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Rumor Check: Obama Uses Obamacare to Pay Off Crony to The Tune of $340 Million

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Rumor Check: Obama Uses Obamacare to Pay Off Crony to The Tune of $340 Million

Is President Obama using his administration’s landmark legislative accomplishment as a vehicle to reward a longtime friend and political ally to the tune of $340 million?

That viral accusation has just begun making the rounds thanks to several conservative news sites, most notably Lifesitenews and the Washington Examiner. These sites allege that a woman named Sara Horowitz, who heads up the New York-based Freelancers’ Insurance Company (and its parent corporation, the Freelancers’ Union), has been loaned $340 million by the federal government to help set up Obamacare’s “exchanges” in New York, New Jersey and Oregon, in spite of a dubious record when it comes to actual customers. Lifesitenews sums up the accusation this way:

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.

All of these charges are serious, so we thought we’d take a look into the evidence for each. What we found may surprise you.

Rumor Check: Obama Uses Obamacare to Pay Off Sara Horowitz of Freelance Insurance Company to The Tune of $340 Million

Sara Horowitz (Photo Credit: AP)

Accusation #1: The Freelancers’ Insurance Company is “known for not keeping its contractual obligations”

In assessing this story of alleged political cronyism, probably the most relevant piece to be considered is the complaint that Sara Horowitz’s company is demonstrably unfit for the responsibility involved, and is, in fact, a poor provider of health insurance. After all, the nature of cronyism is that it rewards incompetence with connections. In marshaling evidence for the proposition that the Freelancers’ Insurance Company (FIC) is an incompetent health insurance provider, Lifesitenews makes the following subset of accusations:

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.”

After further digging on our part, it appears that only some of these points are valid, though arguably still enough of them to raise questions. The statistic from the National Association of Insurance Commissioners proved difficult to verify, and the reference to the “hate blog” was potentially overblown, given that the blog in question does not appear to have been active since early 2009. This is relevant, because even according to Horowitz herself, her company failed to be fully profitable or functional during its first year (2008), and as such, the “hate blog” would make sense as a phenomenon from that first year alone. Certainly, the absence of complaints on the site since early 2009 suggests that the people involved either took their business elsewhere or had their issues resolved.

However, given the other evidence regarding FIC’s business practices, the former course of action seems more likely. FIC has a record of consumer satisfaction that could charitably be called mixed. Its two year streak as “worst” company in terms of number of complaints is quite real. From last year’s “New York Consumer Guide to Health Insurance Companies“:

Rumor Check: Obama Uses Obamacare to Pay Off Sara Horowitz of Freelance Insurance Company to The Tune of $340 Million

And from the same document in 2011:

Rumor Check: Obama Uses Obamacare to Pay Off Sara Horowitz of Freelance Insurance Company to The Tune of $340 Million

Readers will note that in both cases, the absolute bottom rank goes to FIC. It is also worth noting that in 2012, of the 59 complaints that were filed against FIC, 30 were found to be accurate, whereas in 2011, 31 out of 62 were found to be accurate. In other words, at least half of all complaints against FIC have been upheld over the past two years by the New York State Insurance Department, which also ranks them dead last out of all the providers in the state. Not exactly a vote of confidence.

On the other hand, there are mitigating factors that may explain FIC’s attractiveness as a model for the administration’s health insurance exchanges. In an article offering advice to freelancers on how to obtain health insurance, Forbes Magazine described FIC this way:

If you live in New York State, for example,The Freelancers Union offers insurance through the Freelancers Insurance Company (F.I.C.). It currently covers about 25,000 independent workers and their family members and offers premiums that are reportedly a third below market rates. Individual plans might run from $225 to $600 per month.

In other words, judging by the statistics and pricing, the tradeoff in getting a plan from FIC is fairly simple to outline: Low prices, but also a lower quality of service. Moreover, a profile of Sara Horowitz in Slate Magazine detailed other factors that might lead the administration to find FIC’s model attractive – for instance, the low rate of compensation that Horowitz herself enjoys, and the attention by the company to crafting plans that match up to the needs of its specific demographic (IE freelance workers). In other words, even if cronyism is involved, it goes beyond personal affection between the President and Horowitz — her version of insurance coverage also matches up fairly well with the administration’s ideological vision. This can also be seen in this interview with Horowitz from BigThink: See site

So is FIC a terrible provider of health insurance that could not possibly get federal loans if not for cronyism? Not exactly. It is admittedly an unlikely recipient in some ways, but it also does not operate in the same way as a conventional insurance company, and its model of providing insurance lines up with the administration’s ideological goals. As to the accusation that Sara Horowitz is a bosom friend of President Obama? Read on.

