WASHINGTON — Senate Republicans and Democrats failed to reach a health care deal this week, leaving the fate of enhanced Affordable Care Act (ACA) premium tax credits in limbo. Without a compromise, those subsidies are set to expire Dec. 31, 2025 — a move that health policy experts warn could send health insurance costs sharply higher and push many Michiganders out of coverage as 2026 approaches.

The expiration follows another round of partisan debate in the Senate, where GOP leaders declined to extend the enhanced credits, and Democrats’ bid to secure a multiyear extension failed to earn the 60 votes needed to advance. The result is a looming “affordability cliff” for millions of Americans.

What the Subsidy Collapse Means

Enhanced premium tax credits — expanded under the American Rescue Plan and extended by subsequent legislation — have been critical in keeping marketplace premiums affordable for millions. If allowed to expire, national analyses project that average net premiums for Marketplace plans could more than double in 2026, placing harder costs on consumers.

“People are hurting right now — there’s an affordability crisis on our hands,” said a policy organizer at a recent rally demanding action from Congress. “We want them to extend health care with a clean three-year extension.

Michigan Faces Steep Premium Increases

In Michigan, the impact could be severe:

  • About 530,000 state residents currently buy health insurance on the ACA marketplace and face rising costs. Many plans are already priced for 2026 assuming lower federal support.

  • Insurers such as Blue Cross Blue Shield of Michigan and others have already announced linked rate increases of up to 20–26% for 2026 coverage year premiums — even before the subsidies officially expire.

  • Analysts estimate that if enhanced credits lapse, premiums in Michigan could rise by roughly 70% on average, adding more than $800 per year out of pocket for some enrollees.

Michigan’s marketplace already saw challenges this year, including some insurers exiting the exchange and rate hikes averaging nearly 17% — signs of stress that will worsen if federal financial help vanishes.

County-Level Coverage and Cost Impact

Insurance coverage varies across Michigan’s counties, and so will the impact of subsidy expiration:

  • Wayne County — part of Southeast Michigan where coverage gains historically reduced uninsured rates, could see some of the largest absolute numbers losing affordable options if premiums spike.

  • Bay County — with an uninsured rate around 6.7%, meaning more residents are already vulnerable without employer or Medicaid coverage.

  • Rural counties with higher uninsured rates and lower income levels may experience disproportionate risk of coverage drop-offs as costs rise — particularly in the Upper Peninsula and northern Lower Peninsula counties.

Approximately 4.5–4.9% of Michigan residents are uninsured, meaning tens of thousands already lack coverage, and more could join their ranks if coverage becomes unaffordable.

Voices from the Front Lines

Health Policy Experts:
“This is a textbook affordability cliff,” said a national health policy analyst. “Without these credits, people lose coverage quickly, delay care, and face worse health outcomes.” Analysts say premiums could rise even before 2026 takes effect, as insurers price risk into next year’s products.

Hospital Leaders:
Rural and safety-net hospitals warn that rising uninsured rates will increase uncompensated care and strain systems already managing workforce shortages. “Higher premiums without subsidies translate directly to more emergency room visits and financial pressure on providers,” one Michigan hospital administrator said.

Consumer Advocates:
“Working families aren’t going to absorb these increases,” a community organizer said. “Coverage losses here aren’t just numbers — they’re real people choosing between health care and other necessities.”

What’s Next

With Congress adjourned for the holidays, negotiations will resume in early 2026. Some lawmakers have signaled they want to revisit premium tax credits soon after the new session begins, but any delay increases the likelihood that many Michigan enrollees will already be paying higher premiums or losing coverage when the next coverage year begins.

State officials and consumer groups are urging Michiganders to review their marketplace coverage now, understand how subsidy changes may affect them, and update applications during open enrollment to lock in the best options before costs jump.

Bottom Line

The failure to extend enhanced ACA premium tax credits has transformed a federal policy stalemate into a real-world health care affordability crisis, particularly in Michigan. With premiums already rising, tens of thousands of residents could lose insurance or face sharp out-of-pocket increases in 2026 — a significant blow to families, hospitals, and communities across the state.