President Donald Trump announced Thursday that the federal government will give $500 Obamacare refunds to about 1 million people starting in October.
The rebates will be provided to Obamacare (the unofficial name for the Affordable Care Act) enrollees in 30 states that use federally run exchanges to operate their health care markets, according to a White House fact sheet released Thursday.
White House officials said recipients will primarily be people in middle-income households who currently do not receive federal financial assistance for premiums.
The refund payments, totaling about $500 million, will be made weeks before the midterm elections. Democrats will have an advantage in the midterm elections if they take back at least one House from Republicans.
President Trump said in a speech Wednesday night that if Republicans win the midterm elections, the government will send a separate $5,000 election “dividend” to every adult American citizen.
President Donald Trump greets attendees on stage during the first day of the 2026 Republican National Convention at the American Airlines Center in Dallas, Texas, on September 9, 2026.
Justin Sullivan | Getty Images News | Getty Images
This financial commitment comes as Americans face a widespread affordability crisis, as the war in Iran continues to drive up the cost of everyday items like gasoline, and as millions of households experience higher health insurance premiums as ACA premium subsidies expire at the end of 2025.
Health policy experts said the rebates would provide relatively little financial relief to ACA enrollees who have seen higher premiums this year as enhanced federal subsidies expire.
“Band-Aids are not very effective,” Jonathan Oberlander, a professor of health policy and political science at the University of North Carolina at Chapel Hill, said in an email.
He said the policy was likely a form of “damage control” by the White House to distract from rising health care costs.
“This announcement is not about health policy, it’s about the 2026 parliamentary elections,” he wrote. “This is part of a broader effort by President Trump to gain continued Republican control of the House and Senate through promises of direct government payments to voters.”
Who is eligible for Obamacare rebates?
The 30 states eligible for Obamacare refunds are 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.
These states use the federal ACA exchange and other states use their own state-operated markets.
Oberlander said Democratic-governed states are more likely to run their own ACA markets than Republican-governed states.
The White House said in a statement that the $500 rebates will come from a surplus of “user fees,” explaining that excessive charges from the Biden administration are being passed on to consumers through higher health insurance premiums.
“Today’s action will directly provide refunds to Americans most exposed to the high costs imposed by the Biden Administration’s grave failures on Obamacare,” a White House fact sheet said.
Under Obamacare, health exchanges can collect user fees from insurance companies to help finance ACA market operations.
User fees have been around since 2014. Rates are revised annually by the Centers for Medicare and Medicaid Services and paid by health insurance companies participating in the ACA marketplace.
Oberlander said fees have gone up and down from year to year under the Biden administration, and at times were lower under the Biden administration than under the Trump administration.
ACA rebates primarily benefit middle-income earners
The temporary enhancement of the ACA premium tax credit is set to expire at the end of 2025 after the Republican majority in Congress rejected Democratic efforts to extend it.
As a result, households above 400% of the federal poverty line (about $63,000 for an individual and $129,000 for a family of four) lost all access to ACA subsidies that help reduce their monthly premiums. In other words, you must pay the full unsubsidized premium.
White House officials said the group would “primarily” benefit from the $500 refund checks. But some people between 100% and 400% of the poverty line are also eligible, officials said.
Larry Levitt, executive vice president of health policy at KFF, a health policy research group, said the latter group may include, for example, young people in their 20s who live in low-cost areas, who may not qualify for premium assistance.
The expiration of enhanced ACA subsidies that have been in place since 2021 has increased insurance costs for most ACA members, forcing millions to drop coverage or downgrade to cheaper, higher-quality plans.
The Department of Health and Human Services announced in June that as of February, the number of people enrolled in the ACA Marketplace had decreased by about 3 million people, or 13%, from the same period last year.
“While I have no doubt that middle-income ACA members who no longer receive premium assistance will welcome a $500 check, for many of them this will pale in comparison to the thousands of dollars they will pay in additional when the enhanced tax credit expires this year,” Levitt wrote in an email.
