Updates About Budget

According to a statement released by Michigan Department of Health and Human Services (MDHHS) Director, Elizabeth Hertel, the meager budget passed by House Republicans would have dire consequences on Michigan residents. Hertel highlighted that the budget’s $4.95 billion reduction in MDHHS funding would lead to significant staff reductions impacting child protective services workers, benefits specialists, disease specialists, and fraud, waste, and abuse investigators.

The director also reported that the budget cuts would curb certain service programs such as removing $20 million in adult dental coverage, $10 million to hospitals for maternal health care, $7 million for the Office of Community Violence and their gun violence reduction efforts, $6.8 million to state psychiatric hospitals, and $4 million toward addressing homelessness.

Hertel stressed that the eliminated funding would negatively impact behavioral health services by increasing wait times and decreasing the state’s patient capacity capabilities. The cuts would also erase Medicaid coverage for approximately 33% of residents in rural communities, placing an extra burden on local hospitals and resources posed with absorbing the costs of their care.

According to the Citizens Research Council (CRC), approximately 530,000 Michiganders are set to see higher healthcare costs due to the expiration of federal tax credits for health insurance purchased through Patient Protection or the Affordable Care Act (ACA). Congress failed to extend these tax credits when passing the One Big Beautiful Bill Act. Currently, around 350,000 Michigan residents are covered by tax credit supported plans supported by the federal government. After the credits expire, estimates point to a 70% increase in premiums on the marketplace. Additionally, 200,000 Michiganders are set to lose insurance coverage under the ACA.

The CRC warns that these coverage losses could create ripple effects across the state. Residents who forgo coverage will face greater financial and health challenges, while the departure of healthy enrollees from the marketplace will drive up costs for those who remain. Even employer-sponsored plans could see higher premiums as the marketplace shifts. Many will wait to seek healthcare until it requires a visit to the emergency department. However, those delaying care are mostly likely to be unable to afford its cost, thereby causing uncompensated care costs to rise.

The CRC cautioned that the state will have to grapple with the impacts of fewer people having health insurance, higher premiums, and increasing uncompensated care for hospitals. CRC suggested a state tax credit or healthcare incentives, but any move would require more state spending. Given the tight budget climate, lawmakers may resist, but inaction could result in daunting consequences for Michigan residents.

Governor Gretchen Whitmer delivered a major address on Michigan’s economy last week, underscoring the vital role that middle class jobs have played in the state’s success. She pointed to recent progress that includes adding or retaining nearly 1,000 jobs across multiple municipalities that led to a $200 million boost to the state economy. Whitmer also spoke on securing a fighter mission for Selfridge Air National Guard Base protecting 30,000 jobs and nearly a billion dollars in statewide commerce. She outlined long term investment projects in infrastructure, childcare, housing, and education made possible through bipartisan cooperation, noting that more than 1,500 bipartisan bills have been signed to support working families and strengthen communities.

The governor also raised concerns about what she called a “man-made storm of uncertainty” caused by chaotic national tariff policies and delays in finalizing a state budget. Consequences of this storm include rising prices on groceries and household goods for families, while steep costs, outsourcing, and lower sales threaten Michigan farmers and automakers. Without action, she warned, progress on roads, schools, and public safety could be rolled back, putting thousands of good-paying jobs at risk. Whitmer closed her speech by reminding lawmakers of the value in working across the aisle to sign a balanced budget. What should this compromise look like? According to the governor, a signable budget covers Senate priorities to protect Medicaid, feed kids at school, and support moms and babies and also includes House priorities like cutting spending, fixing local roads, and increasing transparency.