Kathleen Sebelius to step down as HHS secretary; OMB director will take her place

Health and Human Services Secretary Kathleen Sebelius announced her resignation Friday, ending a tumultuous tenure as the public face of the Affordable Care Act. In a Rose Garden ceremony, President Obama nominated his budget director as her successor.

“After five years of extraordinary service to our country, and seven and a half million Americans who’ve signed up for health coverage through the exchanges,” Sebelius has earned the right to step down, Obama said.

“Under Kathleen’s leadership, the team at HHS turned the corner,” he said. “And we are proud of her for that. That’s a a historic accomplishment.”

Sebelius entered the Cabinet in 2009, three months into Obama’s presidency, as a well-regarded former governor of conservative Kansas. She is leaving after months of intense criticism over the botched rollout last fall of the insurance marketplace.

During the firestorm, Obama made clear to his aides that he would not seek the resignation of his health secretary, and her departure is timed to brighter news for the White House as enrollment soared late last month.

Still, some White House allies said Thursday night that the troubled launch of HealthCare.gov had heightened tensions between Sebelius and the president’s staff members, who had become increasingly mistrustful of the department she led. Some Democrats, meanwhile, had argued privately that someone should be held accountable for the problems with the federal insurance exchange.

According to federal health officials, Sebelius approached Obama in early March and told him that, with the insurance enrollment period ending that month, the time had come for new leadership at HHS, the government’s largest domestic agency. A White House official, who spoke on the condition of anonymity to discuss internal deliberations, said Sebelius told the president that “she felt confident in the trajectory for enrollment and implementation of the Affordable Care Act.”

Obama on Friday nominated Office of Management and Budget Director Sylvia Mathews Burwell to take Sebelius’s place. Although Burwell does not have an extensive background in health-care policy, she is known for her strong management skills and has experience in issues of poverty and global health issues from her time at the Bill and Melinda Gates Foundation. Moreover, she is popular on Capitol Hill. The Senate confirmed her as OMB director 96 to 0 almost exactly a year ago. Her nomination to lead HHS will require Senate confirmation as well.

The news of Sebelius’s resignation, first reported Thursday night by Bloomberg News and the New York Times, caught Washington and health-care policy circles by surprise. Even the administration’s closest allies on health-care issues said they had no clue that her departure was imminent.

Senior Democrats on Capitol Hill also appeared to be caught off guard by the announcement. But they rushed out praise for Sebelius. House Minority Leader Nancy Pelosi (Calif.) said in a statement: “From day one, Secretary Kathleen Sebelius has remained laser-focused on a single purpose: to make health care a right, not a privilege, for all Americans. Her leadership has been forceful, effective, and essential.”

One former administration official, speaking, like others, on the condition of anonymity about behind-the-scenes working relationships, said Thursday night that Sebelius maintained a warm relationship with the president.

A health policy specialist close to the White House said that Obama’s staff had long preferred to be “running the show” on the health-care law but that Sebelius and her aides were increasingly “cut out of the process” after the launch of HealthCare.gov escalated into a political disaster for the president.

Other senior administration officials played central roles in helping repair the Web site and steer the law’s implementation after the rollout. Jeffrey D. Zients, a former OMB official who directs the National Economic Council, rejoined the administration to spearhead a team of federal employees and contractors who worked to repair HealthCare.gov. Meanwhile, Phil Schiliro, who served as Obama’s chief legislative liaison during his first term, returned in December to oversee the policy side of the law.

Sebelius was not part of the group of White House aides who recently told Obama in the Oval Office that health-care enrollment had surpassed 7 million. While she sat in the front row as the president told the nation on April 1 about the law’s success, he did not mention her in his speech.

Yet Sebelius remained a tireless promoter of the health-care law over the past six months, urging uninsured Americans to sign up on state and federal exchanges. Traveling to major cities such as Miami, Phoenix and Houston to reach residents whose Republican governors opposed the law, she held 43 local events and more than 100 local interviews over the past several months.

Sebelius was confirmed on April 28, 2009. Her tenure — 1,808 days as of Thursday — is about 500 days longer than the average for HHS secretaries, dating to the Carter administration. Federal health officials said Thursday night that she has not set a departure date but that her plan generally is to remain until her successor is confirmed. As for her next professional role, she “is considering other options,” the officials said.

Although Sebelius is best known as the public face of the Affordable Care Act, her work spanned issues from the H1N1 virus to childhood obesity to parity for mental health treatment.

With the equivalent of 77,000 full-time employees, she has had a sprawling domain at HHS. The department oversees Medicare and Medicaid as well as the National Institutes of Health, the Food and Drug Administration, the Centers for Disease Control and Prevention, and many smaller agencies. For that reason, the department’s work touches the lives of more Americans than most other parts of the government.

Congressional Republicans seized on Sebelius’s resignation to criticize the Affordable Care Act as unworkable.

“Secretary Sebelius was asked to promote something unready, poorly structured, and unpopular,” Sen. Charles E. Grassley (Iowa) said in a statement. “She was given a law that was just about written in pencil the way the deadlines changed all the time. That put her in a position of having a strained relationship with Congress. It’s disingenuous for the White House to distance itself from the problems and attribute them to partisan sniping at one member of the Administration. The next secretary might have a fresh start with the public and Congress but the flawed law is still the law.”

Despite the troubled launch of HealthCare.gov, which left many consumers unable to access the federal exchange for nearly two months, the administration managed to meet its goal of enrolling 7 million Americans during its initial sign-up period. On Thursday, Sebelius said that about 7.5 million consumers had enrolled, although those who don’t pay their premiums will not be insured.

In the fall, Sebelius proved steely under harsh congressional questioning, telling her Republican critics that they could blame her for the Web site’s problems.

“Access to HealthCare.gov has been a miserably frustrating experience for way too many Americans,” she said in her opening statement before the House Energy and Commerce Committee in late October. “So let me say directly to these Americans: You deserve better. I apologize. I’m accountable to you for fixing these problems. And I’m committed to earning your confidence back by fixing the site.”

Juliet Eilperin is a White House correspondent for The Washington Post, covering domestic and foreign policy as well as the culture of 1600 Pennsylvania Avenue. She is the author of two books—one on sharks, and another on Congress, not to be confused with each other—and has worked for the Post since 1998.
Amy Goldstein is a national reporter for The Washington Post focused on health-care policy.
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