NEW YORK CITY, March 1, 2013, (LifeSiteNews.com) – An insurance company known for not keeping its contractual obligations has received $340 million in federal loans to set up a health care exchange under ObamaCare. Critics say the only apparent criteria for the loan is the fact that the company is led by a friend of Barack Obama during his community organizer days. She is also a former leader of a George Soros-funded politically radical organization.

The confluence of incompetence, cronyism, and political donations have many asking if the arrangement is above-board – and what that signals about America's future after the health care industry is rearranged.

Congress has opened an inquiry into the eligibility of President Obama’s close friend Sara Horowitz and her embattled health insurance company to receive $340 million in taxpayer-funded loans.

Horowitz, a former labor lawyer and community organizer, heads the Freelancers’ Union and the related Freelancers’ Insurance Company (FIC).

Despite the name, the Freelancers’ Union is not a union. It is the parent organization of Horowitz’s for-profit health insurance company, which serves 200,000+ customers, mostly freelancers who are ineligible for benefits through their employers.

FIC has been rated the “worst” insurer in New York for the past two years by state regulators, and has weathered numerous public relations and customer service crises since it launched in 2008. The company is so unpopular it has spawned its own hate blog, “Upset Freelancers’ Union Members,” where those who buy their healthcare from FIC meet to complain, strategize, and give each other tips on how to navigate labyrinthine restrictions and try to get results from the notoriously frustrating customer service hotline.

In 2011, the New York State Insurance Department ranked FIC dead last in customer satisfaction among insurers. Despite its relatively small size, FIC had the most complaints of all the state’s insurance providers. Last year, FIC again ranked “worst” in complaints. The National Association of Insurance Commissioners says FIC’s complaint rate is more than seven times the national average.

In half the complaints lodged against FIC by its customers, the insurance department ruled that “the health insurer did not comply with statutory or contractual obligations.”

None of this stopped the Obama administration from handing Horowitz a $340 million loan from the American taxpayers to start ObamaCare health care cooperatives.

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Horowitz’s loan is the single largest payout given under a little-known ObamaCare program that will pay about $2 billion to establish 24 such co-ops, which will compete against private insurers and state health insurance exchanges.

The tax-free loans are administrated by the U.S. Department of Health and Human Services' Center for Consumer Insurance Information and Oversight (CCIIO).

Horowitz’s payday has raised eyebrows in Washington, leading some to question the screening process for loan applicants, and fueling criticisms of cronyism in the White House.

Horowitz is a longtime close friend of Obama’s. When he was in the Illinois state senate, Horowitz and Obama worked together to launch the George Soros-funded liberal think tank Demos, a group that worked hand-in-hand with the controversial ACORN community organizing group, which Obama also worked alongside with its voter registration program, Project Vote.

Horowitz isn’t the only one getting the side-eye over her connections to Obama and subsequent taxpayer-funded payday. The Milwaukee Journal Sentinel reported that another recipient of a $56.4 million loan, Common Ground Healthcare Cooperative in Wisconsin, “is the Milwaukee affiliate of the Industrial Areas Foundation, founded in 1940 by Saul Alinsky, a famed community organizer and author of Rules for Radicals. The organization, based in Chicago, bills itself as the oldest and largest community organizing network.” The group got much of its initial funding from the Gamaliel Foundation, Obama’s former employer in Chicago.

“The question you have to ask, what [are] the screening criteria, if any, or on what basis are these awards based?” said Thomas P. Miller, a health care expert at the American Enterprise Institute.

It’s difficult to find concrete information about how CCIIO screened applicants for the co-op loans. The agency’s website says, “CO-OP applicants underwent background checks that included public records searches at the local, state, and national level as well as searches of federal debarment databases.”

Americans for Limited Government President Bill Wilson said he thought the main criterion was a previous connection to Obama. “The Saul Alinsky-affiliated, Common Ground Healthcare Cooperative of Wisconsin was formed in August, 2011, just three short months prior to applying for the taxpayer money,” said Wilson. “In true Rules for Radicals fashion, Obama’s administration found this group worthy of receiving $56,416,000 in taxpayer largesse.”

“These grants/loans reek of political payola,” Wilson said.