American Elephants

It Pays to Be a Crony of the President. by The Elephant's Child

This is an odd story. A health insurance company headed by an old friend from the days when President Obama was an Illinois state senator got a $340 million federal loan to establish Obamacare co-ops in New York, New Jersey and Oregon is spite of having a chronic record of consumer and regulatory complaints.

The New York-based Freelancers Insurance Company has been rated as the “worst” insurer for two straight years by state regulators,  according to Richard Pollock, of the Washington Examiner’s Watchdog Team. Data compiled by a national insurance association show an unusually high rate of consumer complaints.

The firm was founded by Sara Horowitz in 2009, who worked with Obama when he was in the Illinois state senate to launch Demos, a left-wing New York think tank funded in part by George Soros. The website of Demos described Horowitz and Obama as members of the founding group in 1999. Sometime between that date and November 6, 2011, reference to Obama was deleted.

Before incorporating FIC, Horowitz had established the Freelancers Union, a nonprofit organization that describes itself as offering “health insurance and other benefits, plus advocacy, solidarity, and resources for freelancers and independent workers.”

In 2012, Horowitz’s FIC won the largest single award under an obscure Obamacare provision that allocates $2 billion to establish 24 co-ops to compete against private insurers and state health insurance exchanges. Co-ops are collectively owned organizations that produce goods or services for the benefit of members instead of for profit.

The funds are awarded as tax-free loans by the U.S. Department of Health and Human Services’ Center for Consumer Insurance Information and Oversight.

The House Oversight and Government Reform Committee has opened an inquiry regarding FIC’s eligibility for the loans. The New York State Insurance Dept. ranked FIC last among commercial insurers with the most complaints , and 49th out of 50 among all of the stat’s insurance providers.

The department ruled that the insurer did not comply with statutory or contractual obligations in half the cases filed against the company. The National Association of Insurance Commissioners which represents 50 state insurance commissioners reported FIC’s complaint rate to be more than seven times the national average in the two most recent years for which information is available.

Horowitz was chosen in December to serve a three-year term as a director of the Federal Reserve Bank of New York. It apparently pays to be a friend of the president. Just gives you all sorts of confidence in ObamaCare, doesn’t it.

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