Michigan lawmakers push to expand Rx Kids, but does ‘no strings’ cash work?

Michigan lawmakers are weighing a plan to shift Rx Kids — a cash assistance program for pregnant women and infants — under state control
Program officials report $100 million in commitments from public and private donors, including $20 million from the state, with more funding proposed
Supporters cite early health gains and stress relief for families, despite new research finding no measurable developmental benefits from similar cash gifts in early childhood

A bill that would expand cash assistance for new and expecting mothers is finding a trace of bipartisan support as lawmakers consider bringing the program under state control.

The legislation comes at a time when new research is casting doubt on the effectiveness unrestricted monetary payments have in improving child development. A working paper published by the National Bureau of Economic Research found that unconditional cash outlays have no “statistically significant impact” on certain outcomes, such as language skills, during a child’s first four years of life.

The Michigan Senate Committee on Housing and Human Services held a hearing Tuesday to discuss the expansion of Rx Kids, which offers recipients $1,500 during pregnancy and $500 a month for their children in their first year of life. Those receiving the money are free to use it however they like.

Under the proposal, the Michigan Department of Health and Human Services, which has allocated $20 million toward Rx Kids, would be responsible for running the child allowance program.

Currently, the Michigan State University Pediatric Public Health Initiative runs Rx Kids in collaboration with Poverty Solutions at the University of Michigan. The nonprofit GiveDirectly administers the program.

The bill would have the university partnership continue under a state contract and allow for “universal” eligibility within service areas, according to its sponsor Sen. Sylvia Santana, D-Detroit.

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“This cash assistance helps remove economic barriers that often prevent families from obtaining necessary items, such as baby supplies, food, rent, utility bills and clothing,” Santana told the committee, where she serves as majority vice chair. “RX Kids enables at-risk families to seek regular checkups, vaccinations and necessary treatments without the stress of unaffordable cost.”

Rx Kids launched in Flint in January 2024 before expanding to Pontiac, Kalamazoo, Clare County and the eastern Upper Peninsula, where one state lawmaker touted the pilot as “stunning.”

“It’s amazing how this program brings so many people together,” said committee member Sen. John Damoose, R-Harbor Springs. “Finally, we’re doing something we can all agree on.”

‘Crucial support’ for child care

Recipients of the stipend, like Celeste Lord-Timlin of Flint, describe the program as a “lifeline” that eased the financial burden of child care.

“Daycare costs us $1,300 a month,” Lord-Timlin told the committee Tuesday. “It was a stress that I really struggled with throughout the pregnancy until I heard about Rx Kids.”

Lord-Timlin said the program offered “crucial support.” She said the initial payment she received was split between buying essentials for her child, like a stroller and car seat, and covering her own graduate school tuition.

Nearly 9 in 10 participants in the program report feeling more secure in their finances, according to an internal survey, while about 66% say Rx Kids has improved health care access and health outcomes for them and their infants.

Dr. Mona Hanna, director of Rx Kids, told lawmakers the program has given $13 million to 3,000 families since launching, with $100 million in commitments from public and private donors.

Dr. Mona Hanna poses for a photo. — Dr. Mona Hanna, creator of the Flint Rx Kids program, at the Hurley’s Children Clinic ahead of the Flint Rx Kids Baby Parade on July 25, 2025 in Flint. (AP Photo/Emily Elconin)

By providing a “no strings attached” cash infusion during pregnancy and infancy, Hanna said nearly everyone eligible for the program takes advantage of it, helping to alleviate the health burdens of poverty in communities it operates in and allowing for better academic research there.

“We have health benefits that we’re already seeing,” said Hanna. “We are seeing a significant reduction in postpartum depression, a reduction in anxiety and a significant reduction in parental stress. We have a massive increase in prenatal care utilization.”

At what cost?

With RX Kids under the state’s purview, Michigan would face an “uncertain” cost to administer and operate the program, according to a Senate fiscal analysis, with potential “indirect costs for local units of government.”

Referencing the program’s current payment model, the Senate Fiscal Agency estimates the state’s maximum cost would be $750 million to cover 100,000 births. Payments could be reduced by limiting geographic areas covered by Rx Kids.

Santana, who made substitutions to the bill during the committee meeting, said the legislation now puts a 15% cap on the program’s administrative costs rather than 5%.

The Democratic-led Senate has approved a budget that would put an additional $58 million towards the program in the next fiscal year. The House, which has a Republican majority, has yet to approve a final plan.

Program officials dismissed concerns about the cost of administering the program.

“As we continue to grow, that administration gets even smaller with more opportunities of scale,” said Hanna.

Ahead of the meeting, the director of research for the conservative Mackinac Center for Public Policy touted the cash allowance program as a model worth replicating to “reduce waste, increase efficiency, boost effectiveness and decrease costs” in government.

Officials with the Michigan League for Public Policy, the Michigan Council for Maternal and Child Health, the Michigan chapter of the American Academy of Pediatrics and Council of Michigan Foundations also voiced their support for the legislation.

While Rx Kids finds local support, the study released by the National Bureau of Economic Research is giving fodder to critics of cash assistance plans.

The “Baby’s First Years” study is purported to be the first in the US to trace the effects of unconditional cash gifts to low-income new mothers.

Greg J. Duncan, an economist at the University of California, Irvine and one of six researchers who led the study, told the New York Times he and his team were “surprised” by the outcome.

The study points to the COVID-19 pandemic and periods of high inflation as conditions that may have affected results, and that cash alone may not be enough to affect change in young children.

“Additional research is needed to shed light on these various possibilities and to replicate these findings,” the study concludes. “Data from future study waves – which will include direct assessments of child development after a full six years of monthly unconditional cash support – will provide the opportunity to test for emergent impacts later in life.”