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The Trump administration began sending $500 refunds Wednesday to Obamacare enrollees whom the White House said were overcharged for healthcare during the Biden administration. More than 950,000 Americans across 30 states are set to receive the payments, according to an administration official.

The Treasury Department is distributing the money through checks and direct deposits. Families with more than one affected person may receive multiple $500 payments, the official said.

Recipients will also receive a letter dated Sept. 30 from President Donald Trump. The letter is being mailed starting Thursday, according to the official.

“For years, the Biden Administration overcharged you to fund the operation of HealthCare.gov,” Trump writes in the letter viewed by CNBC. The White House had announced earlier this month that the refunds would begin going out in October.

Trump’s letter describes the refunds as a way to “restore Affordability, protect your hard-earned money, and lower the Cost of Healthcare.” He also tells recipients, “You have paid into this flawed System, and now you are finally getting something back.”

The payments arrive just over a month before the midterm elections. Republicans are trailing Democrats in national and battleground polls, while affordability has become a central election issue amid persistently high inflation and rising interest rates.

The Iran war has increased gasoline and energy prices for households. At the same time, rising Treasury bond yields have pushed up rates for consumers seeking car loans and mortgages.

The refunds also follow a major increase in health insurance premiums for millions of households. Enhanced Affordable Care Act premium subsidies expired at the end of 2025 after the Republican majority in Congress defeated Democratic efforts to extend them.

Those subsidies had reduced insurance premiums for people enrolled through Affordable Care Act marketplaces. Their expiration eliminated all federal premium assistance for individuals earning more than 400% of the federal poverty line.

The administration official said those people will be the primary recipients of the $500 refunds. The income threshold is roughly $63,000 for an individual and $129,000 for a family of four.

The official added that “some people” earning between 100% and 400% of the federal poverty line will also receive refunds. The administration did not provide a more specific breakdown for that group.

Jonathan Oberlander, a professor of health policy and political science at the University of North Carolina at Chapel Hill, told CNBC earlier this month that the policy was likely a form of “damage control” intended to divert attention from higher healthcare costs.

“This announcement is less about health policy and much more about the 2026 Congressional elections,” Oberlander wrote. “It’s part of a broader effort by President Trump to buy continued Republican control of the House and Senate via promises of direct government payments to voters.”

Health policy experts said a $500 refund does little to counter premium increases that reached several thousand dollars annually in many cases. Those increases affected enrollees who previously benefited from the enhanced subsidies.

The refunds will go to residents of Alabama, Alaska, Arizona, Arkansas, Delaware, Florida, Hawaii, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska and New Hampshire. North Carolina, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, Wisconsin and Wyoming are also included.

All 30 states use the federal Affordable Care Act exchange. Other states operate their own marketplaces and tend to be governed by Democrats, according to health policy experts cited in the source.

Texas will receive the largest number of refunds, with 139,000 people set to get payments, according to federal data shared with CNBC. Florida follows with 127,900 recipients.

The administration official said the refunds are funded by a “surplus” of “user fees” collected during the Biden administration. The White House said excessive charges were passed along to consumers through higher insurance premiums during the Biden era.

The Centers for Medicare and Medicaid Services collects user fees from insurers participating in the Affordable Care Act marketplace. Exchanges are permitted to collect those fees from insurance companies to finance marketplace operations.

Oberlander said the fees moved both higher and lower during different years of the Biden administration. At some points during the Biden era, they were lower than during the first Trump administration.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.