Exclusive: Trump plans to send $500 Obamacare rebates before election

The Trump administration plans to send $500 rebate checks to as many as 1 million people who it says were overcharged for their coverage under Obamacare, Axios has learned.

Why it matters: The direct-deposit payment would be sent to people in 30 states before the Nov. 3 midterm election, as Trump touts savings from his tax-cut legislation and prescription drug plan.

• The payments also underscore a tenet of Trump's idea for remaking the health care system, which involves subsidizing more Americans directly for their coverage instead of paying health insurers.
• Trump plans to mention the rebates in his speech Wednesday night at the Republicans' midterm convention, which he's hosting in Dallas.

Zoom in: The money for the rebates would come from what the White House says is a $500 million fund of excess fees paid by Affordable Care Act recipients who were overcharged by insurance companies during the Biden administration.

• The excess fees were rendered back to the government, officials said.
• "That money was over-collected and just sitting there" in government accounts, a U.S. official told Axios.

Between the lines: Officials say the refunds are available to Obamacare enrollees who don't receive premium assistance under the insurance program.

• Alabama, Alaska Arkansas, Florida, Delaware, New Hampshire, Texas, Wisconsin, South Carolina, Michigan, Ohio, Mississippi and Missouri were specifically mentioned as states with relatively large numbers of recipients who are due refunds.

The big picture: Trump tried and failed in his first term to repeal Obamacare. Now he plans to use it to help further his own plans — and try to boost Republicans' chances in a difficult midterm election shadowed by voters' anger over high prices and the war in Iran.

The backstory: In 2023, the Biden administration proposed using the fees from this fund to help provide no-cost contraception for people whose ACA insurance plans didn't cover it, officials said.

• Republicans in Congress objected, saying the fees were dedicated to the upkeep of the Obamacare exchanges and that the Centers for Medicare & Medicaid Services lacked the authority to use the money for another purpose.
• Biden administration officials ultimately withdrew their proposal.

After the 2024 election, some GOP congressional policy staffers who had objected to the Biden contraception spending plan were hired by the Trump administration.

• The administration then reduced some of the fees to lower premiums, but realized there was a sizable chunk of money left for the rebate program as Trump began pushing a new health care plan, officials said.
• "It's time for Congress to pass President Trump's Great Healthcare Plan, which will finally begin prioritizing people instead of insurance company profits by sending billions in taxpayer-funded health care dollars directly to Americans to help them better afford health coverage and care," a U.S. official said.