President Trump said Thursday he will send $500 rebates to nearly 1 million Americans who faced higher premiums because of Obamacare “user fees” that fund the federal insurance exchange.
The White House said the fees, which are pegged to a percentage of each enrollee’s monthly premium, exceeded what the federal government needed to run the portal. At the same time, insurers rolled the cost of the fees into premiums for Obamacare plans.
“As a result, the Biden administration accumulated a significant surplus of funds that were not used to benefit the Americans who paid these higher premiums,” the White House said in a fact sheet.
Mr. Trump is directing the rebates to Obamacare users who don’t receive federal subsidies through the program “and therefore paid the full cost of Biden’s premium tax,” according to the administration.
“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 said.
The rebates will flow to people in 30 states that use the federally run Obamacare platform. The checks will start going out in October.
For Mr. Trump, the rebate achieves two objectives: dinging Obamacare, the law he loathes but has been unable to repeal in full, and dispatching money to everyday Americans, who will appreciate an unexpected windfall on the cusp of the November midterms.
Separately, Mr. Trump on Wednesday said he planned to dole out a $5,000 dividend to every adult American if the GOP retains the House and Senate in the midterms. It’s unclear how the program would work, and the price tag would likely exceed $1 trillion.
The Obamacare rebate is smaller in scope but will be a financial boon for enrollees across the country, mainly in red states and swing states that opted to use the federal Obamacare portal instead of setting up their own.
The states 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.
The Centers for Medicare & Medicaid Services sets Obamacare user fees each year. The fee typically ranges from 1.5% to 2.5% of monthly premiums.
The government uses the money to fund the insurance portal, consumer assistance centers and other aspects of promoting Obamacare, the program that Democrats muscled through Congress in 2010 to let people buy insurance on their own with the aid of income-based subsidies.
Mr. Trump and the GOP tried and failed to repeal Obamacare in 2017. Still, they eliminated its most contentious provision — the individual mandate that required Americans to obtain health insurance or pay a fee.
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