A taxpayer-backed Iowa health insurer created under ObamaCare has been taken over by the state amid deep financial problems, sending policyholders in the Midwest scrambling for new coverage and raising questions about the status of similar outfits across the country. 

The Iowa Insurance Division announced Wednesday that Insurance Commissioner Nick Gerhart was taking over CoOpportunity Health, a struggling cooperative that sprouted out of the Affordable Care Act. 

A local court had granted Gerhart's request to be appointed as "rehabilitator" of the nonprofit, after the state warned of its "hazardous financial condition." Gerhart now has the authority to manage the company -- and either restructure it or have its assets liquidated. 

Gerhart told customers that those who enrolled before Dec. 15 and make their premium payments can keep their insurance. 

But anyone who signed up Dec. 16 or later will not have coverage and now must enroll in other plans to stay insured. Further, if CoOpportunity Health goes under, a government safety net could protect those left holding their policies. However, the coverage "may be limited," the state warned. And Gerhart is advising that most of the 120,000 CoOpportunity Health policyholders in Iowa and Nebraska "may find it in their best interests" to find new carriers by Feb. 15 -- the deadline for open enrollment for 2015 coverage. 

CoOpportunity Health will no longer offer its policies through Iowa's online marketplace, either. 

For critics of the law, Wednesday's announcement was more evidence of the ACA's problems. 

"Here in Iowa, we were promised more [choices] and lower premiums, yet now we learn that one of two [companies] responsible for providing affordable insurance can't provide what the law promises," Drew Klein, director of the Iowa chapter of the conservative Americans for Prosperity, said. 

With CoOpportunity Health off the exchanges, it leaves plans offered by Coventry Healthcare as the only option for Iowans who qualify for the federal subsidies under the law. 

Coventry's parent company, Aetna, said it would work with state and federal regulators "to do all we can to aid in a solution." 

"That solution must be in the best interests of the people in both states and incorporate adequate pricing to ensure sustainability of coverage," Aetna said in a statement. 

Employers that have a CoOpportunity Health group insurance plan also have been told to work with brokers to find new coverage. 

Whether the confusion in Iowa portends problems elsewhere is unclear. 

CoOpportunity Health was one of roughly two-dozen customer-owned cooperatives approved by the federal government under the health law to offer competitive plans in the individual and small-group markets. 

"We do not believe that any other co-ops are facing immediate solvency problems," Aaron Albright, a spokesman for the federal Centers for Medicare & Medicaid Services, told The Des Moines Register. 

The Iowa company, which formed last year, had been promised $146 million from the Centers for Medicare & Medicaid Services. 

The company was once seen as a new competitor for Iowa's dominant health insurer, Wellmark, that would expand consumer choice and potentially drive down prices. Wellmark has declined to participate in the exchange. 

But the company's finances were a challenge, and they were made worse earlier this month when a provision adopted by Congress reduced the amount of its assets by about $60 million. CMS told the company last week that it would not provide additional funding immediately. The company, which did not oppose the state takeover, expects to receive additional federal risk mitigation payments in the second half of 2015. 

The company is not yet insolvent, but its cash and invested assets dropped to $17.2 million earlier this month, down significantly from weeks earlier, Gerhart's court petition said. CoOpportunity Health is also facing "extremely high health care utilization" by its members, Gerhart's office said. 

The Associated Press contributed to this report.