Accusation #2: Sara Horowitz is a friend of President Obama’s from his community organizing days

While there is little doubt that President Obama and Horowitz have crossed paths and share certain goals, the evidence that the two were affiliated during the president’s days as a community organizer is nonexistent, and the idea that they are “friends” as opposed to simply “allies” is also difficult to verify. The earliest association on record for the two occurred during President Obama’s days as an Illinois State Senator, when they both served as founding members of the liberal organization Demos. From an archived version of Demos’ website (emphasis added):

Demos began as a vision of Charles Halpern–then the president of the Nathan Cummings Foundation and a veteran non-profit entrepreneur. He was troubled by the narrow conversation about America’s future. On the eve of the 21st century, it seemed that America no longer had the imagination to tackle its largest problems and build a more just society.

Halpern set out to challenge the status quo with a new institution. He envisioned a dynamic hub for creative scholars and cutting-edge practitioners–an organization that combined ideas and action to chart a new set of priorities for America. By 1999, Halpern had assembled a talented working group to develop Demos. Among them were David Callahan, a fellow at the Century Foundation; Rob Fersh, a long-time policy advocate; Stephen Heintz, Vice-President of the East-West Institute; Sara Horowitz, founder of Working Today; Arnie Miller, a leading executive recruiter; Barack Obama, then a state senator from Illinois; David Skaggs, a congressman from Colorado; and Linda Tarr-Whelan, an internationally recognized expert on women and economic development. This working group would eventually form the core of Demos’ staff and Board of Trustees.

In other words, Obama and Horowitz have a past professional connection, but there is no evidence of a personal one. However, it should be noted that in cases like this, a professional connection may be all that’s needed. There is one other former leading figure at Demos to whom Obama tried to offer a substantial amount of agenda-setting power: none other than former Green Jobs Czar Van Jones.

Accusation #3: Horowitz is a former leader of a Soros-funded group

This accusation is the most unambiguously accurate, and it once again goes back to Horowitz’s relationship with Demos. As it happens, in the records of Soros’ Tides Foundation, Demos is listed as a grantee under Tides’ 2010 list of grantees, having received a grant of $53,970:

Rumor Check: Obama Uses Obamacare to Pay Off Sara Horowitz of Freelance Insurance Company to The Tune of $340 Million

As established above, Horowitz was one of Demos’ founders. In fairness to her, she may have left before the group appeared on the list of recipients of Soros’ money, but the connection remains.

Then again, while this accusation is true, it also is the least conclusive in terms of its value as proof. The idea that President Obama would hire a committed liberal to manage his health insurance exchanges is not, in itself, surprising or newsworthy, and it scarcely proves cronyism exists in this case. Not that the suspicion is entirely unreasonable, given the problematic record of FIC, and the existing professional connection between Sara Horowitz and President Obama, but suspicion is not proof.

Conclusion

Even in the absence of definitive proof of cronyism, the checkered record of FIC leaves open the question of why it received such a large amount of federal money. The existence of such a question implies the need for a greater degree of transparency. Accusations of cronyism are more plausible when the standards by which such loans are given out are left up to the imagination, and certainly, that is the case when it comes to the funding for those who set up these insurance exchanges. Hopefully, the congressional investigation into these matters will shed some light on the subject.

by on Mar. 8, 2013 at 7:40 AM
Replies (31-40):
lga1965
by on Mar. 8, 2013 at 5:04 PM

 I didn't say that the Blaze was owned by Fox News. You and grannie have some reading problems, fer shur. Try again....this time read slower or have someone read my comments to you. ( This happens to you all the time....reading problems)

Quoting DSamuels:

Thank you! I gave up with her. Not worth the time.

Quoting grandmab125:

 Dust those cobwebs out again, Iga.  The Blaze is owned by Glen Beck, not Fox News.  Fox News, being the fair and balanced source that it is, quotes from all of it's sources, i.e., AP, ABC, CBS, NBC, CNN, etc.  If they didn't originate an article, they will put at the bottom "AP contributed to this report", for example.  When they are writing about what some one says, of course they "quote" the person.  SMH.


