Michigan families just got hit with sticker shock. Health insurance premiums are climbing fast—and the reason isn’t complicated. According to ClickOnDetroit, COVID-era tax credits that helped thousands afford coverage just expired. Now insurers are leaving the state marketplace, shrinking your options while costs keep rising.
If you’re renewing coverage or shopping for 2026, this matters. Premiums you could afford last year might be out of reach now. Understanding what changed—and what you can do about it—could save you hundreds per month.
Why Did COVID Tax Credits Matter So Much?
Back in 2021, the federal government expanded Affordable Care Act subsidies to help Americans deal with pandemic-related economic hardship. These enhanced tax credits made premiums affordable for millions of middle-income families who didn’t qualify for traditional Medicaid but couldn’t afford full-price marketplace plans.
Michigan residents benefited significantly. Families earning up to 400% of the federal poverty level (about $120,000 for a family of four) could access these credits. Some households paid as little as $50-100 monthly for coverage that would’ve cost $800+ without help.
The credits worked like this:
- Income-based sliding scale: Lower earners got bigger discounts, sometimes covering 80-90% of premium costs and reducing monthly bills to nearly nothing.
- Eliminated the subsidy cliff. Previously, earning $1 over 400% FPL meant losing all help. Enhanced credits removed that hard cutoff.
- Applied automatically during enrollment through Healthcare.gov, making the discount instant at checkout.
When Congress let these enhanced credits expire at the end of 2024, premiums snapped back to pre-pandemic pricing. For many Michigan families, that meant immediate increases of $200-500 per month depending on household income and plan selection.
Insurers Are Leaving Michigan—What That Means for You
Higher costs aren’t the only problem. Some health insurance companies are exiting Michigan’s marketplace entirely, reducing competition and shrinking your choice of plans.
Why would insurers leave? Three reasons explain the exodus:
- Lower enrollment expected: Without enhanced subsidies, fewer people can afford coverage. Smaller risk pools make it harder for insurers to spread costs and stay profitable in the state.
- Regulatory uncertainty around future subsidy programs makes long-term planning difficult for carriers operating in Michigan.
- Claims exceeding premiums. If an insurer paid out more in medical claims than it collected in premiums during 2023-2024, staying in the market becomes financially unsustainable.
When carriers exit, remaining insurers face less competition. That often leads to higher premiums since consumers have fewer alternatives. Michigan shoppers may find just 2-3 plan options in some counties, compared to 5-6 choices available two years ago.
This creates a vicious cycle: higher prices drive healthy people out of the market, leaving a sicker risk pool that costs more to cover, which pushes premiums even higher the following year.
Can You Still Afford Health Insurance in Michigan?
Yes, but it takes more work now. Here’s what Michigan residents should do immediately:
Shop during open enrollment. For 2026 coverage, open enrollment typically runs November 1 through mid-January. Missing this window means you’re stuck with 2025 rates and plans unless you qualify for a special enrollment period (job loss, marriage, birth of a child).
Compare all available plans. Don’t just renew your current coverage automatically. Insurers adjust pricing every year, and your current plan might’ve become the most expensive option. Check Healthcare.gov to see what’s available in your county.
Consider bronze plans with HSAs. If premiums feel unaffordable, high-deductible bronze plans paired with Health Savings Accounts can lower monthly costs significantly. You’ll pay more out-of-pocket before insurance kicks in, but the tax advantages of HSAs help offset those costs if you’re generally healthy.
Check for remaining subsidies. Even without enhanced credits, standard ACA subsidies still exist for households earning up to 400% FPL. Run the calculator on Healthcare.gov to see if you qualify for any assistance—even $100/month helps.
Consult a licensed insurance broker. Michigan has free enrollment counselors and licensed brokers who specialize in marketplace plans. They can explain plan differences, subsidy eligibility, and help you find the best coverage for your situation. Find one through the Michigan Department of Health and Human Services.
What Happens If You Skip Coverage?
Going without health insurance feels tempting when premiums spike. But Michigan residents should understand the risks:
Medical debt hits fast. A single emergency room visit for a broken bone can cost $5,000-10,000 without insurance. A hospital stay for pneumonia might run $20,000+. Cancer treatment or surgery? Six figures easily.
