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The problem of Obamacare's large knowledge gap

"Ignorance is never a good thing. They say it's bliss, and it really isn't, at least when it comes to this," says one insurance broker.

Obamacare's biggest target audience has a big blind spot — and a big hang-up when it comes to enrolling.

A man walks out of the UniVista Insurance company office after shopping for a health plan under the Affordable Care Act, also known as Obamacare in Miami.
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A man walks out of the UniVista Insurance company office after shopping for a health plan under the Affordable Care Act, also known as Obamacare in Miami.

Very few uninsured Americans — the most sought-after customers by Obamacare advocates — know the date of the deadline for signing up for health coverage for 2016, according to a survey released Thursday. Only 7 percent are aware that the open enrollment deadline is Jan. 31, the Kaiser Family Foundation survey finds.

And nearly half of the uninsured, 46 percent, say they've tried to get health insurance in the past year, but failed to do so because it was too expensive, by far the most common reason given for not obtaining coverage, the Kaiser survey showed.

Those findings underscore what may be the considerable difficulty officials face getting the remaining 10.5 million eligible uninsured Americans to enroll in health coverage for next year and future years.

Not only do most uninsured Americans not know when the deadline is, but many may be mistaken in the belief that they can't afford coverage — apparently, many people with moderate incomes are unaware of available financial aid that can significantly cut the price of their monthly premiums. Separately, some of the uninsured don't know they could qualify for Medicaid, the government program for the poor, which would cost them little or no money.

As a result, many who could benefit from insurance won't get it. And insurance plans that want higher enrollment from healthier customers to offset the costs of sicker customers will continue to feel pressure to raise premium prices.

"Ignorance is never a good thing," said Kevin Broyles, an insurance broker in Knoxville, Tennessee, who told CNBC that many of his customers are unaware they are eligible for subsidies worth thousands of dollars per year. "They say it's bliss, and it really isn't, at least when it comes to this."

The survey "certainly points to some of the challenges remaining in getting the remaining uninsured covered," said Bianca DiJulio, associate director of Kaiser's public policy opinion and survey research program. "We know it's a hard-to-reach group."

"Certainly we see that affordability remains a concern among the uninsured, that awareness of the deadline seems to be a challenge," she said.

DiJulio said that as more people have become enrolled in insurance under the Affordable Care Act, either through purchasing private coverage on government marketplaces, or through Medicaid, it becomes more difficult "in getting the remaining uninsured covered."

Many of the uninsured have low incomes, little or no familiarity with health insurance, and "are likely juggling multiple life priorities," DiJulio said.

Obama administration officials have made substantial efforts to spread the word about deadlines. On Tuesday, they extended until Thursday night the deadline for signing up for coverage on HealthCare.gov, the federal exchange that serves 38 states, for coverage that becomes effective Jan. 1.

Despite those outreach efforts, Kaiser's survey found that 65 percent of the uninsured said they did not know when the open enrollment deadline is.

Another 20 percent incorrectly said it is the end of this month. Six percent mistakenly believe the deadline has already passed, and 3 percent said some other time.

Even though there was widespread ignorance of the deadline, most uninsured people, 65 percent, said they knew that the Affordable Care Act requires them to have coverage, or be subject to a fine. That penalty will increase considerably in 2016, to $695 per adult, or 2.5 percent of household income, whichever is higher.

Fifty-five percent of the uninsured said they plan to get insured in the coming months, while 40 percent said they will remain uninsured, Kaiser found.

Despite the relatively high percentage of people planning to get covered, Obama administration officials have been more pessimistic about the chances of that level of response.

Health and Human Services Secretary Sylvia Burwell said she expects Obamacare enrollment to grow only slightly in 2016, to 10 million paying customers by the end of that year. Burwell expects only 1 out of every 4 currently uninsured people to sign up for coverage in 2016.

Burwell and other officials have repeatedly talked about the availability of federal tax credits, or subsidies, that would allow more than 7 out of every 10 current Obamacare customers to buy health plans with premiums of $75 or less per month after that aid is factored in.

Those subsidies are available to people whose adjusted gross household income is between one and four times the federal poverty level, or between $11,770 and about $47,000 for single people, or $24,250 and $97,000 for a family of four.

Broyles, the Tennessee insurance broker, said that while all of his customers — many of whom operate small businesses — know the subsidies exist, "they are just under the impression that, for some reason, they won't qualify."

Asked how how many do qualify, Broyles said, "over half."

When he tells those people they're eligible for the subsidies, and how much they are worth, Broyles said they look at him "like I just told them they could fly, the sound of disbelief."

Broyles said "I probably am surprised" about how many subsidy-eligible people aren't aware they qualify. But he added that he himself has been surprised that so many of his customers qualified, because he had believed they earned too much.

And despite what for many of those people is the perceived "stigma" of enrolling in Obamacare and the belief they'll be looked at differently by their doctors and billing clerks, all of the customers eligible for subsidies end up enrolling, he said.

"You'd be amazed what thousands of dollars can overcome," Broyles said.

When asked for comment about the Kaiser survey, Burwell's spokesman Benjamin Wakana said, "Our priority during Open Enrollment is to provide Americans with the information they need to understand their health insurance options and to select the best plan for their families. We are focused on reaching consumers directly - through email, phonecalls, text messaging, and online - guiding them through the enrollment process and reminding them about deadlines."

"Since Open Enrollment began, millions have signed up for quality coverage, and most people can find plans with premiums for less than $75 a month after tax credits. Due to the unprecedented demand for coverage, which continued to increase as we approached the December 15 deadline for January 1 coverage, we are extending the deadline to sign-up for January 1 coverage until 11:59pm PST December 17. If someone chooses not to buy health insurance by the final deadline of January 31 and could afford to do so,he or she is at risk of paying a $695 fee or more."