Quoting lga1965:


 Fox news quotes what he writes.


Google it.


Quoting DSamuels:

Yes, that is what I read. Funny, I don't see Fox News listed there. Hmmmm


Quoting lga1965:


 http://www.theblaze.com/blog/author/mytheosholt/



Mytheos Holt



Mytheos Holt is an Assistant Editor at the Blaze. He has held
positions at the Washington Times, National Review Online and the
Competitive Enterprise Institute. He also served as a speechwriter for
U.S. Senator John Barrasso (R-WY). A 2010 graduate of Wesleyan
University, Mytheos hails originally from Big Sur, CA.



 



Quoting DSamuels:

That's funny, I've never seen him on Fox News. It's also not listed on his bio on The Blaze, although the Washington Times and National Review is.

Again, this is not a Fox News story, there is no reason to bring them into the discussion.




Quoting lga1965:



  Mytheos Holt, the author of this blog, is an editor at The BLAZE,( a dishonest right wing news source online) and he reports on Fox News and THAt is why I dislike this thread and the author of the piece, okay? Get it?




Quoting DSamuels:

Um, we know you hate Fox News. This article isn't from therm. So what is your point?




Quoting lga1965:




 













Fox News is dishonest and biased. They are hardly "fair and balanced". They are the Republican news channel. And since the Tea Party has blossomed, they are the Tea Party of the cable news networks.





It is so discouraging and shameful that they spread rumors and slanted reports with misleading titles such as this one. And just as discouraging...predictable... of you to post this.




 



 


 


 

 

DSamuels
by Gold Member on Mar. 8, 2013 at 5:15 PM
2 moms liked this
I will type it s l o w l y for you, this article, and the author have NOTHING to do with FOX NEWS. You seem to be the one with comprehension problems dear. Nothing new there. You are the one with the rant about Fox News.

I really feel sorry for you sometimes. Then I get over it.


Quoting lga1965:

 I didn't say that the Blaze was owned by Fox News. You and grannie have some reading problems, fer shur. Try again....this time read slower or have someone read my comments to you. ( This happens to you all the time....reading problems)


Quoting DSamuels:

Thank you! I gave up with her. Not worth the time.


Quoting grandmab125:


 Dust those cobwebs out again, Iga.  The Blaze is owned by Glen Beck, not Fox News.  Fox News, being the fair and balanced source that it is, quotes from all of it's sources, i.e., AP, ABC, CBS, NBC, CNN, etc.  If they didn't originate an article, they will put at the bottom "AP contributed to this report", for example.  When they are writing about what some one says, of course they "quote" the person.  SMH.



Quoting lga1965:



 Fox news quotes what he writes.



Google it.



Quoting DSamuels:

Yes, that is what I read. Funny, I don't see Fox News listed there. Hmmmm



Quoting lga1965:



 http://www.theblaze.com/blog/author/mytheosholt/




Mytheos Holt




Mytheos Holt is an Assistant Editor at the Blaze. He has held
positions at the Washington Times, National Review Online and the
Competitive Enterprise Institute. He also served as a speechwriter for
U.S. Senator John Barrasso (R-WY). A 2010 graduate of Wesleyan
University, Mytheos hails originally from Big Sur, CA.




 




Quoting DSamuels:

That's funny, I've never seen him on Fox News. It's also not listed on his bio on The Blaze, although the Washington Times and National Review is.

Again, this is not a Fox News story, there is no reason to bring them into the discussion.





Quoting lga1965:




  Mytheos Holt, the author of this blog, is an editor at The BLAZE,( a dishonest right wing news source online) and he reports on Fox News and THAt is why I dislike this thread and the author of the piece, okay? Get it?





Quoting DSamuels:

Um, we know you hate Fox News. This article isn't from therm. So what is your point?





Quoting lga1965:





 
















Fox News is dishonest and biased. They are hardly "fair and balanced". They are the Republican news channel. And since the Tea Party has blossomed, they are the Tea Party of the cable news networks.






It is so discouraging and shameful that they spread rumors and slanted reports with misleading titles such as this one. And just as discouraging...predictable... of you to post this.





 




 



 



 


 

Posted on CafeMom Mobile
stormcris
by Christy on Mar. 8, 2013 at 5:22 PM
3 moms liked this

Nothing new and hardly just Obama. Look at the contracts GE gets or other companies. I had a post about cronyism and people were decidedly of the idea it doesn't happen but it does all the time everyday.

