LANSING, Mich. (Oct. 22, 2025) — As the country quickly approaches the expiration of the Affordable Care Act (ACA) Enhanced Premium Tax Credit on Jan. 1, 2026, Washington Republicans refuse to extend this critical tool that has made health care more affordable and accessible for Americans. To investigate the consequences this deliberate elimination will have on the state of Michigan, the Senate Health Policy Committee invited leading organizations in the health care sector, doctors, and individuals who receive their health insurance from the ACA Marketplace to share their expertise and firsthand experiences on the positive impact the enhanced credit has had — and the risks if it goes away.
“For several years now, we have seen the enhanced premium tax credit open the door to more folks being insured and having access to health care. This has not only led to better health outcomes for these individuals, but has helped to grow the insurance pool and lower costs for everyone,” said Committee Chair Sen. Kevin Hertel (D-St. Clair Shores), who also sponsored a Senate resolution calling on Congress and the President of the United States to restore and permanently extend the enhanced tax credit. “The deliberate decision to not extend these critical tax credits is reckless, shortsighted, and will result in irreparable harm to families throughout our state. It’s time for leaders in Washington to put partisan politics aside and get this done for the American people.”
Testimony underscored a unifying message: the termination of the enhanced premium tax credit will have profound consequences, not just for those who are enrolled in an ACA Marketplace plan, but for everyone. Health care premiums will spike, people will lose health insurance, thousands of jobs will be lost, and billions of dollars will be drained from the economy.
“Enhanced premium tax credits have been among the most effective tools we’ve had in reducing the number of uninsured Michiganders and making health care more affordable for working families,” said Rachel Richards, Fiscal Policy and Government Relations Director for the Michigan League for Public Policy. “Letting these credits expire would devastate hundreds of thousands of people who are already struggling with rising costs for everything from groceries to housing. Congress must act now to extend these enhanced tax credits and protect the health and economic stability of Michigan families, small businesses, and our broader economy.”
As the 2026 open enrollment period rapidly approaches, the nearly 500,000 Michiganders who benefit from the Affordable Care Act Enhanced Premium Tax Credit will be hit with a shocking spike in insurance costs. From child care aides and restaurant workers to small business owners and independent contractors, these individuals and their families will see their health care costs double or even triple. This will result in them being forced to delay or skip needed health care or take on burdensome medical debt. And in the larger picture, this will leave the health insurance marketplace with a smaller, sicker, less stabilized pool, leading to further premium increases for everyone.
“Rising health care premiums, attributable to increasing prescription drug costs and higher cost claims from sicker patients, coupled with the loss of consumer tax credits, will leave employers and consumers facing sticker shock this fall,” said Dominick Pallone, Executive Director of the Michigan Association of Health Plans. “Enhanced premium tax credits help hundreds of thousands of Michiganders afford health insurance. There is still time for Congress to act and extend these tax credits to help make healthcare more affordable, and we look forward to continuing to partner with state policymakers on efforts to address the root causes of these historic premium increases.”
The consequences of the enhanced premium tax credit expiring extend far beyond the health of Michiganders and their pocketbooks. Rather, if Washington Republicans fail to renew the credit, severe economic fallout is expected. This reduction in health care spending, compounded by the downstream economic effects for businesses that serve health providers and workers, will cause state economies to plummet by over $40 billion — nearly 30% more than the amount the federal government would save from not providing the enhanced tax credits. Over 339,000 jobs are also projected to be lost as a result, including 4,400 jobs here in Michigan.
“Too many patients are already struggling to get by as costs for necessities continue to rise; raising their health care premiums by hundreds or even thousands of dollars each month by letting these tax credits expire is simply untenable for most families,” said Dr. Farhan Bhatti, Michigan lead for the Committee to Protect Health Care and family physician in Lansing. “Physicians know too well that when patients aren’t able to afford health care, they often simply go without. Their health conditions become worse, unnecessarily, and more difficult and expensive to treat. People are forced to seek care in the hospital, raising uncompensated care costs and raising premiums for everyone. Allowing the ACA enhanced premium tax credits to expire will cause harm to the health and financial security of patients like mine and all Michiganders.”
This committee hearing follows a number of actions taken by Sen. Hertel and Michigan Senate Democrats to protect and expand access to health care, including their passage of legislation to codify popular provisions of the Affordable Care Act into state law, staunch advocacy against federal cuts to Medicaid, and subsequent state investment to protect $2.7 billion of core Medicaid services for Michiganders.