The Trump administration said on Thursday it planned to issue $500 in rebates to nearly one million people insured under the Affordable Care Act, describing the money as payments for “overcharges” by the previous administration.
A fact sheet posted to the White House website indicated the checks were aimed at Americans who it claimed were “most exposed” to higher Obamacare costs during the Biden administration. People in 30 states who signed up for Obamacare insurance on heathcare.gov and did not receive a federal subsidy would be eligible, the fact sheet said. The checks are scheduled to be sent next month, just weeks before the midterm elections.
So far, the administration has not released an executive order or regulation establishing the rebate program outlined in the fact sheet.
The checks would target consumers who faced significant price increases this year, after the Republican-controlled Congress did not extend more generous subsidies, or tax credits, that were approved during the coronavirus pandemic.
Many farmers, ranchers, entrepreneurs and early retirees, people who earn more than around $65,000 a year and do not get health coverage from their jobs, could receive the money.
President Trump and congressional Republicans have faced criticism from Democrats over the rising costs of health care, part of a broader critique that the administration’s policies have made everyday life less affordable.
The president is fond of sending direct payments to American voters. In his first administration, the government sent checks to taxpayers as a form of relief during the Covid pandemic. Just before the 2020 election, he proposed sending $200 vouchers to Medicare beneficiaries to lower their drug costs, a plan that was abandoned.
In a speech on Wednesday, he proposed mailing $5,000 to American households next year if Republicans retain their Congressional majorities. But he did not mention the Obamacare rebate. The plan was reported earlier by Axios.
The typical cost of health insurance for the population eligible for the checks increased by thousands of dollars this year, a shift that priced some out of insurance altogether and forced others to buy less generous coverage with much higher out-of-pocket costs.
The $500 rebate will make a small dent in that price increase. The checks will not go to customers in every state. Consumers in California, Colorado, Connecticut, Washington, D.C., Georgia, Idaho, Illinois, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, Vermont, Virginia and Washington will get no money.
The expiration of the extra subsidies also increased insurance costs for people with lower incomes who buy their own insurance. They will not benefit from this policy. Nor will the roughly three million who dropped Obamacare coverage once the subsidies expired.
Though administration officials described the checks as a refund to consumers, it will return a disproportionate share of the fees to people with incomes of more than four times the federal poverty level, or around $65,000 for a single person. The $500 total represents more money than any excess fees those customers personally paid as part of their premiums.
The White House described the checks as a one-time refund of the user fees that were not intended to be repeated next year. But premiums in the marketplaces are on track to keep rising. Insurers have asked state regulators to increase prices by an average of about 15 percent next year, according to an analysis from KFF, a health care research group, though those rates are not yet final.
White House officials said they had the legal authority to use the money as they saw fit. It was collected from insurers to help operate the marketplace, but not all of it was needed. Because the user fees affected insurance premiums, the officials said it was appropriate to return the money to consumers who paid those premiums without the benefit of federal assistance.
The Biden administration had also sought to reroute some of this money, to help pay for contraceptive coverage.
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