'A $500 check is real money, but it doesn't make a likely double-digit proposed premium increase disappear,' says one analyst
Supporters cheer for President Donald Trump as he speaks on the first day of the Republican National Convention on Wednesday in Dallas.
The Trump administration's decision to issue $500 checks to roughly 1 million Americans is the latest signal that soaring healthcare costs will be a sticking point in the midterm elections.
President Donald Trump said Thursday that the $500 refunds should address high costs resulting from alleged "mismanagement" of the health-insurance plans operated under the Affordable Care Act during the Biden administration.
The White House said it will begin issuing the refunds next month to people in the 30 states that use Healthcare.gov. That excludes large states like California, New York and Pennsylvania that operate their own exchanges to purchase health insurance.
The money comes from fees paid by insurers to maintain Healthcare.gov, and there is extra cash since the Trump administration has cut down on advertising, according to Spencer Perlman, director of healthcare research for Veda Partners.
"Most of the 20 states that operate their own exchanges and are therefore ineligible for the rebates are Democratic-controlled states, meaning the funding will go disproportionately to higher-income individuals in mostly red states," Perlman said.
The people who do qualify will receive the $500 prior to the ACA's open-enrollment period, which begins Nov. 1 on Healthcare.gov, and the midterm elections on Nov. 3.
"A $500 check is real money, but it doesn't make a likely double-digit proposed premium increase disappear," Raymond James analyst Chris Meekins told MarketWatch. "Roughly 1 million people may get $500 while nearly 20 million rely on the ACA marketplace. The check is temporary; the premium increase is recurring."
The cost of premiums for ACA plans is expected to soar again next year. Health insurers have requested a 15% increase for 2027, according to KFF. That's after premiums ended up going up by 20% in 2026, in part because the federal tax subsidies that made these plans more affordable expired in 2025.
Rising healthcare costs have been a major issue for lawmakers in recent years. In 2025, Democratic leadership shut down the government in part to convince Republicans to extend Obamacare tax credits, which ended up expiring.
Trump has revealed several ideas this year to help stem healthcare costs, like proposing "payments" for Americans to buy their own healthcare and medical care using health savings accounts, or launching TrumpRx, a clearinghouse for people to purchase certain discounted prescription drugs with cash. It's unclear whether either initiative will save Americans money.
His announcement about the $500 refunds came a day after promising $5,000 checks to Americans if Republicans win the midterm elections. Speaking at the GOP's midterm convention in Dallas on Wednesday night, Trump said he will provide every adult U.S. citizen with what he called a dividend if his party wins both the House of Representatives and the Senate this fall. Trump has floated similar ideas in the past, but proposals like $2,000 payments related to tariffs never materialized. What's more, such dividend checks would require congressional approval.
A White House official said the $500 checks do not require such approval, noting the money will come from exchange fees collected by the Biden administration.
Democrats are currently forecast to take back control of the House in the Nov. 3 elections, while experts predict Republicans are likely to retain their slim majority in the Senate.
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