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Watch out for late fees: No more Obamacare delays

There will be no delay in the penalty most Americans face under President Barack Obama's health care reform law if they fail to obtain health coverage this year, U.S. Health and Human Services Secretary Kathleen Sebelius said on Wednesday.

Health and Human Services Secretary Kathleen Sebelius.
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Health and Human Services Secretary Kathleen Sebelius.

Sebelius also said there would be no postponement of this month's deadline for enrolling in coverage through new private health insurance marketplaces or the Medicaid program for the poor.

"No, sir," was Sebelius' categorical answer when asked about both prospects by Representative Kevin Brady of Texas at a hearing of the House of Representatives Ways and Means Committee.

(Read more: Obamacare: ACA enrollment just 4.2 million by Feb)

Speaking a day after her department released new Obamacare data showing private insurance enrollment rising to 4.2 million people as of March 1, Sebelius rebuffed Republican claims that the Patient Protection and Affordable Care Act's implementation was failing to attract enough enrollees.

In response to Representative James Renacci, an Ohio Republican, Sebelius said the sign-up effort would be a success despite the botched October rollout that led the nonpartisan Congressional Budget Office to pare back its enrollment forecast from 7 million to 6 million people.

"Success looks like millions of people with affordable health coverage, which we will have by the end of March in the private marketplace, in Medicaid, young adults on their family plans," she said.

The latest data shows February private enrollment dipping to 940,000 people from more than 1.1 million in January, a change the administration attributed to the shorter 28-day month.

Administration officials on Monday predicted that millions of enrollees will sign up for coverage in March, suggesting total enrollment could surpass the latest CBO forecast. But a private health care advisory firm and one of Obamacare's key architects said on Wednesday enrollment would likely fall short of the 6 million mark.

Targeting youth

The government is mounting an intensive enrollment drive aimed mainly at younger adults, aged 18 to 34, whose participation in the Obamacare marketplaces is vital to the program's success.

President Barack Obama appeared Tuesday for an interview on the comedy website, "Funny or Die," in a direct appeal to the site's audience of young adults.

The video drew 11 million viewers while Tuesday visits to the federal website HealthCare.gov surged 40 percent to more than 890,000, according to the administration.

"We will have, I think, a successful plan. We have a market. We have competition."

(Read more: How Obamacare's making a $5.6 billion problem worse)

But MIT professor Jonathan Gruber, who helped design Obamacare and the 2007 Massachusetts health care reform, said the administration was still likely to miss a 6 million target.

Consulting firm Avalere Health said in a report the final tally would likely be 5.4 million. That forecast assumes Obamacare will follow the same pattern as the Medicare Part D prescription drug plan rollout in 2006, which saw 22 percent of enrollees sign up in the final month.

The penalty for failure to obtain health coverage phases in over three years. It will rise from the greater of $95 per adult or 1 percent of family income for this year to $695 per adult or 2.5 percent of family income for 2016.

MIT's Gruber said that while the administration's current focus was on raising enrollment figures, details were not available on whether Obamacare was succeeding in its main goals of covering the uninsured and in reducing health care costs.

"The advocates who say it is working great are saying too much. And the opponents who say its working terribly are saying too much. We simply do not know how its working yet," Gruber said, adding that details would start to emerge over the next several months.

(Read more: Why Obamacare desperately needs watchdog: US rep)

"We just need to be patient and let it work out. And you know what, if it turns out to be bad, I have every faith in the American system that they'll get rid of it."

—By Reuters

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