Employer-Provided Insurance Seeing '15, 20, 25, 35 . . . 50 Percent' Rate Hike

(Source: MIRS.news, Published 12/04/2025) Residents with employer-provided health insurance will see the "additional financial pressure" of more folks going uninsured due to federal Medicaid reforms and the looming expiration of Enhanced Premium Tax Credits, says one benefits consultant.

Thursday morning, the Michigan League for Public Policy hosted a press conference describing what could happen if Congress does not renew Enhanced Premium Tax Credits.

The subsidies are set to expire at the end of the year. They were introduced to the Affordable Care Act's (ACA's) marketplace system in 2021, given to insurers to ensure that non-Medicaid eligible households and workers were not spending too much of their income on coverage.

As part of negotiations to end the record-long government shutdown, U.S. Senate Majority Leader John Thune (R-SD), explained that next week the U.S. Senate will vote on any proposed Democratic bill, which will need 60 votes to pass. The chamber is split between 53 Republicans and 47 members who typically align with Democrats.

One of the proposals is a discharge petition extending the tax credits for three years, capping average ACA marketplace plans at 8.5 percent of a household's income.

"Small business employees, owners and self-employed workers make up nearly half of adult marketplace enrollees," said Amber Bellazaire, a senior policy analyst for the Michigan League for Public Policy.

She explained that in Michigan's 7th U.S. House district, covering the Greater Lansing area and Livingston County, 23,000 individuals have benefited from the subsidies. If not extended before the end of 2025, Bellazaire said they will see a 60 percent increase in their premium costs.

In October, the state's insurance department reported that a record 530,000 Michiganders were currently enrolled in health insurance through the ACA marketplace. At the same time, 4.89 million residents were covered by employer-sponsored insurance in 2023, worth 49.8 percent of Michigan's population.

Grant Hendrickson, a partner and corporate benefits consultant for the East Lansing-based Brogan insurance agency, said "they're all interconnected."

He said if fewer people are insured, fewer people will have reimbursements paid to care providers.

"Providers need to get paid somehow. That's going to lead to additional pricing pressure on our corporate plans," Hendrickson said.

Hendrickson said hospital systems typically have 3-year contracts where they negotiate with insurance carriers on a rotating basis. But especially in rural areas, he said discussions are already ramping up due to "the Medicaid cuts that are coming" and "the individual market that's going to see a significant reduction in enrollees."

"At the time of the next contract negotiation, you're going to see every health system in America ask for additional reimbursement, which will largely come from the corporate community, which is already seeing these 15, 20, 25, 35 . . . 50 percent rate increases for 2026," Hendrickson said.

Ahead of 2027, Congressional Republicans' One Big Beautiful Bill Act (OBBBA) requires that Medicaid beneficiaries work at least 80 hours per month – which can include educational programs, seasonal jobs and qualified community service activities – if they are not "medically frail," totally disabled veterans, pregnant, special needs or with children under 14.

OBBBA requires states to re-determine eligibility at least every six months, and it places a three-month "look-back" cap for Medicaid applicants to demonstrate they've met community engagement mandates.

Critics of OBBBA project that the new administrative burdens will result in a massive drop in covered populations.

"Many of these attacks on Medicaid and other direct service programs have been attacked and cut so deeply that we are unable as a state to backfill," said Rep. Emily Dievendorf (D-Lansing), who was part of the press conference. "We need to be fighting as state legislators for the health care that we provide as a state and that we work with the federal government to provide and emphasizing that across the board."

This week's episode of the MIRS Monday Podcast featured an interview with former state Rep. Andrew Beeler, the Port Huron Republican who served in the House from 2020 through 2024. Beeler is now running to beat term-limited Sen. Dan Lauwers (R-Brockway)' replacement in the 25th Senate district, covering the Thumb region.

MIRS asked Beeler about Democrats' anticipated plans to target Republicans on rising health care costs in the 2026 elections.

"I would say it's hard to prop up an industry as heavily subsidized as health insurance and then call it a free market, and talk about how to affect affordability using a normal free market principle . . . it's a tough one," Beeler said. "It is a highly regulated, highly subsidized industry. I think the government getting its hands off the industry in general is going to make things better."

Beeler added that, to him, the federal deficit and overspending in budgets is a national security threat.

"It's very clear that the country at the federal level can't afford these programs, 'Obamacare' and the ACA was never a financially viable program, and we know government subsidies don't work to lower costs. They actually do the opposite," he said. "It really was a Band-Aid on a problem, and so I'm much more interested in addressing the root causes of some of these problems, which I think is probably government overregulation."