Michigan budget removes dedicated $20M Rx Kids appropriation

Michigan’s enacted 2027 budget eliminates a dedicated $20 million appropriation for Rx Kids, raising questions about how the program will be funded. Rx Kids has received state appropriations for three consecutive years.

The final budget removes a dedicated appropriation that Rx Kids has received from Temporary Assistance for Needy Families, or TANF funds. According to an analysis by the House Fiscal Agency, lawmakers redistributed the $20 million to five other programs:

• Coordinated children’s health care policy and support ($4.5 million)

• Family Independence Program, child supplemental payments ($2 million)

• Family, maternal and child health administration ($4.5 million)

• Prenatal care outreach and service delivery supports ($4.5 million)

• Special projects ($4.5 million).

Rx Kids, launched in Flint in 2024, provides eligible mothers a $1,500 pregnancy payment followed by $500 monthly payments after birth, for up to 12 months. The program has expanded to more than 60 Michigan communities through state appropriations and private donations.

House Speaker Matt Hall, R-Richland Township, said the budget change will preserve funding for existing TANF programs serving low-income families.

“What we saw last year was that some of these other programs were running a deficit because TANF money was being diverted to this new program, Rx Kids,” Hall said during a July 7 press conference. “It’s less about the future of Rx Kids and more about the future of these other programs. We want to make sure they’re funded too.”

Hall said he personally selected the five appropriations that received the redirected TANF funding. Rx Kids, he added, is not eligible to receive money from those line items.

In an email to CapCon, Rx Kids founder Dr. Mona Hanna said the program expects to remain operational, and she believes funding is still available.

“Our understanding is that the funding is there, and the program will continue to be operational,” Hanna said. “I think we need more time to figure this out.”

Lawmakers have approved more than $291 million in state funding for Rx Kids since its launch.

Hanna told the House Government Oversight Committee on June 2 that the program received $16.5 million in one-time TANF funding for its Flint pilot in fiscal year 2024, followed by $20 million annually in fiscal years 2025 and 2026. It also received a one-time $250 million appropriation from the Healthy Michigan Fund to help fund benefits for families with babies born over a three-year period.

As of June 2, the program had spent about $10.8 million, including about $5.2 million from the original Flint TANF appropriation, $5.4 million from the 2025 TANF expansion and about $236,000 from the Healthy Michigan Fund appropriation.

Hanna said federal TANF dollars reimburse Rx Kids benefits for participants who meet Medicaid eligibility requirements, while private donations and other funds cover those who do not qualify for public funding. Hanna told Bridge Michigan in early July that the program can continue receiving TANF reimbursements under the new budget.

State Rep. Denise Mener, D-Mount Clemens, told the Mount Clemens City Commission that Rx Kids ”hasn't gone away” and that lawmakers ”just moved it to another line item in the budget.”

Hall did not respond to a request for comment, nor did the Michigan Department of Health and Human Services.