Michigan’s insurers have raised individual marketplace rates more than 20% on average for 2026
Many factors contribute to the rise — market consolidation, expiring government subsidies, drug prices, inflation and hospital costs
Marketplace plans must be selected by Dec. 15 for coverage to begin in January
Michael Steinberg is “petrified” about finding coverage on the individual Affordable Care Act marketplace, where Michigan’s insurers have raised rates more than 20% on average for 2026.
The 62-year-old criminal defense attorney lives in West Bloomfield and needs insurance to cover medication for diabetes and high blood pressure and related doctor visits.
“For me to have an individual health care plan, it’s like over $1,300 a month,” Steinberg told Bridge Michigan, explaining that he has a $4,000 annual deductible for pharmaceuticals and a $7,500 deductible for medical expenses. “It’s egregious.”
Ahead of open enrollment, which started Saturday, Steinberg, along with several Michigan residents, expressed outrage over the planned health insurance rate hikes, drafting letters to the state to voice their concerns.
One woman from Grand Rapids said she’s resorted to donating plasma for money to keep up with payments, all while holding down a full-time job as a state employee. Several people stated their monthly premiums have surpassed what they pay on their home mortgages.
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The comments represent the frustrations of a system millions contend with each year.
Michigan residents will need to sign on to new HealthCare.gov plans during open enrollment before Dec. 15 if they want their insurance to take effect at the start of the new year. Others face higher costs for employer-provided and Medicare plans.
Policy analysts and health care stakeholders offer a variety of reasons for the trend — from increasing costs for drugs and hospital care to acts of Congress:
Providers leaving the state
The number of Michigan health insurance providers offering plans that individuals can purchase has dropped steeply.
The state had 41 health insurers offering individual plans in 2011, according to the Government Accountability Office. That number fell to 12 by 2022.
That year, Michigan’s top three health insurers — Blue Cross Blue Shield, Priority Health and Meridian — held 88% of the individual group market share, according to the congressional budgeting office. Large insurers control an even bigger share of employer-provided plans.
While state insurance regulators say the state has historically had a “robust market,” providers are continuing to drop coverage.
“For plan year 2026, Michigan will have 10 issuers in the individual market in 2026, down from 12 in 2025,” Chelsea Lewis, spokesperson for the Michigan Department of Insurance and Financial Services, told Bridge Michigan in an email. “On the Marketplace, Healthcare.gov, Michigan will have 7 issuers, down from 10 in 2025.”
Among the large insurers to remove plans from the ACA exchange next year is Health Alliance Plan (HAP). The company’s president, Margaret Anderson, cited capacity issues among other reasons.
“We would not have the financial resources to keep all of our other lines of business afloat had we decided to stay in the marketplace,” Anderson told Bridge, projecting “significant losses” for next year based on “uncertainties and the increasing cost of marketplace claims, both on a pharmacy and a medical perspective.”
HAP has about 490,000 members today, offering individual plans off-exchange along with commercial and Medicare Advantage coverage.
Congressional analysts say reducing the number of available plans causes premiums to rise, which in turn, “may result in decreased consumer access to affordable health insurance.”
“Although some studies find that concentration can result in reduced costs for issuers … and lower prices paid by issuers to providers for medical care, these savings may not be passed on to consumers as lower premiums,” GAO health care director John Dicken wrote in a 2024 analysis of national private health insurances.
Expiring tax credits
One of the biggest reasons premiums are going up is that insurers are preparing for the end of an enhanced premium tax credit program for health insurance plans bought through HealthCare.gov.
The future of these tax credits lies at the heart of the government shutdown, as lawmakers debate extending the subsidies further. 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.
“Congress’s failure to extend the enhanced advanced premium tax credits also contributed to higher rates, as fewer young and/or healthy people are expected to sign up for insurance, which adversely impacts the risk pool,” Lewis said.
Policy analysts estimate 484,000 state residents use the health care subsidy and its expiration may drive people to drop coverage.
