In July, major federal legislation known as the “One Big Beautiful Bill Act” (OBBBA) was enacted to extend significant portions of the 2017 Tax Cuts and Jobs Act. Congress paired these tax cuts with reductions in other federal spending to allow the bill to be passed without the possibility of a filibuster. A major source of these reductions came in the form of changes to Medicaid, which the Research Council covered in detail.

As we outlined, the cuts to Medicaid spending will have a large impact on Michigan for individuals who currently receive health care coverage through Medicaid, the health care system at large, and the state budget. However, Medicaid is not the only aspect of health insurance impacted by recent federal action (and inaction). Changes to the Affordable Care Act’s (ACA) private marketplaces are also likely to lead to fewer people with health insurance and higher premiums for those covered by insurance. 

IN A NUTSHELL

 — Recent federal action and inaction are likely to lead to higher out-of-pocket premiums for people who obtain health insurance through the private Affordable Care Act marketplaces. 

 — Higher premiums on policies available in the marketplaces are likely to result in people opting out of obtaining coverage, which will not only impact those individuals but will also likely have negative consequences for those who have private health insurance, the health care system, and the state.

 — Michigan has limited options to respond to the federal changes, especially given the tight budget environment, but should be evaluating what can be done to limit the potential impact.