Michigan Senate Health Policy Committee Takes Testimony On IRA PPACA Tax Credits

The Michigan State Senate's Health Policy Committee took testimony Wednesday on the federal tax credits temporarily boosted ("enhanced") by the Inflation Reduction Act (IRA) for COVID, and then allowed to return to pre-COVID PPACA levels by OBBBA.  It is quite unusual for a State of Michigan legislative committee to conduct hearings on federal policy, but these are unusual times.

Senate Health Policy being a Democrat run committee, they don't make it clear that the IRA was written by Democrats (against total Republican opposition) with the Democrat written enhanced tax cut expiration at the end of 2025, and the Republicans are now just enforcing the IRA's mandates.

The credits have become a hot political issue because of the staggering growth of PPACA plan health care premiums.  They will increase about 18% next year, nationwide.  Michigan PPACA plan holders will see increases at about the nationwide average.  PPACA was supposed to reduce health care costs, but these costs have instead exploded since enactment as the health care community has learned to game the PPACA systems.  Democrats now want to preserve the fiction of the PPACA controlling costs by ever larger health care premium subsidies, but the Republicans are concerned about $ 2 trillion federal deficits and their effect upon inflation.

This is the basis of the Democrat's spurious claims that the Republicans are cutting health care and the single largest bone of contention in the ongoing federal shutdown.

This generally informative story from Michigan Advance identifies Dr. Farhan Bhatti by the anodyne title of "Michigan’s lead for the Committee to Protect Health Care".  He is actually a major contributor to Michigan Democratic Party candidates and one of their health policy wonks:

https://michiganadvance.com/2025/10/23/michigan-senate-panel-examines-health-care-access-woes-with-loss-of-aca-enhanced-credits/

Michigan Senate panel examines health care access woes with loss of ACA enhanced credits
By Ben Solis - October 23, 2025

The consequences of Congressional Republicans’ decision to let important Affordable Care Act tax credits expire on Jan. 1, 2026, will be dire for those seeking access to vital federal marketplace insurance plans and health care, advocates told a Michigan Senate panel on Wednesday.

Members of the Senate Health Policy Committee parsed the issue and sought to better understand how average Michiganders would be affected by the move.

The panel, and Michigan Democrats across the board, have been warning that nearly 500,000 Michiganders who have benefited from the act’s enhanced premium tax credits will be hit with a spike in insurance costs now that the Republicans in Washington have opted to let those credits expire at the turn of the year.

Some might see their health care costs double or triple, Democrats have argued, resulting in delayed or ignored health care assessments or procedures, or exorbitant debt if the procedures are most necessary.

That could also lead to premium increases for all users of the federal marketplace.

“For several years now, we have seen the enhanced premium tax credit open the door to more folks being insured and having access to health care. This has not only led to better health outcomes for these individuals, but has helped to grow the insurance pool and lower costs for everyone,” Sen. Kevin Hertel (D-St. Clair Shores), the committee’s chair, said. “The deliberate decision to not extend these critical tax credits is reckless, shortsighted, and will result in irreparable harm to families throughout our state. It’s time for leaders in Washington to put partisan politics aside and get this done for the American people.”

Hertel has also sponsored a Senate resolution calling on Congress and President Donald Trump to restore and permanently extend the enhanced tax credit, in addition to holding Wednesday’s hearing.

Those giving testimony on Wednesday echoed the same sentiment: by terminating the credits, those enrolled in the ACA marketplace and beyond will face insurance price hikes.

“Enhanced premium tax credits have been among the most effective tools we’ve had in reducing the number of uninsured Michiganders and making health care more affordable for working families,” Rachel Richards, fiscal policy and government relations director for the Michigan League for Public Policy, said. “Letting these credits expire would devastate hundreds of thousands of people who are already struggling with rising costs for everything from groceries to housing.”

Dominick Pallone, executive director of the Michigan Association of Health Plans, said rising health care premiums, increasing prescription drug costs and high cost claims will leave both employers and consumers facing “sticker shock” when it comes time to pay health care bills.

“Enhanced premium tax credits help hundreds of thousands of Michiganders afford health insurance,” Pallone said. “There is still time for Congress to act and extend these tax credits to help make health care more affordable, and we look forward to continuing to partner with state policymakers on efforts to address the root causes of these historic premium increases.”

Dr. Farhan Bhatti, Michigan’s lead for the Committee to Protect Health Care and a family physician in Lansing, said that too many patients are already struggling to get by while costs for health care also rise.

“Physicians know too well that when patients aren’t able to afford health care, they often simply go without,” Bhatti said. “Their health conditions become worse, unnecessarily, and more difficult and expensive to treat. People are forced to seek care in the hospital, raising uncompensated care costs and raising premiums for everyone. Allowing the ACA enhanced premium tax credits to expire will cause harm to the health and financial security of patients like mine and all Michiganders.”

The conversation before the Senate panel is set against the backdrop of the ongoing federal government shutdown fight in Washington, where the ACA credit extension is a major sticking point.

A new poll released by progressive policy advocates Progress Michigan shows that a majority of Michiganders support Democratic lawmakers standing firm in negotiations to ensure that the subsidies and the credits remain in place – even if it means a continuation of the temporary shutdown.

According to the group’s latest Lake Effect poll, conducted between Oct. 16-17 with interviews from 679 residents, 54% said they supported Congress holding out on passing a budget until the subsidies are extended.

“This is about more than numbers on a spreadsheet. It’s about real people being able to afford doctor visits, prescriptions, and vital care,” said Denzel McCampbell, Progress Michigan managing director. “Michiganders are calling on Congress to prioritize affordable health care, not cave to a dangerous MAGA President and his cronies who care more about building a ballroom at the White House than the ability for Americans to afford life-saving care.”