Burwell said about 10.5 million uninsured people are eligible to sign up for enrollment on Obamacare exchanges. She expects that 1 in 4 of those currently uninsured people to sign up for 2016 coverage, and said that getting more than that rate would be difficult.
"We're starting this year with significantly fewer" eligible people, she said. "And they're a little harder to reach."
"We're going to work hard to reach them."
Still, Burwell tried to cast the new projection in a positive light.
"We believe 10 million is a strong and realistic goal," Burwell said. "We've see high levels of satisfaction with the marketplace, and expect that the vast majority of our current customers will re-enroll."
She also said "we're targeting our outreach and our messaging to make sure we get peoplethe information they need to make the right decision for their families."
"For instance, we're going to be talking a lot about financial assistance, since we know costs are on our customers' minds," Burwell said. "Starting November 1, our targeted outreach campaign will reach Americans where they live, work and play to inform them of the opportunity to enroll or re-enroll in coverage."
HHS also will be highlighting the tax penalty that people face if they fail to have some form of health coverage during the year. In 2016, that penalty rises to the greater of $695 per adult or 2.5 percent of household income. For 2015, the penalty is the from the greater of $325 per adult or 2 percent of household income.
HHS is projecting that between 11 million and 14.1 million people will actually select plans sold on Obamacare exchanges during the coming open enrollment period. But some of those people will not make their first month's premium payments, and others who get officially enrolled will end up leaving their plans during the course of the year.
Officials project that after attrition, 10 million paying customers will be in exchange plans by the end of 2016.
Frank, the assistant secretary for planning and evaluation, said that Obamacare enrollment is not plateauing, but instead is taking longer to reach a state of "equilibrium" in which the level of enrolled people and uninsured people will remain fairly static.
"We're going to be getting between 25 and 30 percent of the uninsured" next year, Frank said. "That's fairly big growth."
"We're not seeing evidence of having plateaued," he said. "We're seeing a much longer path to reach the long-term equilibrium for that market."
Obamacare expert Larry Levitt, senior vice president of the Kaiser Family Foundation, said, "One would expect the administration to set a bar that they're sure they can reach. That's just smart politics."
"Underlying this projection is the reality that the remaining uninsured are getting harder to reach, so it's going to very tough to increase enrollment substantially," Levitt said. "At some point, low enrollment growth may trigger a discussion about how much the ACA is doing to reduce the number of people uninsured, and whether the subsidies in the law are sufficient to make coverage affordable."
He added, "A big wildcard for 2016 is the fact that the individual mandate's penalties ramp up significantly. This is uncharted territory and no one really knows for sure how people will react."