How do you rotate the hand from a neutral position:
to a supinated (palm facing up) position
I rotated the forearm bone on the y axis for demonstrative purposes which twists the elbow like a balloon animal
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In actual anatomy, the humerus (upper arm) would naturally rotate about 60-90 degrees, and the remaining 90-120 degrees would be performed at the distal end of the radius/ulna (essentially the wrist). To model this in a blender armature, I would rotate the upper arm bone ~70 degrees, and the forearm bone ~110 degrees.
Of course, this may introduce problems with skinning. You may want to break your upper and lower arms into 2 or 3 sub-bones each, with constraints that keep them from doing anything other than an axial rotation with respect to each other. Then you can weight paint the surrounding mesh in a gradual fashion so the mesh smoothly rotates just like in reality.