LANSING, Mich. (June 26, 2024) — Today, the Michigan Senate passed Senate Bills 633–638, sponsored by Sens. Kevin Hertel (D-St. Clair Shores), Sylvia Santana (D-Detroit), Erika Geiss (D-Taylor), Darrin Camilleri (D-Trenton), and Veronica Klinefelt (D-Eastpointe). This legislation would transition Michigan away from the federally managed health insurance marketplace to a State-Based Exchange (SBE), helping to provide the state with greater flexibility to meet the health care needs of Michiganders.
“Here in Michigan, we have a strong track record of safeguarding residents’ healthcare,” said Sen. Hertel, Chair of the Senate Health Policy Committee and lead sponsor of the package. “Shifting our healthcare exchange from the federal platform to a state-based one is the logical next step towards lowering costs for residents and building a more accessible, equitable and affordable healthcare system that works for all Michiganders. Under this plan, we will have more tools at our disposal to tailor the marketplace to fit local healthcare needs while reducing costs, improving efficiency, and boosting access to care.”
Taking effect in 2010, the federal Affordable Care Act (ACA) created a health insurance marketplace where Americans could compare plans and choose an option that works best for them and their family — often with subsidies to reduce the cost. The ACA allowed states to determine on an individual basis whether to use the federal Healthcare.gov platform or manage their own SBE run by their state government.
In the past decade, the ACA has grown in popularity across the country and here in Michigan. During the 2024 open enrollment period, for example, 418,000 Michiganders purchased coverage through the federal marketplace, which was a 30% increase from the previous year and the highest enrollment rate in the state’s history. Additionally, the number of states choosing to operate their own exchange has increased in recent years due to the benefits it provides and the improvements made to information technology systems. Currently, eighteen states run their own SBE, six of which have been established in the last four years, including Pennsylvania and Nevada.
“Establishing a state-based exchange is a vital step forward in our mission to make healthcare more accessible and affordable for every Michigander,” said Sen. Santana, Majority Vice Chair of the Senate Health Policy Committee. “By keeping the funds within our state, we can reinvest in our communities, improve public health outreach, and ensure that everyone has the opportunity to receive quality healthcare, regardless of their zip code or income level.”
More specifically, this six-bill package amends Michigan’s insurance code to establish an SBE and lays out the parameters and duties of the exchange and governing board. As a result, the state would provide the infrastructure, website and support for individuals and small businesses to purchase plans beginning January 1, 2026.
“Establishing a state-based health exchange in Michigan is a significant step towards expanding access to healthcare, reducing barriers, and ensuring that individuals have access to quality health and dental coverage,” said Sen. Geiss. “The certification of these plans will help improve health outcomes by providing tailored, localized options for residents leading to better coverage that meets the needs of the community while promoting equity and inclusivity in healthcare services.”
Currently, the Centers for Medicare and Medicaid Services (CMS) imposes a user fee on insurers collecting a percentage of the premiums from plans sold through Healthcare.gov, to sustain operational and administrative costs associated with running the federal marketplace. Transitioning to an SBE would allow the revenue generated by the exchange to stay in Michigan rather than be returned to the federal government. As a result, the state would have the flexibility, affordability, and autonomy to take a more tailored approach to best meet the healthcare needs of all Michiganders — bolstering efforts to reach underserved communities, lower uninsured rates, save on administrative costs, and more.
“Moving to a state-based exchange is about taking control of our healthcare future,” said Sen. Camilleri. “This transition will empower us to design a more efficient and accessible healthcare system that prioritizes the needs of Michiganders. It’s a critical move to ensure that everyone from our urban centers to our rural areas has access to the coverage and care they need.”
“Transitioning to a state-based health exchange presents a host of important opportunities,” said Sen. Klinefelt. “Most importantly, the autonomy this legislation grants us will allow us to take a custom approach to reach uninsured residents in every corner of our state and help them access the care they need and deserve. Through our ability to implement more targeted, data-informed outreach, we can build a healthier, stronger Michigan for all.”
This legislation now heads to the Michigan House for their consideration.