Health Insurance in Michigan for 2026: What Residents Need to Know About Expiring ACA Credits
Dec. 28, 2025 — As the new year approaches, hundreds of thousands of Michigan residents face significant changes in their health insurance coverage and costs due to the expiration of key Affordable Care Act (ACA) tax credits and federal Medicaid funding cuts.
Expiring COVID-Era ACA Subsidies Drive Premium Increases
The enhanced premium tax credits originally introduced during the COVID-19 pandemic in 2021 are set to expire on January 1, 2026, after U.S. lawmakers failed to renew the subsidies. These COVID-era enhancements made health insurance more affordable for many Americans purchasing coverage through the ACA marketplace.
According to the nonpartisan Kaiser Family Foundation (KFF), the average annual premium for ACA marketplace plans is expected to more than double—from $888 in 2025 to $1,904 in 2026—once the enhanced tax credits expire.
Michigan is among the hardest hit states. Approximately 484,000 residents have benefited from these subsidies, per data from the U.S. Joint Economic Committee. Without the tax credits, an estimated 137,700 Michiganders are projected to lose their ACA coverage. In addition, nearly 260,000 more Michiganders could lose Medicaid coverage due to federal spending cuts tied to President Donald Trump’s “One Big Beautiful Bill Act.”
Who Does the ACA Marketplace Serve?
The ACA marketplace is designed to provide health insurance options for individuals who do not have access to employer-sponsored insurance or other public insurance programs such as Medicare or Medicaid. Subsidies are available for those earning less than 400% of the federal poverty level, which translates to about $60,240 for a single individual in 2025. Larger families face higher income thresholds.
The enhanced premium tax credits removed these income limits temporarily during the pandemic, enabling more people to afford health insurance regardless of their earnings.
Impact on Michiganders’ Coverage Decisions
With premiums poised to more than double in 2026, many consumers face difficult decisions. A recent KFF survey indicated that about 25% of respondents said they are very likely to go without health insurance next year rather than pay significantly higher premiums.
Political Stalemate and Negotiations
Democrats in Congress pushed to extend the subsidies, but persistent disagreements led to the federal government shutdown from October 1 to November 12, 2025, largely over this issue. Most Republicans opposed extending the program, citing concerns about fraud and costs.
Although some Democrats agreed to reopen the government without a subsidy extension, they secured a commitment that the Senate would later vote on legislation to prolong the enhanced credits. However, the Senate vote on two bills—including one proposing a three-year extension—failed on December 11. Looking ahead, Congress could still enact an extension early in 2026. On December 17, four House Republicans, though none from Michigan, broke ranks with their party to force a House vote on extending the subsidies in January. This defied House Speaker Mike Johnson’s refusal to schedule such a vote. Even if the extension passes the House, it would likely face challenges in the Senate.
Also, on December 17, House Republicans passed a separate health care bill. While it does not address the expiring ACA subsidies, the legislation aims to expand insurance options, restore funding for cost-sharing reductions (subsidies to help certain ACA enrollees with out-of-pocket expenses), and increase transparency around prescription drug pricing.
Concerns and Next Steps
Some Republican lawmakers vulnerable in upcoming elections have expressed concern over the premium spikes that will hit their constituents. President Donald Trump has openly opposed extending the subsidies, favoring instead direct payments to individuals to cover costs, though no concrete plan has been presented.
In the meantime, Trump announced plans to convene insurance companies shortly after Christmas to negotiate premium reductions for the approximately 20 million Americans facing higher costs in 2026. Senators remain engaged in bipartisan discussions to forge a compromise health care bill that could address these issues.
Important Deadlines and Resources
Open enrollment for coverage in 2026 ends on January 15. Michiganders seeking information or coverage options are encouraged to visit HealthCare.gov.
Background: The Affordable Care Act, also known as Obamacare, was signed into law by former President Barack Obama in March 2010. It established the ACA marketplace and premium tax credits to make health insurance more accessible and affordable.
For more coverage on health and policy impacts in Michigan, follow Justin P. Hicks at MLive.com.
Contact: Justin P. Hicks | [email protected]