Did Rx Kids lose $20M in Michigan budget deal? Depends who you ask

Lawmakers scrambling to finalize the state budget last week deleted a $20 million line item to Rx Kids, a program providing cash, no-strings-attached, for pregnant and new moms
Republican House Leader Matt Hall says under the new state budget, that money is now off the table for the program
But Rx Kids leaders say they can still tap into those funds

Lawmakers may have finalized the state budget Friday, but confusion lingers over a controversial line item that’s missing: $20 million intended for Rx Kids, the no-strings-attached cash program for pregnant and new moms.

The line item was struck last week in final negotiations between Michigan’s Republican-led House and its Democratic-led Senate. The $20 million in federal funding was reallocated to five other programs that, like Rx Kids, are supported by the Temporary Assistance for Needy Families (TANF) program, according to an analysis by the nonpartisan House Fiscal Agency.

Rx Kids can still tap into the money — at least for program participants who are on Medicaid and therefore, are defined as low-income, Dr. Mona Hanna, the Flint pediatrician who has spearheaded the Rx Kids effort, told Bridge.

In an email to Bridge Michigan Monday, Hanna said she was “happy to share with confidence that Rx Kids will continue to be funded and operational.”

The $20 million TANF authorization “is still in the omnibus budget,” she wrote. “The fact that our program survived this difficult budget process is indicative of its success and the faith Michigan communities have in our work.”

TANF funds have been a significant contributor to Rx Kids, which launched in Flint and offers $1,500 mid-pregnancy cash assistance and then $500 a month up to a year of the baby’s life.

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Since its launch in January, 2024, the program has “prescribed” $48.8 million to 13,685 families, according to Rx Kids. The state last year also approved $250 million from the Healthy Michigan Fund — public health dollars — to expand the program with oversight by Michigan State University.

Early studies suggest babies with Rx Kids backing have better health outcomes, even as the program’s economic benefits exceed the dollars it spends. And on Tuesday, Rx Kids announced it was expanding to Cleveland, its first expansion outside of Michigan.

But the program has been a hard sell to some Republicans.

The money is no-strings-attached, meaning families of any income bracket are eligible, and there is no accounting for how the money is spent.

When pressed about cuts specifically to Rx Kids, House Speaker Matt Hall on Tuesday said that not only did the budget remove $20 million in funding from the program — but that the money was subsequently disbursed into funding pots Rx Kids “wouldn’t be able to get to.”

The Richland Township Republican didn’t say why, other than to note that in “my view is that they will not be eligible” for the $20 million now going toward the five other TANF funds that include funding for coordinated children’s health care policy and supports, as well as prenatal care, outreach and delivery service support.

He also criticized Rx Kids for providing cash assistance to undocumented mothers — something the program acknowledged but said those dollars were private funds and not public tax dollars.

Instead, Hall said the funding will be used to “shore up long established programs” like WIC (federal benefits for low-income infants and children) and child protective services, which do have more strict requirements on who’s eligible for these funds and what those dollars can be spent on.

“Instead, we need programs that are really looking at people with legitimate financial need,” Hall said. “People that are American citizens, over here legally and ensuring that they’re getting the things they need to live healthy and to get back on their feet so that they can eventually get an education or get a job.”

A spokesperson for Hall later clarified that was because these pots had reporting requirements for things like income eligibility, which Rx Kids does not require participants to report when applying for the program.

Should Rx Kids try to collect these funds, “then I’ve got a lot bigger problems than that, because basically that would mean that all trust is broken with the Whitmer administration,” Hall said, arguing it would amount to Rx Kids taking money they “should not be eligible for.”

Woman in a medical lab coat holds a baby in a room full of people. — Rx Kids launched in 2024, led by Flint pediatrician Dr. Mona Hanna. It now covers dozens of Michigan communities, including the entire Upper Peninsula. This fall, it will expand out of state for the first time, to Cleveland, Ohio.(Robin Erb/Bridge Michigan)

But Hanna said Rx Kids can, in fact, tap into the TANF funds that have been redistributed. In fact, the program has received TANF funds in three previous budget cycles — for a total of $56.5 million, although some of those funds were clawed back in December.

Rx Kids staff do not ask participants about their income when they apply, but back end “data matching” confirms some mothers’ Medicaid benefits. In those cases, Rx Kids benefits are reimbursed with TANF funds.

Those who aren’t on Medicaid are covered by other funds, including those from donors and the $250 million in public health dollars.

The process “has been approved by the state and the federal governments for three years,” Hanna said.

For now, it’s unclear what will happen — something that state Sen. Jim Runestad, R-White Lake, acknowledged.

The five TANF funds that replaced the Rx Kids line item cover costs for maternal and child health services similar to those offered by Rx Kids, said Runestad, who also chairs the Michigan Republican Party.

“It is unclear if the money will end up going to the specific program called `Rx Kids,’ but it definitely looks like the money will be spent for similar purposes,” he said.

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