President Donald Trump has announced a plan to send $500 “refunds” beginning in October to nearly 1 million people enrolled in health insurance through the Affordable Care Act marketplace.
The White House claims that ACA enrollees in 30 states were overcharged under the previous administration, resulting in a surplus that can be returned.
The refund plan was first reported by Axios on Sept. 9, the same day Trump separately promised in a convention speech to send $5,000 dividend checks to “every adult” if Republicans retain control of the House and Senate in the upcoming midterm elections. Democrats immediately criticized both plans to send checks, accusing the White House of trying to buy votes.
That’s not how the White House describes its “Obamacare refunds.” The administration says the checks are possible because of a surplus of user fees, which are collected in states that use the federal health insurance marketplace and Healthcare.gov.
“Today’s actions directly refund the Americans most exposed to the higher costs imposed by the Biden Administration’s gross mismanagement of Obamacare,” the White House announcement said, adding that the fees collected from insurers were “far in excess of what was needed to run the exchange.”
In a video message posted on social media, Trump suggested the refunds will be automatically mailed to eligible recipients’ home addresses. He said the $500 checks will provide relief for Obamacare customers who paid higher health care premiums this year after Congress did not extend enhanced tax credits last year. Those federal subsidies lowered health insurance costs for millions of Affordable Care Act enrollees from 2021 to 2025.
About 23 million Americans selected marketplace coverage this year — in many cases, because they do not have health insurance through an employer.
Who is eligible for Obamacare refunds?
Though a lot of details are unclear, including whether the payments must be approved by Congress, the White House said refunds will be sent to nearly 1 million people in a list of 30 states who are insured under the Affordable Care Act and do not receive premium assistance.
Individuals with incomes over about $63,000 are typically ineligible for premium assistance, as the threshold is 400% of the poverty line, potentially making them eligible for $500 checks.
That means Trump’s $500 refunds will be sent to people who paid higher premiums — without subsidies — when insurance passed along “excess” fees. However, critics of the plan say it also means the refunds are going to higher earners within the ACA’s customer base, while most households receiving subsidies will get nothing.
The full list of states that rely on the federal exchange and use Healthcare.gov is: Alabama, Alaska, Arizona, Arkansas, Delaware, Florida, Hawaii, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, Wisconsin and Wyoming.
Places that run their own marketplaces, meaning residents are ineligible for these refunds, include: California, Colorado, Connecticut, Georgia, Idaho, Illinois, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Vermont, Virginia, Washington and Washington, D.C.
