Michigan's tax on health insurance will continue under legislation signed by Gov. Rick Snyder.
The bill enacted Tuesday extends the health insurance claims assessment, which helps pay for Medicaid for low-income residents, until July 2020.
The tax would have gone away in two years if the legislation were not adopted.
The 0.75 percent tax is expected to rise to 1 percent in 2017 when the federal government no longer allows another tax to fund Medicaid.
Critics such as the Michigan Chamber of Commerce call the bill a tax increase.
But the Republican governor has advocated for the measure partly as a way to lessen pressures in the state's general fund when more money is shifted to road construction in coming years.