Michigan's tax on health insurance would continue into 2020 under legislation approved by the state Legislature.
The Republican-controlled Senate and House voted Wednesday to extend the health insurance claims assessment, which helps pay for Medicaid for low-income residents.
The tax goes away in two years if the bill isn't enacted.
The Michigan Chamber of Commerce has called it a "giant tax hike," but Gov. Rick Snyder is expected to sign the legislation.
If the tax isn't extended, Medicaid spending could be cut starting in 2017-18 unless another source of funding is used.
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.