Families face coverage gap amid insurance cancellations, ObamaCare website woes

The Christmas rush this year won't just be for items that go under the tree – for those trying to buy a new insurance policy effective Jan.1, the deadline is Dec. 23.

“I think it's fair to say that you're going to have to see hundreds of thousands of people enroll pretty much every day between now and the 23rd in order to get to the goal,” said Dan Mendelson, CEO of Avalere Health. “But [Obama administration officials] still have a massive problem of millions of people that supposedly still need coverage and a system that really isn’t built well enough to handle that.”

The goal is to sign up to 7 million people for private insurance and 9 million for Medicaid by the end of March, after which the IRS is expected to start penalizing those who don’t have insurance.

But it will be a heavy lift, and some Americans could inevitably experience a coverage gap by Jan. 1 – since roughly 5 million policies already were canceled because they didn’t meet the requirements of ObamaCare, and the website to sign up for new coverage isn’t working smoothly for everybody.

All canceled policies expire on Jan. 1, so those families are now scrambling to find a new one by the deadline of Dec. 23. So are those who were uninsured to begin with, which leaves a huge backlog.

“The rollout has been very rocky and it's caused major, major disruptions,” Mendelson said. “And at this point, I think the question is how do you operate a salvage operation that will get you back on track?”

Mendelson says so far, the total enrollment is about 150,000 for both the state and federal exchanges, but more than half that -- 80,000 -- came from just California, meaning the federal marketplaces are way behind.

“To get 5 million people -- who have received individual cancellations in the last couple months -- signed up by Dec. 23, you have to run through the system well over 200,000 people per day for those 23 days in December,” said James Capretta, with the Ethics and Public Policy Center. “So is the website really capable of handling 200,000 sign ups just to handle the individual cancellations?”

But the pre-Christmas crush isn't the only problem. The federal government hasn't built the software to accurately tell insurance companies who has actually enrolled. One report says up to one third of the enrollments since Oct. 1 have errors, so people may think they have coverage when they do not.

In fact, officials say the software to make that work correctly hasn't even been built yet.