“Without the renewal, families will see their monthly premiums skyrocket by more than $400 a month, with some people facing much higher increases,” Monique Stanton, president and CEO of the Michigan League for Public Policy, said during a news conference Tuesday supporting the tax credits.
Stanton said without coverage, patients are more likely to seek medical care at emergency departments, which would raise costs for the overall health care system.
Rising inflation
“Maintaining a facility or purchasing or leasing a space has often gone up in price,” Phillip Bergquist, CEO of the Michigan Primary Care Association, which represents a network of community health clinics across the state, said at the news conference.
The last five years have seen a steep increase in the price of supplies and facility maintenance, Bergquist said, and the “wage competition” for licensed providers and other workers is also on the rise.
“The biggest cost in providing health care is the people who provide the care,” he said.
Bergquist estimates over 22,000 community health center patients will lose coverage statewide as a result of the increase in insurance rates, representing an $18 million reimbursement loss for the clinics providing care.
Hospital costs
Physicians like Dr. Todd Otten of Dimondale partially blame the “out of control” costs on high administrative costs, reflecting an industry where the growth of health care managers has significantly outpaced jobs for doctors.
“There’s a complete disconnect with where the money is going and the outcomes,” Otten said at Tuesday’s public policy news conference.
Insurance executives have blamed ballooning hospital costs for driving premiums up.
According to the Michigan Health Purchasers Coalition, a nonprofit organization to lower costs to employer-sponsored health care plans, 47 cents on the dollar of commercial health plan premiums is spent on hospital services in Michigan.
Bret Jackson, who manages the coalition, is president and CEO of a group of employers and labor union health care advocates known as the Economic Alliance of Michigan. He blames hospital consolidation as the “number one reason” for rising prices.
“This happens everywhere around the country,” Jackson said. “Big, corporate health systems take over and buy more hospitals and buy more doctors and buy more clinics … the prices just inevitably go up because they now have more market power, and they can now demand and get people to pay higher prices for services.”
Michigan’s hospital leaders acknowledge the reality of mergers and acquisitions in the state, but argue that some smaller communities benefit.
“The cost of electronic medical record infrastructure is extraordinary today. The cost of medical liability insurance coverage, the cost of physician practice subsidization,” Brian Peters, CEO of the Michigan Health & Hospital Association, told Bridge. “You’re better able to bear that underlying cost if you’re part of a larger system that has more capital resources.
Peters, who says he’s been lobbying the state’s congressional delegates to extend the enhanced premium tax credits subsidy, worries that “uncompensated care” will force hospitals to lose money.
He said the rise of premiums can be owed to a couple factors outside of congressional gridlock, including the “explosive growth” in drug costs and health care supplies, made worse by federal tariff policy.
Drug prices
Many point to increased post-COVID medical check-ups, increased use of innovative gene therapies and GLP-1 weight loss drugs and pharmaceutical prices outpacing inflation as contributing factors to rising costs.
“As we’re evolving these new therapies and these new advancements, we’re seeing these cost pressures coming in,” HAP’s Anderson said. “Part of insurance is pricing for the risk.”
Dr. Mark Fendrick, who directs the Center for Value-Based Insurance Design at the University of Michigan, said shifting pharmaceutical prices are impacting decisions during Medicare open enrollment, which ends Dec. 7.
“People who have long loved traditional Medicare are moving to Medicare Advantage because they don’t like the fact that their premiums for their drug coverage have gone up,” he said.
Despite consumer sentiment being overly focused on premium price, Fendrick says the monthly expenditure only represents a component of the full financial picture consumers must consider when selecting a plan from Medicare, the individual market or any other private insurer.
“Americans don’t care about health care costs. They care about what it costs them,” Fendrick said. “Premiums are only part of the story.”
Fendrick advises consumers to shop around their plans to check out deductibles and copayments, rather than defaulting on renewing their current coverage, saying they should closely analyze their out-of-pocket exposure before making a decision.
Editor’s note: This story was updated on Thursday, Nov. 6, 2025, to correct the date by which people must enroll in ACA marketplace plans so that coverage can begin in January.
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