As the Affordable Care Act’s federal healthcare exchange continues to malfunction, Congressional Republicans this week pressured the Obama administration about nearly $2 billion in loans for non-profit insurance startups. Sens. Orrin Hatch and Lamar Alexander, Republicans from Utah and Tennessee respectively, queried U.S. Secretary of Health and Human Services (HHS) Kathleen Sebelius by letter this week, questioning whether the insurance nonprofits would meet an intended goal of increasing competition in state healthcare insurance markets—and whether the government would receive payback for the loans.

As part of the new federal healthcare law, the federal government loaned money—some $1.8 billion by January—to 16 non-profit organizations in 24 states, for startup costs as well as solvency costs associated with financial reserve requirements. In May, “we noted that there was little evidence the ‘CO-OP program’ would promote greater competition and lower costs in most state insurance markets, and we questioned whether HHS had significantly underestimated the financial risk that these entities pose to the Federal Treasury,” the Congressmen wrote.

In the letter, Republican critics of the new federal healthcare law also inquired whether the “problematic launch” of the federal exchange website,, has affected the operation of non-profit insurers. Moreover, they asked the administration to disclose whether the insurers had provided required progress reports and whether they were meeting goals. In particular, Hatch and his colleagues asked about the administration’s decision to terminate the Vermont CO-OP loan, following the non-profit’s failure to obtain an insurance license from the state, as reported by World News Net.

In May, WCAX-TV in Vermont reported that the state’s department of financial regulation had discovered “several inadequacies,” including doubt over whether the non-profit would remain solvent and repay federal loans. Worse, Vermont regulators noted that rates offered by the co-op were significantly higher than those offered by private insurers operating on the state’s healthcare exchange, leaving its future dubious. Notably, Vermont’s state-based healthcare insurance exchange website—one state among 24 exempted from the federal website—is working. The site went down for planned maintenance on Thursday, however.

Earlier this year, some Republican senators had asked the Government Accountability Office to audit the non-profit insurers throughout the country, asking investigators to evaluate efforts to cover the uninsured in those 24 states with affordable insurance plans. They were also keen to know whether insurers planned to repay the government for those loans. An inspector general’s report from the federal government earlier this year asserted that 11 of 16 non-profit startups had spent more than estimated for initial costs, casting down on whether they’d survive.