UPDATE 2-Top U.S. Insurer Expects Obamacare Enrollment Extension

By Caroline Humer

Nov 6 (Reuters) - One of the largest health insurers on the Obamacare online marketplaces said on Wednesday it expects the U.S. government to extend enrollment for new coverage plans because of technical problems that have frustrated millions of potential applicants.

The comments from Humana Inc add to calls from Democratic and Republican lawmakers to wait until it is clear people can sign up for coverage under President Barack Obama's healthcare law, commonly called Obamacare.

Humana said that it has cut by half its estimate for how many new members it will enroll in Obamacare plans for 2014, in line with guidance it had received from "government entities" on how slowly the sign-up process was unfolding.

The government aims to have as many as 7 million Americans covered through online exchanges established under the 2010 Patient Protection and Affordable Care Act. The law, upheld by the U.S. Supreme Court last year, mandates everyone have healthcare insurance coverage or pay a tax.

A significant shortfall in enrollees, particularly among young and healthy Americans who cost less to insure, would undermine the ability of the exchanges to work financially.

"Our assumption is that there will be an extension to the open enrollment period," Humana Chief Operating Officer Jim Murray said during a call with investors to discuss quarterly results.

But U.S. Health and Human Services Secretary Kathleen Sebelius told a congressional hearing on Wednesday that an extension was "not an option."

"We are still at the beginning of a six-month open enrollment that ends at the end of March, and there's plenty of time to sign up for the new plans," she said.

AHIP, the main lobbying group for the insurance industry, has pushed back against lawmaker calls to both extend enrollment and delay the tax on people without insurers until 2015.

Robert Zirkelbach, spokesman for the group, said this week that such a delay "could have a destabilizing effect on insurance markets, resulting in higher premiums and coverage disruptions for individuals and families."

NO ENROLLMENT FIGURES

The Obama administration has not made enrollment data public since the marketplaces opened on Oct. 1, but is expected to provide figures next week. Humana said it originally expected 500,000 sign-ups for 2014 and now was estimated a figure closer to 250,000.

Humana said that it was waiting to hear from the government on how it would proceed due to the technical problems that have hobbled the federal HealthCare.gov website.

The company also said it was waiting to hear if it would delay the law's requirement that Americans have health insurance in 2014 or pay a fine. Humana executives did not give details on whether insurance companies had pressed for an extension, or what the industry may already have heard from the administration on the subject. Insurers met on Tuesday with White House chief of staff Denis McDonough.

The administration says it is working around the clock to have HealthCare.gov, which offers insurance plans in 36 states, working smoothly by Nov. 30 so that people can sign up in time to get coverage as of Jan. 1. Humana is offering plans through the site in 12 states, including Florida and Texas, home to a large concentration of the uninsured. It is also selling coverage on state-run exchanges in Kentucky and Colorado.

Humana said it had lowered its profitability outlook for the business in 2014 because of the lower-than-expected Obamacare enrollment, but said it still represented a long-term opportunity. Its comments are the most telling yet from insurers about the impact the slow start could have on their business.