Abe Funk, the owner of John’s Pharmacy in Cape Girardeau, Missouri, wasn’t looking to get into the childcare business. But he was looking to keep his pharmacies staffed. 

He kept running into the same problem: Workers were struggling to find childcare they could afford, and that stayed open through their shifts. 

After an employee approached him and said she’d likely have to leave work after giving birth to her second child, Funk went to his wife determined to find a solution. 

“I was like, ‘I’m done with this. We’re going to open a daycare,’” Funk said. 

Funk said the daycare, which he opened in 2023, has helped him retain and attract staff. While it’s a cost he takes on, not providing daycare brings on other costs, he said. 

“It’s like any other benefit, like a 401(k) or healthcare,” Funk said. “You’re not making anything on it, you’re paying into it, but if we didn’t have staff, we couldn’t stay open.” 

Then, in 2025, Missouri launched Child Care Works, a program that helps employers pay for the cost of childcare for their employees. 

Funk signed up, adding state assistance to the support his pharmacy already provided. 

Now, Missouri has awarded $1.46 million in federal Rural Health Transformation Program funding to expand childcare support for rural healthcare employers and help communities address shortages. 

Helping parents stay on the job 

For Funk’s employees, the state’s contribution through Child Care Works helps fill a gap that the pharmacy’s own assistance hadn’t completely closed. 

The business already covered about half of the childcare costs as an employee benefit. But some workers still struggled to cover the rest, Funk said. They earned too much to qualify for other childcare subsidy programs, but not enough to comfortably pay for it themselves. 

Child Care Works brings employers, families and the state together to share the costs. Employers can offer the benefit without opening a daycare of their own, as Funk and his wife had done.  

The One Big Beautiful Bill Act, or H.R. 1, expanded a federal tax credit that eligible employers can use to offset their child care contributions, and it created the Rural Health Transformation Fund that Missouri is now tapping to expand Child Care Works. 

H.R. 1 is expected to equate to $17 billion in losses in federal funding in Missouri alone, KFF estimates. But the Rural Health Transformation Fund set aside $50 billion to be divided among states to help offset those losses. In the first year of funding, Missouri received just over $216 million under the fund. 

Brian Schmidt, the executive director of Kids Win Missouri, which oversees the program, said 32 employers are actively offering childcare benefits through the program, with more working through enrollment.

“In a lot of ways, you’re almost launching a new employee benefit that employers can offer,” Schmidt said. “We have several more employers in the pipeline that are onboarding into the system right now.” 

The new federal rural health funding will support paying for childcare and the state’s efforts to identify local shortages. 

About $750,000 of the new funding is reserved for direct childcare costs, Schmidt said. Kids Win Missouri estimates that would cover costs for about 250 kids. 

The remaining funding will expand community planning efforts, Schmidt said, with a goal of reaching eight rural health hubs throughout the state under the Rural Health Transformation Program over the next year. The federal dollars will bring together parents, childcare providers, employers, schools and healthcare providers to parse out each community’s needs and create plans to address them. 

For employers weighing whether to try the program, Schmidt said staff turnover and productivity issues carry their own costs. 

“Doing nothing has a cost, right?” Schmidt said. “Because it’s harder to attract (employees), it’s harder to retain.” 

“I really think they have to think about it from a very dollars and cents perspective,” he said. “Often a lot of employers will be able to save some money because they are offering the childcare benefit, making it easier for their workforce to access childcare.” 

Finding childcare is another challenge 

But helping parents and employers pay for care only tackles part of the problem. In rural communities, finding an available opening can be just as difficult. 

Rural Missouri has considerably fewer childcare spaces relative to its population than more urban parts of the state, which also don’t have enough. 

A March analysis from the University of Missouri Extension found non-metro counties averaged 2.9 childcare slots for every 10 children younger than 5, compared with 5.1 slots in metro counties. 

“Rural areas are more likely to be childcare deserts, and more likely to have access challenges,” Schmidt said. 

Since early 2025, Missouri has lost at least 94 childcare facilities, the MU Extension analysis found. When accounting for losses in productivity, staff turnover, lost wages and reduced tax revenue, the state’s childcare shortage exceeds $1.1 billion in economic losses annually. 

Child Care Aware of America puts Missouri’s average monthly price of full-time childcare at $1,036 per child, or about 15% of the median household income for families with children under 6. 

For single-parent families, the price of childcare jumps to 36% of the median household income. 

Patty Cantrell, the project development director at New Growth, a community development corporation based in El Dorado Springs, Missouri, has been helping get the new Child Care Works perk established in her area. 

Across the region, Cantrell said, families are navigating the provider shortage and affordability problems daily. Parents sometimes travel to other counties to leave their children with relatives, then double back to get to work. 

“In rural areas, it’s a big struggle with people having to go long distances because they’re trying to patch together care,” Cantrell said. 

New Growth has worked with four rural counties to develop a childcare action plan. So far, Cantrell said, seven employers have signed up for Child Care Works and are being onboarded to provide the benefit to their staff, including childcare businesses, a manufacturer and a food truck. 

And expanding care beyond typical daytime hours brings another challenge, Cantrell said. Providers need enough families using those hours to cover the cost of operating, which can be difficult in small communities. 

“It’s a real stress on people,” Cantrell said.