US Health and Human Services Secretary Kathleen Sebelius is to resign after overseeing the botched rollout of US President Barack Obama’s signature Affordable Care Act healthcare reforms, a White House official said on Thursday.
Her departure removes a lightning rod for Republican critics as Obama and his Democrats try to retain control of the US Senate in midterm elections in November, where problems with the reforms, known as Obamacare, are set to be a key issue.
Last year’s Oct. 1 launch of the Affordable Care Act health insurance marketplace, which was plagued by computer problems, has been condemned by Republicans as a step toward socialized medicine.
Obama has chosen Sylvia Mathews Burwell, his budget director, to replace Sebelius, the official said. Burwell will manage the continued implementation of the Affordable Care Act, the signature legislation of Obama’s two terms as president.
Obama was due to announce the change with Sebelius and Burwell at his side at a White House event at 10:45am yesterday.
Sebelius, 65, became the public face for the troubled start to the enrollment period for Obamacare, which was meant to reduce the number of US citizens without health insurance and cut into massive US healthcare costs.
When enrollment opened in October last year, a Web site used to shop for insurance in 36 states, HealthCare.gov, failed to work for weeks.
Even as she took responsibility for the failures, Obama stuck by Sebelius, brushing aside pressure to fire her.
“Hold me accountable for the debacle. I’m responsible,” Sebelius said at an Oct. 30 hearing.
Burwell, a former official at the Gates Foundation and Wal-Mart Foundation, helped the administration manage its response to a shutdown of the US government brought on by a budget battle with Republicans in October last year.
She was also a key player in talks that yielded a two-year budget agreement in December.
“The president sought a nominee with strong credentials in management, implementation and performance for this important role,” the official said, noting that Burwell was confirmed unanimously to lead the budget office less than a year ago.
One of the first challenges for Burwell will be to work with health insurers in the coming months as they set prices for healthcare plans for next year.
Industry executives have warned that many states could see double-digit increases in monthly premiums as they try to account for the higher proportion of older policyholders, who often cost more to cover. Such price hikes would provide fodder for Republican opponents of the law, who say it creates financial burdens for individuals and businesses.
The enrollment period was ultimately successful, surpassing the 7 million figure the administration had predicted, but Sebelius, a former governor of Kansas, told Obama in early March she wanted to leave, a White House official said.
“She believed that once open enrollment ended, it would be the right time to transition the department to new leadership,” an official said.
In an interview with the New York Times, Sebelius said she wished she could take “all the animosity” toward the Affordable Care Act with her when she departs.
“If that could just leave with me and we could get to a new chapter, that would be terrific,” she said.
Although she was most associated with the complex and politically divisive Obamacare changes, Sebelius faced a number of challenges in her time as health secretary.