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Obamacare to Save Consumers Money

hc-4Although many Americans think universal health care is a bad idea, Obamacare will save consumers money through health insurance exchanges. A tax credit will cover part of the cost of monthly health insurance premiums. The credit will be determined by your income and other factors, including  family size, age and the kind of insurance program selected.

If you’re paying $350 a month for health insurance now and the credit is $300 you would only pay $50 a month for health insurance. There are a number of other restrictions. Policies will be offered on your state’s health insurance exchanges online that will be set by state governments. They’re supposed to be up and running in January 2014, although some of them will be in operation as early as October.

How the Exchanges Might Work

The exchanges will work differently in each state but the one in Colorado seems to be a good example of how they will function. The exchange’s website, ConnectforHealthCo.com is already up and running, but is not selling insurance yet. A calculator demonstrates some of the potential savings from such an exchange.

Need Health Insurance? Get Great Rates Fast and Easy. A single 45 year-old man with an annual household income of $25,000 would receive a credit of $272 a month. A family consisting of a 45-year old woman, her 43-year old husband and two children would receive a tax credit of $892 a month if they made an income of around $50,000 a year. The same family would receive a tax credit of $763 a month if they made $60,000 a year.

The amount you save is based on your income, age and size of your family. The older you are, the larger your family is and the less money you make the larger the credit. Some news stories indicate that households that make as much as $92,000 a year might be eligible for credits.

Most Families will Save Money

The bottom line is that most families and many individuals will pay less for health insurance. The policies will be similar to those  currently offered.  Some people will not be eligible to participate in the exchanges, including those on Medicare and Medicaid and veterans who get their healthcare through the VA. The spouses and children of some of those individuals might be eligible for the credits though.

The best way to see how much you might save is to check and see if your state’s exchange has a website yet. States that do should have a calculator that can give you an estimate of what your tax credit might be.