I bought herbs the other day from a friend for more to support them. Supporting people is a stronghold of society. It is not bad business for individuals.

However, when the company has issues and does not have a good record we should not help them to do that more by supporting them. But, many governments do just that. Then it becomes unfair and thus the reason they implemented the bidding system but even that has underhanded dealing. This becomes bad business and leads to overspending and money leakage. Contracts with the federal government especially should hold up to the scrutiny of the public and be published for we the people.

lga1965
by on Mar. 8, 2013 at 5:56 PM
I know. They don't. Except that Fox quotes his articles from different sources .
Did you get it this time ?


Quoting DSamuels:

I will type it s l o w l y for you, this article, and the author have NOTHING to do with FOX NEWS. You seem to be the one with comprehension problems dear. Nothing new there. You are the one with the rant about Fox News.



I really feel sorry for you sometimes. Then I get over it.




Quoting lga1965:

 I didn't say that the Blaze was owned by Fox News. You and grannie have some reading problems, fer shur. Try again....this time read slower or have someone read my comments to you. ( This happens to you all the time....reading problems)



Quoting DSamuels:

Thank you! I gave up with her. Not worth the time.



Quoting grandmab125:



 Dust those cobwebs out again, Iga.  The Blaze is owned by Glen Beck, not Fox News.  Fox News, being the fair and balanced source that it is, quotes from all of it's sources, i.e., AP, ABC, CBS, NBC, CNN, etc.  If they didn't originate an article, they will put at the bottom "AP contributed to this report", for example.  When they are writing about what some one says, of course they "quote" the person.  SMH.




Quoting lga1965:




 Fox news quotes what he writes.




Google it.




Quoting DSamuels:

Yes, that is what I read. Funny, I don't see Fox News listed there. Hmmmm




Quoting lga1965:




 http://www.theblaze.com/blog/author/mytheosholt/





Mytheos Holt





Mytheos Holt is an Assistant Editor at the Blaze. He has held
positions at the Washington Times, National Review Online and the
Competitive Enterprise Institute. He also served as a speechwriter for
U.S. Senator John Barrasso (R-WY). A 2010 graduate of Wesleyan
University, Mytheos hails originally from Big Sur, CA.





 





Quoting DSamuels:

That's funny, I've never seen him on Fox News. It's also not listed on his bio on The Blaze, although the Washington Times and National Review is.

Again, this is not a Fox News story, there is no reason to bring them into the discussion.






Quoting lga1965:





  Mytheos Holt, the author of this blog, is an editor at The BLAZE,( a dishonest right wing news source online) and he reports on Fox News and THAt is why I dislike this thread and the author of the piece, okay? Get it?






Quoting DSamuels:

Um, we know you hate Fox News. This article isn't from therm. So what is your point?






Quoting lga1965:






 



















Fox News is dishonest and biased. They are hardly "fair and balanced". They are the Republican news channel. And since the Tea Party has blossomed, they are the Tea Party of the cable news networks.







It is so discouraging and shameful that they spread rumors and slanted reports with misleading titles such as this one. And just as discouraging...predictable... of you to post this.






 





 




 




 



 

Posted on CafeMom Mobile
grandmab125
by Gold Member on Mar. 8, 2013 at 6:13 PM
1 mom liked this

 My reading comprehension skills far out weigh yours.  Nowhere in this article did it mention Fox News.  You're the one who threw that one in.  You're always throwing crap into your comments that has nothing to do with the post.  Then when people correct your eroneous remarks, you get snarky.

Quoting lga1965:

 I did not say that the Blaze  was owned by Fox News. No way. But Fox QUOTES this guy. Try reading more carefully.

Quoting grandmab125:

 Dust those cobwebs out again, Iga.  The Blaze is owned by Glen Beck, not Fox News.  Fox News, being the fair and balanced source that it is, quotes from all of it's sources, i.e., AP, ABC, CBS, NBC, CNN, etc.  If they didn't originate an article, they will put at the bottom "AP contributed to this report", for example.  When they are writing about what some one says, of course they "quote" the person.  SMH.

Quoting lga1965:

 Fox news quotes what he writes.

Google it.

