the decline in the number of providers was driven by a reduction in registered homes in the childcare system, stating, “Smaller facilities such as registered homes and licensed family and group homes make up a relatively small share of the total supply, but these providers often serve smaller and rural communities as well as demand from linguistic or cultural minority groups.” Registered homes are not Crowding Out in Medicaid following Expansion After the expansion of Medicaid in 2014, of those states that chose to expand eligibility, spending on low-income children was lower than in non-expansion states, with New Mexico showing a decrease in overall spending for low-income children. In 2010, the federal government passed the Affordable Care Act, which expanded eligibility of Medicaid for low-income nondisabled adults. According to research by the Mercatus Center at George Mason University, one of the unintended consequences of this expansion was a shift of financial resources away from children in expansion states, a shift that also occurred for older disabled individuals. Specifically, in non-expansion states between 2013 and 2019, 5.3 percent more children enrolled in Medicaid compared to a 3.4 percentage point drop in expansion states. Furthermore, per capita spending on children was significantly less in expansion versus non-expansion states, with spending on children growing 22.7 percent in non-expansion states between FY13 and FY19 while spending only grew 5.9 percent in expansion states. In New Mexico, spending for children actually decreased from FY13 to FY19 by 5.5 percent. Furthermore, for the aged population, similar trends were shown, with per capita Medicaid spending on the aged with growth averaging 19 percent in non-expansion and an average growth of 12.7 percent in expansion states. Source: Mercatus Center at George Mason University