The Trump administration started sending $500 refund checks Wednesday to nearly 1 million Affordable Care Act enrollees across 30 states, who officials say were overcharged under the Biden administration.

Trump's Letter to Enrollees

Each recipient will also receive a letter from President Donald Trump explaining the payout, CBS News reported on Wednesday. "For years, the Biden Administration overcharged you to fund the operation of HealthCare.gov," Trump wrote in the letter. "That money belongs to hard-working Americans, not the Government, and now, I am returning it to you!"

Some households with more than one eligible person could get several payments by check or direct deposit, an administration official told the news outlet. The checks are primarily going to enrollees earning above 400% of the federal poverty line, according to the report.

Why Refunds Are Going Out

The refunds stem from surplus user fees the Centers for Medicare and Medicaid Services collected from insurers on federal exchange state fees the administration says were passed on to consumers through higher premiums, which officials have called mismanagement of the ACA, also known as Obamacare, program under the prior administration.

The rollout comes as millions of ACA enrollees face higher premiums after Congress allowed enhanced coverage subsidies to expire last year; a KFF poll released in March found half of respondents said their premiums or other costs were "a lot higher" than the previous year.

Mixed Reaction

Sen. Chuck Schumer (D-N.Y.) has called the $500 payout a "complete slap in the face," arguing it covers only a fraction of a typical hospital stay and urging the administration to instead restart expired ACA tax credits.

Health policy experts have also questioned the refund's impact. University of North Carolina professor Jonathan Oberlander described the move as an ineffective stopgap, while Raymond James analyst Chris Meekins said the checks don't offset the double-digit premium increases many of the roughly 20 million ACA marketplace enrollees are expected to face.