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Few sign up during 'special' Obamacare enrollment

Millions of people are eligible for the ongoing special enrollment season of Obamacare, but a whole lot less than that are taking advantage of the offer.

Just 36,000 or so people signed up for insurance plans sold on HealthCare.gov during a grace period for Obamacare enrollment available to people being fined for not having health coverage last year, the federal government revealed Wednesday.

That equals only about 1,000 people for each of the 36 states being offered special enrollment through that federally run marketplace from March 15 through Sunday.

Ariel Fernandez, left, sits with Noel Nogues, an insurance advisor with UniVista Insurance, as he signs up for health insurance under the Affordable Care Act in Miami.
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Ariel Fernandez, left, sits with Noel Nogues, an insurance advisor with UniVista Insurance, as he signs up for health insurance under the Affordable Care Act in Miami.

The paltry tally is in sharp contrast to the nearly 11.7 million people nationally who signed up for Obamacare plans on both HealthCare.gov and the insurance marketplaces run by 13 states and the District of Columbia during open enrollment, which ran from Nov. 15 through Feb. 15.

The lowball result was revealed in the second paragraph of a long press release by the Centers for Medicare and Medicaid Services related to efforts by CMS to raise awareness of the tax implications of Obamacare.

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"This is cause for concern," said Dan Mendelson, CEO of the Avalere Health Consultancy. "It marks a slowing of enrollment, although one we had anticipated in our modeling and expectations. States and the federal government need to invest significant resources to get the next tranche of exchange enrollment, and it isn't happening fast enough."

Spike ahead?

Charles Gaba, operator of the the Obamacare tally-tracking site ACASignups.net, had expected there would be about 220,000 people who signed up under the grace period by now.

"Certainly, it's lower than I thought it might be," said Gaba. "What I'm wondering is...as we approach the 15th [of April], is there going to be a big spike?"

HealthCare.gov's special enrollment period, which began March 15 and runs through April 30, is available to people who only this tax season learned they were subject to a tax penalty for failing to have health insurance in 2014. The fine is the higher of $95 per adult, or 1 percent of taxable household income. That penalty increases to the higher of $325, or 2 percent of household income in 2015.

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Eleven other states and the District of Columbia are also allowing a special enrollment period on their Obamacare exchanges for their residents. Washington state's exchange last week said that about 4,000 people had signed up for its special enrollment period, a tally equal to 11 percent of HealthCare.gov's total. Three states—Colorado, Idaho and Massachusetts—are not offering grace periods.

These special enrollment periods were granted by the federal government and the participating state exchanges in recognition of the fact that millions of people remain unaware of Obamacare's individual mandate and associated penalty for failing to have coverage. Federal officials said this will be a one-time offer—they do not plan on having a special enrollment season in 2016, despite the fact that open enrollment for that year will end even earlier than it did this year.

'Great deal of misinformation'

This is the first tax season that the penalty is being applied. Because open enrollment closed two months before the April 15 tax filing deadline, there was concern among officials that people would become aware of their potential tax penalty for 2015 past the deadline for signing up for insurance this year, leaving them subject to the penalty in both for 2014 and 2015.

Mark Steber, chief tax officer of Jackson Hewitt Tax Service, on Tuesday told CNBC that there continues to be "a great deal of misinformation" about Obamacare.

Specifically, Steber said, people are surprised to hear they are subject to a penalty that is more than $95, and many people don't know that a grace period for tax season is being offered.

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"Which is kind of surprising," Steber said. "A lot of folks don't really know about this."

As a result, "we have not seen a big spike in enrollment" among clients who have gone to Jackson Hewitt for tax preparation during the grace period.

Grace period's 'symbolic value'

Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation, said, "This special enrollment period was always likely to have more symbolic value than practical significance in driving lots of sign-ups."

"There is a lot of churn in the insurance system, so many people who were uninsured last year and are now subject to a penalty may no longer be uninsured," Levitt said.

Kevin Counihan, the CEO of HealthCare.gov, said, "Our focus is squarely on increasing public awareness about this tax season."

"We're making sure marketplace consumers have the information they need to file their tax returns and that those who went without health coverage last year are aware of the requirement to have coverage or qualify for an exemption," Counihan said.

"Those who don't qualify for an exemption and remain uninsured [and] did not understand the implications of the requirement to have insurance will need to pay a fee, but also will have a final opportunity to enroll in affordable health coverage for the remainder of the year," he said.

"As of March 29, about 36,000 consumers have selected plans using the tax special enrollment period in states using the federally facilitated marketplace. Eligible consumers still have time to sign up and we want to encourage all those taxpayers who qualify to consider visiting HealthCare.gov to shop for affordable coverage."