This story was originally published by Bridge Michigan, a nonprofit and nonpartisan news organization. To get regular coverage from Bridge Michigan, sign up for a free Bridge Michigan newsletter here.
Health care subsidies are one of the primary disputes at the center of the federal government shutdown now stretching into its 8th day.
An estimated 750,000 federal workers have been placed on unpaid leave as Congress waffles on a temporary spending plan, and whether it will include an extension of an “enhanced” insurance premium tax credit benefiting millions of Americans.
Democrats want assurances that the credits will be extended into the new year and that Medicaid cuts previously approved by President Donald Trump will be reversed. Republicans want to end the shutdown first, holding off on any health care policy negotiation until after a funding bill is approved.
In Michigan, more than 500,000 residents rely on the health insurance marketplace to secure coverage for medical expenses.
Here’s what you need to know about the shutdown debate and how it affects Michigan residents:
What are ACA premium tax credits?
In short, they are discounts applied to health insurance plans bought through the federal government.
Premium tax credits were created under the Affordable Care Act (ACA) in 2010 under President Barack Obama. The ACA is known informally as Obamacare.
The federal subsidy provides discounted health insurance payments for low-income individuals and families who do not qualify for other public assistance programs like Medicare or Medicaid.
The tax credit is applied either directly to plans bought through the Health Insurance Marketplace (HealthCare.gov), or as a credit when filing tax returns at the end of the year.
What are enhanced premium tax credits?
A more expansive, and time-sensitive, tax credit tacked onto the ACA that dates back to the COVID-19 pandemic.
ACA was temporarily expanded under President Joe Biden in 2021 through the American Rescue Plan Act as part of his administration’s response to the COVID emergency.
As a result of the legislation, the Obama-era premium tax credits were “enhanced” — the subsidy could be applied to a broader group of people and enrollees would have to pay less of their income toward their plans.
Biden’s expansion removed the maximum income limit for households to qualify for the credit, which was previously set at 400% of the federal poverty line, and paused annual adjustments on calculations used to determine premium payments.
Put another way, the federal government increased its payments into the program, allowing more financial assistance to flow to enrolled families, with federal officials estimating the premium tax credits cost $129 billion in the 2025 fiscal year.
Importantly, the enhanced premium tax credits came with an end date, which was extended in subsequent legislation — Jan. 1, 2026.
Analysts with the Congressional Budget Office (CBO) say if the enhanced premium tax credit is extended past that date, it will add $350 billion to the deficit and allow 3.9 million more Americans to be insured by 2035.
What happens if the enhanced premium tax credits expire?
Significant loss of coverage for millions of Americans due to rising costs.
The CBO estimates gross benchmark premiums will rise by 4.3% on average in 2026 and 7.7% in 2027. According to the analysis, about 4 million people will lose insurance by 2034.
Policy analysts with the health policy research group KFF note that the introduction of the enhanced premium tax credit doubled the number of individuals who received a Marketplace insurance plan, with more 24 million enrollees reported in 2025, with 92% of Marketplace enrollees receiving the tax credit.
Compounded by rising health costs and the Trump administration’s changes to calculating tax credits, KFF says premium payments will more than double in 2026 for enrollees if the enhanced subsidy is not extended.
How many people in Michigan get their health insurance from HealthCare.gov?
More than 531,000 Michiganders receive a plan through the Health Insurance Marketplace, according to the Centers for Medicare & Medicaid Services. The vast majority, about 484,000, also benefit from the premium tax credit.
The number of Michigan enrollees on Marketplace plans has more than doubled since 2020, according to a KFF analysis, with a growing share receiving the tax credits in recent years.
What happens in Michigan if the premium tax credits expire?
According to the Michigan League for Public Policy (MLPP), the effect will be “devastating.”
“These credits are the reason record numbers of Americans have health insurance today,” said MLPP president and CEO Monique Stanton wrote in a recent commentary. “Without them, premiums could increase by thousands of dollars for Michigan families who are already struggling to make ends meet due to rising costs for groceries, rent, and prescription drugs.”
Should the tax credit expire, the group expects big increases in premiums next year, due in part to the forthcoming cuts outlined in the One Big Beautiful Bill Act.
The Michigan Department of Insurance and Financial Services has received requests from insurance providers requesting an average rate increase of 17% on the individual market next year.
The state’s leading insurance provider on the individual market, Meridian Health Plan of Michigan, covers about 156,000 enrollees and is seeking a 16.9% rate increase. Priority Health, which leads the state in offering the most Marketplace plans, is seeking a 14.4% increase for its 49 plans.
What are Michigan’s elected representatives saying?
Michigan’s Republican congressional delegation is urging the state’s Democratic US senators, Elissa Slotkin and Gary Peters, to pass the GOP-backed funding bill to stop the ongoing government shutdown.
About 56,000 federal workers in Michigan are furloughed, according to a letter co-signed by the seven representatives.
US Rep. Lisa McClain, one of the Republican signatories, said the shutdown represents a “funding fight,” blaming Democrats for placing an expiration date on the enhanced premium tax credits in their previous legislation.
“We need to continue to root out waste, fraud and abuse, and make sure that our health care system works for the people who need it most, and keep the premiums affordable,” said McClain. “In order to do that, we must open the government and then we will be happy to have those discussions and negotiations and debate.”
Democrats are unlikely to budge without a plan in place.
On the eve of the shutdown, Peters urged more action to “ensure families can continue to afford their health care.”
“No one wants a government shutdown, but health care premiums are estimated to double, and this Administration has already shown they don’t care if costs go up for hardworking families,” he said in a statement at the time. “I stand ready to work with my colleagues on both sides of the aisle to reach a bipartisan deal that prevents health care costs from rising even more and meets the needs of all of our communities.”
Slotkin is calling on state residents to share their stories about rising health care costs, saying in a video that the country is “on the verge of a health care crisis” because of the One Big Beautiful Bill Act.
Bridge Michigan reporter Lauren Gibbons contributed to this report.
