Rx Kids, an anti-poverty cash aid program for new and expectant mothers, received $270 million in the state budget that Michigan governor Gretchen Whitmer signed into law Tuesday.
The funding boost, which includes $20 million from the Temporary Assistance for Needing Families program and $250 million from the Healthy Michigan fund, is a one-time grant that's meant to cover the next three years.
Rx Kids provides moms $1,500 direct cash transfer during mid-pregnancy, which is followed by $500 a month for the first months of a baby’s life. To date, the public-private partnership has distributed over $13 million to about 3,500 new families in 11 Michigan communities, according to Luke Shaefer, a co-founder of the program.
Shaefer said he expects the funding boost will allow Rx Kids to reach 30,000 babies a year – multiplying the program’s reach by a factor of 10.
“It's a historic investment,” Shaefer said. “It's a bipartisan investment.”
For families in communities served by Rx Kids, there are no income restrictions or strings attached. Any resident in one of five counties in the Eastern Upper Peninsula, Flint, Kalamazoo, Pontiac or Clare County is eligible to receive funding. The program is expected to expand into Wayne and Oakland counties soon as well.
“Programs that try to calculate people's incomes spend a lot of time doing that work,” Shaefer said, which can make them expensive to operate. “This sort of takes the approach of saying, if you live in a low-income community, you will get served. And then we can clear away all of that administrative red tape.”
The new funding will allow the program to expand into more rural Michigan communities, said Shaefer. Rx Kids uses factors like the child poverty rate and proportion of births covered by Medicaid to understand families’ economic security, Shaefer said.
With Medicaid funding facing uncertainties at the federal level and requiring recipients to submit more paperwork proving their eligibility, increasing funding for Rx Kids is a means to “protect and preserve our state,” State Senator Sylvia Santana (D-Detroit) said.
“We're worried about families having to redetermine their benefits every six months,” Santana said. “I think that from an infrastructure standpoint, that's going to be a challenge.”
Each community where Rx Kids operates must contribute philanthropic money to match state dollars, but it's not necessarily at a one-to-one ratio, Shaefer said. The state uses money from federal block grants to fund Rx Kids.
The amount of money each family receives won’t change anytime soon, but organizers expect that to change as years pass.
“The program is fairly recent, so the benefits haven't lost a lot of real value just yet,” Shaefer said. “They were set sort of after the inflationary increase.”
Rx Kids has received bipartisan support from the Legislature. Santana, who supported the Senate bill that would establish the Rx Kids program under the state Department of Health and Human Services, said she hadn’t heard much opposition to granting the program more money.
“I think when you look at where we are today, it just made most sense to make sure that this program is expanded quickly in order to make sure that we are prioritizing those families.”
The program lowers evictions, postpartum depression, according to a study in the American Journal of Public Health. Another study in Flint found that Rx Kids cut preterm births and low-birthweight births.
Santana said she views Rx Kids as a blueprint for other states in the future.
“I believe it's something that we are at the forefront of as a state, and I think that you're going to see other states come online and do similar programs here in the near future because it is a benefit to everyone.”
