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Obamacare's Solyndra? Oversight panel expands co-ops probe, renews document demand to HHS

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Photo - Rep. Darrell Issa is chairman of the House Oversight and Government Reform Committee. (AP Photo)
Rep. Darrell Issa is chairman of the House Oversight and Government Reform Committee. (AP Photo)
News,Richard Pollock,Watchdog Blog

Citing worries that "taxpayers will lose a significant amount of the money," House Committee on Oversight and Government Reform officials are significantly expanding their probe of the $2 billion Obamacare loan program to fund new health insurance co-operatives to compete with established private-sector firms in 24 states.

Committee Chairman Rep. Darrell Issa, R-Calif., requested a lengthy list of documents in a March 25, 2013, letter to officials with eight of the groups starting co-ops. Together, the eight have received more than $657 million in low-interest loans that must be repaid at a future date.

The requested documents include details of how they've spent the federal funds to date and copies of "all documents and communications" their employees have exchanged with Obama administration officials in the White House and the U.S. Department of Health and Human Services.

Also signing the letter were subcommittee Chairmen Rep. Jim Jordan, R-Ohio, and Rep. James Lankford, R-Okla.

The co-op program is overseen by the Center for Consumer Information and Insurance Oversight in HHS.

The eight new co-op groups under the committee's focus are CoOportunity Health of Iowa; Maine Community Health Options; Louisiana Health Cooperative; Illinois-based Land of Lincoln Health Inc.; Kentucky Health Cooperative; Evergreen Health Cooperative in Maryland; Montana Health Cooperative; and HealthyCT in Connecticut.

The committee previously contacted Hospitality Health, based in Nevada and FreeLancers Insurance Co., which is establishing co-ops in New York, New Jersey and Oregon, bringing the total of co-ops being reviewed to 13 of the 24 to be established. The 10 groups establishing the 13 new co-ops have received $1.06 billion in federal loans.

In a second March 25 letter, the oversight committee leaders sternly reminded HHS Secretary Kathleen Sebelius that it had yet to receive any of the documents about the Obamacare co-op program requested from her last October in a letter signed by Issa and Rep. Trey Gowdy, R-S.C., chairman of the oversight panel's Subcommittee on Health Care, the District of Columbia, Census and the National Archives.

A Feb. 12, 2013, response signed by Marilyn Tavenner, acting administrator of the Centers for Medicare and Medicaid Services, or CMS, "took nearly four months to prepare" but "failed to provide any of the information the committee requested."

"We remain concerned that taxpayers will lose a significant amount of the money awarded through the co-op program," Issa, Lankford and Jordan said in the letter to Sebelius.

"According to the Office of Management and Budget, taxpayer losses are projected at 43.2 percent for the loans given out through the co-op program," they said, noting that the "mean average taxpayer loss for other non-educational loans made as part of the federal government's Direct Loan Program is 8.3 percent."

Sebelius was given an April 8, 2013, deadline and was told that "if the department does not produce the requested documents by this time, we will be forced to consider use of the compulsory process."

The compulsory process would include issuing a congressional subpoena, which the Obama administration would then have to decide whether to comply with the committee's request or challenge it in federal court.

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