The White House announced Thursday that it plans to issue $500 refunds to close to a million people enrolled in Affordable Care Act plans.
The administration said in a fact sheet that the refunds come from "overcharges" collected in the Biden administration through user fees intended to fund the operation of the federal insurance exchange, Healthcare.gov. The refunds will be issued to those who do not receive premium premium assistance across the 30 states that use the federal exchange.
"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," per the fact sheet.
The administration said the $500 checks will be sent to eligible enrollees beginning in October.
The news was first reported Wednesday by Axios. The funds were returned to the feds after individuals were overcharged, and a government official told the outlet that the "money was over-collected and just sitting there" in federal accounts.
The Biden administration had proposed in 2023 to tap into the excess user fees to cover contraception at no cost for individuals who chose an ACA plan that did not offer coverage for birth control. That proposed rule was scuttled in December 2024 after drawing an outcry from conservatives.
“The departments have determined it appropriate to withdraw the proposed rules at this time to focus their time and resources on matters other than finalizing these rules,” agency chiefs said at the time.
ACA plans must offer certain preventive services without cost-sharing, but there are religious and moral exemptions for services like birth control. The proposal aimed to support access for those who may not have coverage otherwise due to an exemption.
The proposed rule received close to 45,000 comments.
The White House has been publicly critical of health plans and their role in escalating healthcare costs. The fact sheet on the refunds says the ACA user fees charged by payers were "far in excess of what was needed to run the exchange."
The Trump administration also took aim at payers in its Great Healthcare Plan, which proposes taking enhanced subsidies for ACA plans and depositing them into a health savings account for individuals to access and use to buy coverage.
"The big insurance companies lose and the people of our country win," Trump said in January when the plan was revealed.