Quoting DSamuels:

Yes, that is what I read. Funny, I don't see Fox News listed there. Hmmmm

Quoting lga1965:

 http://www.theblaze.com/blog/author/mytheosholt/


Mytheos Holt


Mytheos Holt is an Assistant Editor at the Blaze. He has held
positions at the Washington Times, National Review Online and the
Competitive Enterprise Institute. He also served as a speechwriter for
U.S. Senator John Barrasso (R-WY). A 2010 graduate of Wesleyan
University, Mytheos hails originally from Big Sur, CA.


 


Quoting DSamuels:

That's funny, I've never seen him on Fox News. It's also not listed on his bio on The Blaze, although the Washington Times and National Review is.

Again, this is not a Fox News story, there is no reason to bring them into the discussion.



Quoting lga1965:


  Mytheos Holt, the author of this blog, is an editor at The BLAZE,( a dishonest right wing news source online) and he reports on Fox News and THAt is why I dislike this thread and the author of the piece, okay? Get it?



Quoting DSamuels:

Um, we know you hate Fox News. This article isn't from therm. So what is your point?



Quoting lga1965:



 










Fox News is dishonest and biased. They are hardly "fair and balanced". They are the Republican news channel. And since the Tea Party has blossomed, they are the Tea Party of the cable news networks.




It is so discouraging and shameful that they spread rumors and slanted reports with misleading titles such as this one. And just as discouraging...predictable... of you to post this.



 


 

 

 

 

 

grandma B

candlegal
by Judy on Mar. 8, 2013 at 7:41 PM
1 mom liked this

yes it is

Quoting pvtjokerus:

 If this is in fact true, then it is very sad.


Quoting Billiejeens:

SHOCK!

(no not really)




lga1965
by on Mar. 8, 2013 at 11:17 PM

 Okay, he IS the President, In case you missed it, the Election was held last November. We are no longer campaigning at CM ....LOL...so all your Obama bashing doesn't change ANYTHING! He won! It's too late!

Or is it just that you have to express how much you hate him, no matter what? Romney didn't win.

Get with it!

TranquilMind
by Platinum Member on Mar. 9, 2013 at 1:49 AM
3 moms liked this

 

You've said a lot of wrong things,but this one just takes the cake.

You are inside the matrix and can't see it. 

Quoting brookiecookie87:


This world you live in where all the media is for Obama and hides anything bad about him doesn't exist.

 

 

 

brookiecookie87
by Platinum Member on Mar. 9, 2013 at 8:56 AM


I see multiple media sources. I can acknowledge there are Pro-Democratic media sources, and that there are pro-liberal media sources.

You live in a world where every media source is Pro-Obama.

So who exactly lives "inside the matrix and can't see" again?

Fox news is the biggest News media source/site out there.  And it's everywhere. If I go to Walgreens and they have a tv it is Fox News. If I go to McDonalds and they have a tv it is Fox News. If I go to the dentist and they have a tv it is Fox News.

There are rare situations where a place will be using CNN.

Just because you can't see past the propaganda fox news feeds you about Obama owning the media  doesn't make me blind.

Quoting TranquilMind:

You've said a lot of wrong things,but this one just takes the cake.

You are inside the matrix and can't see it. 

Quoting brookiecookie87:


This world you live in where all the media is for Obama and hides anything bad about him doesn't exist.



Join us on the 99% Moms group!
The Ninety-Nine Percent Moms   

If they enforced bank regulations like they do park rules, we wouldn't be in this mess

stacymomof2
by Ruby Member on Mar. 9, 2013 at 9:51 AM

Cronyism is alive and well, I see.  

I wonder why all the conservatives are so surprised when Obama turns out to be just like any other politician, he's no "messiah" and being better than anything else that has come along for the last decade doesn't mean that Obama supporters are blind to this kind of crap.  But then when supporters say "yeah, that sucks" it seems conservatives call them hypocrites.  It's really a no win, where is this scrupulous candidate that everyone can get behind 100%?  Non existant.  We can only hope to get someone who *usually* does stuff that we don't hate.  lol

Anyway for a Blaze editor there is quite a bit of background on this piece, and dare I say, a non-hysetrical conclusion.  Of course the headline doesn't match the story, but as far as the body of the peice it seems to be a nice bit of journalism.  I suppose many people will read the headline, sock it away as "Obama payoff" (not what happened here, exactly) and repeat it for the next year as "remember when Obama cut a check for his buddies."  

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