The federal tax penalty for going uninsured was eliminated in 2019, so you won’t face IRS fines. However, unpaid medical bills damage credit scores and can lead to wage garnishment or bankruptcy.
Catastrophic plans offer a middle ground. If you’re under 30 or qualify for a hardship exemption, catastrophic coverage costs less than bronze plans but covers you in worst-case scenarios. Premiums run around $200-300/month for a healthy 35-year-old, with very high deductibles ($9,000+) that kick in only after a serious medical event.
Short-term health plans are NOT a good substitute. These plans can reject you for pre-existing conditions, don’t cover essential health benefits like prescription drugs or maternity care, and won’t protect you from medical bankruptcy if something major happens.
Will Enhanced Subsidies Come Back?
Maybe. Congress extended enhanced ACA subsidies twice before (in 2021 and 2022) but let them expire after 2024. Whether they’ll return depends on federal budget negotiations and election outcomes.
What we know for now:
Advocacy groups like Families USA are pushing for permanent subsidy expansion. They argue that letting credits expire will increase the uninsured rate by millions nationwide.
Some lawmakers support reinstatement. But budget constraints and political gridlock make quick action unlikely. Michigan residents shouldn’t count on enhanced credits returning before 2026 open enrollment.
State-level assistance programs exist but are limited. Michigan doesn’t currently offer additional premium subsidies beyond federal ACA credits. However, Medicaid expansion covers adults earning up to 138% FPL (about $20,000 for an individual), providing free or low-cost coverage for lower-income residents.
The smart move? Plan your 2026 budget assuming enhanced credits won’t return. If Congress does reinstate them, that’s a bonus. But building your financial plan around subsidies that might not exist leaves you vulnerable to premium shock next fall.
Frequently Asked Questions
Why are Michigan health insurance premiums rising in 2025?
The primary cause is the expiration of COVID-era enhanced tax credits at the end of 2024. These federal subsidies helped middle-income families afford marketplace plans by reducing premiums by $200-500 monthly in many cases. Without them, premiums returned to pre-pandemic pricing. Additionally, some insurers exited Michigan’s marketplace, reducing competition and allowing remaining carriers to raise prices with fewer alternatives available to consumers.
Can I still get help paying for health insurance in Michigan?
Yes. Standard ACA subsidies remain available for households earning up to 400% of the federal poverty level (about $120,000 for a family of four). These subsidies are less generous than the enhanced COVID-era credits, but they still reduce premiums based on your income. Additionally, Michigan’s Medicaid expansion covers adults earning up to 138% FPL with free or low-cost coverage. Check your eligibility at Healthcare.gov during open enrollment.
Which health insurers left Michigan’s marketplace?
Specific carrier names weren’t disclosed in the original report, but industry trends show that smaller regional insurers typically exit first when market conditions worsen. Check Healthcare.gov during open enrollment to see which carriers still offer plans in your county. Some Michigan residents may now have only 2-3 insurer options compared to 5-6 choices in previous years.
Should I just skip health insurance if premiums are too high?
Going uninsured is extremely risky. A single emergency room visit can cost $5,000-10,000 without coverage, and hospital stays or surgeries easily reach six figures. While there’s no longer a federal tax penalty for being uninsured, medical debt destroys credit scores and can lead to wage garnishment. Consider catastrophic plans (if you’re under 30 or qualify for hardship exemptions) or bronze plans with HSAs as lower-cost alternatives that still protect you from bankruptcy-level medical bills.
When is open enrollment for 2026 health insurance in Michigan?
Open enrollment typically runs from November 1 through mid-January (usually January 15) for coverage starting January 1, 2026. Missing this window means you cannot purchase marketplace coverage unless you experience a qualifying life event like job loss, marriage, or birth of a child. Mark your calendar now and start comparing plans at Healthcare.gov as soon as enrollment opens to avoid last-minute premium shock.
Bottom Line
Michigan families face a tough reality: health insurance costs more now than it did a year ago, and options have shrunk. The expiration of enhanced federal tax credits removed critical financial support that made coverage affordable for middle-income households.
But going without insurance isn’t the answer. Medical debt can devastate your finances faster than high premiums. Your best strategy? Shop early during open enrollment, compare every available plan, and consult with a licensed broker who knows Michigan’s marketplace inside and out.
Premium sticker shock hurts. Medical bankruptcy hurts worse.