The Trump administration is preparing to issue $500 rebate payments to as many as 1 million Americans who officials say were charged too much for their Obamacare coverage, according to Axios.

The payments are expected to be delivered by direct deposit to eligible recipients across 30 states before the Nov. 3 midterm elections. The administration intends to highlight the rebates alongside savings it says are coming from Trump’s tax-cut legislation and prescription drug plan.

The initiative also reflects a broader element of Trump’s approach to reshaping the health care system: providing financial assistance directly to Americans to help cover insurance costs rather than directing those dollars to health insurers. Trump is also expected to discuss the rebates during a Wednesday night speech at the Republican midterm convention in Dallas.

According to administration officials, the rebate program would draw on approximately $500 million in excess fees that were paid by Affordable Care Act recipients who were allegedly overcharged by insurers during the Biden administration. Officials say the excess money was subsequently returned to the government.

“That money was over-collected and just sitting there” a U.S. official told Axios.

Administration officials say the refunds would be available to Obamacare enrollees who do not receive premium assistance through the program.

Officials specifically identified Alabama, Alaska, Arkansas, Florida, Delaware, New Hampshire, Texas, Wisconsin, South Carolina, Michigan, Ohio, Mississippi and Missouri as states with relatively large populations of people expected to qualify for refunds.

The planned payments represent a new use of Obamacare by Trump, who unsuccessfully sought to repeal the law during his first presidential term. The administration now intends to use the program as part of its broader health care agenda while seeking to navigate a difficult midterm election environment shaped by voter concerns about high prices and the war in Iran.

The money has a longer policy history. In 2023, the Biden administration proposed directing fees from the same fund toward providing no-cost contraception for people with ACA insurance plans that did not include contraceptive coverage.

Republicans in Congress opposed that proposal, arguing that the fees were intended to maintain the Obamacare exchanges and that the Centers for Medicare & Medicaid Services did not have the authority to redirect the funds to another purpose. The Biden administration eventually withdrew the proposal.

Following the 2024 election, some Republican congressional policy staffers who had opposed the Biden administration’s contraception proposal joined the Trump administration.

The Trump administration subsequently lowered some of the fees in an effort to reduce premiums. Officials said the administration then determined that a substantial amount of money remained available for a rebate program as Trump began advancing a new health care proposal.

“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.