Obamacare's crunch time crunch is no laughing matter

A day after the Obama administration crowed about the president’s appearance on an online comedy show that appeals to Obamacare’s crucial segment of younger Americans, White House officials are faced with a problem no one’s laughing about: Not enough people are signing up, and many don’t know just how big the penalty will be for breaking the law.

President Barack Obama urged young people to buy the mandated health insurance during a video skit posted Tuesday on the comic website Funny or Die. The mock interview with Zach Galifianakis, an actor famous from The Hangover comedy saga, quickly went viral. By Tuesday night, the video had 8 million views, and the administration was touting its success: Some 19,000 people navigated to Healthcare.gov directly from the video.

Galifianakis feigned annoyance when Obama, about halfway through the 6-minute clip, began urging young people to sign up for healthcare, sighing heavily before muttering, “Here we go.” But that demographic could make or break Obamacare, which needs about 40 percent of new enrollees to be young and healthy to keep premiums down.

That’s going to be a problem. In the administration’s latest numbers, also released Tuesday, only 27 percent of potential enrollees have been young. Department of Health and Human Services (HHS) Secretary Kathleen Sebelius testified Wednesday before the House Ways and Means Committee, telling lawmakers, “I think premiums are likely to go up.” She downplayed the impact by trying to paint the likely increases as less than rising costs before the Affordable Care Act.

Overall, the HHS said Tuesday more than 940,000 people signed up during February for private coverage under the healthcare law, bringing total enrollment to 4.2 million. That’s well below the 6 million HHS says it needs to put the system on a sound financial footing. And the 4.2 million are only those who signed up, not those who have actually started paying for their insurance. “I can’t tell you that, sir, because I don’t know that,” Sebelius told Rep. Tom Price, R-Ga., when he asked how many people are paying premiums.

Sebelius also said the administration will hold to the March 31 deadline to sign up for health insurance under Obamacare. Only 24 percent of the uninsured polled last month by the Kaiser Family Foundation knew that March 31 was the deadline. Only one in 10 previously uninsured who qualify for private insurance rather than Medicaid had signed up by the end of February, and only half of those had actually paid their premiums.

That means many people are facing a penalty, without really know what it is. The media has widely reported the penalty at $95, a lowball misrepresentation. In reality, the penalty will be the larger of two options. Those below the federal poverty line will pay $95 per uninsured adultand $47.50 per child, topping out at $285 per family. Everyone else will pay 1 percent of taxable annual income.

That 1 percent could translate into several hundred dollars, depending on how much people make above the minimum gross income level required for filing a tax return. For instance, someone who earns $50,000 could face a $400 penalty based on the 2013 minimum gross income level of $10,000 for an individual. And of course, that’s just the first year. The penalty in two years will be either 2.5 percent or $695 per person.

For anyone uninsured after March 31, a portion of the penalty applies for every month without insurance. But most people won’t be able to use Obamacare exchanges and subsidies after March 31. Once the enrollment period ends, only those who have life-changing events like a marriage, divorce, or birth of a child can enroll this year (unless, of course, you meet a few other exceptions).

There’s also another trap. If a young adult who’s uninsured ends up moving home—such that he becomes a dependent for tax purposes—his parents must pay up. A Gallup poll found that 15.9 percent of adults are still uninsured. Come April Fool’s day, “Obamacare meets its goals” may be the next running joke to grace the comedy airwaves.

The Associated Press contributed to this report.