Sebelius Saleswoman Role Left Gap in Obamacare Oversight

(Bloomberg) -- In the months before the Obamacare health insurance website debuted, Kathleen Sebelius gave few hints that anything might be wrong.

A June version of the site carrying educational material was easy to navigate, and an early September demonstration of the enrollment function appeared to work well, said a person with knowledge of the situation. With few concerns about the online exchange, the Health and Human Services secretary focused on a thing she does well: marketing.

Sebelius visited nine states to counter criticism and polls showing widespread public confusion, the agency said. Now, with the website riven by delays and software breakdowns, she is facing calls for her resignation and an expected hostile reception at a U.S. House hearing next week as the Obama administration struggles to fix the problems.

“The secretary’s the leader,” said Michael Leavitt, who held Sebelius’ job under former President George W. Bush and now runs a consulting firm that works with the state-run insurance exchanges. “All of the requirements of leadership come to bear during a crisis. It’s a matter of assuring that a plan’s in place, that it’s logical, that there’s accountability and that people are moving forward in a way that can solve the problem.”

The online exchange healthcare.gov was created as a marketplace for people in 36 states to shop for health insurance coverage. The site’s flaws have made it hard for people to enroll in plans, marring its debut and giving critics ammunition to undercut the law. Fourteen states created their own websites.

Travel Schedule

This week, as President Barack Obama has added two high-powered management consultants to help get the website up to speed, Sebelius plans to visit Arizona and Texas, according to her official HHS schedule, to continue promoting the Patient Protection and Affordable Care Act of 2010.

In a visit to Boston last night to attend a dinner at the Kennedy Forum on Community Mental Health, Sebelius opened her speech with a joke mocking her problems in Washington: “What a great room to be in tonight, for all kinds of reasons,” she said. “I can tell you it is good for my mental health.”

During a 15-minute speech, she echoed the president’s statements from earlier this week that the law is “more than a website,” calling it “an opportunity for millions of Americans to obtain mental health and physical health services.”

Relentless Saleswoman

Sebelius, a 65-year-old former Kansas governor, has been relentless in her support of the law created to provide health coverage for many of the 48 million uninsured Americans, supporters say. Since the summer, she has made multiple visits to Arizona, Florida, Illinois, Ohio, Pennsylvania, New Jersey, Missouri, Georgia and Texas, where Republican Governor Rick Perry has been one of the harshest critics of the law.

In the months before the U.S. website’s scheduled Oct. 1 opening, management of the work was left to officials at the Centers for Medicare & Medicaid Services.

On Oct. 1, when the site debuted, the troubles erupted quickly, surprising Sebelius and others at HHS and forcing them to delay a scheduled 2 p.m. news conference by two hours.

Department statements that day focused almost entirely on the huge number of people who initially visited the site, a volume that Sebelius continues to publicly blame for many of the technical flaws. There were 2.8 million visits on the first day and 81,000 calls to the toll-free telephone number set up to assist people with enrollment.

Marilyn Tavenner, the CMS administrator, spoke with top executives at CGI Group Inc., the Canadian technology company that is the main contractor, within a day or two of the initial breakdowns, said the person who asked not to be identified because they weren’t authorized to discuss the situation. Sebelius called Michael Roach, the company’s president and CEO within the last two weeks, the person said.

House Hearings

The House Energy and Commerce Committee is scheduled today to hear testimony from contractors for the site, including CGI. The government’s management of their efforts will likely be among the questions being asked.

On Oct. 30, Sebelius will be questioned by the same panel in a session during which Republicans are expected to focus on her responsibility for the breakdown. A handful of Republicans have already called for her resignation.

“Americans are tired of the Sebelius spin,” U.S. Senator Pat Roberts, a Republican from Sebelius’ home state of Kansas, said last week in criticism echoed by other party members.

Still, supporters of the law say she maintains the president’s confidence. Sebelius sat in the front row, center aisle on Oct. 21 when Obama declared in a speech from the White House that “nobody’s madder than me” about the website’s flaws.

‘Total Confidence’

Ron Pollack, executive director of Families USA, a consumer advocacy group in Washington that backs Obamacare, was at the speech and afterward hugged Sebelius, whom he has known since 1997. Her prominence at the event demonstrated Obama’s confidence that she is doing her job, he said.

The fact there are insurance marketplaces operating in every state is “an extraordinary accomplishment,” he said in a telephone interview. “Everything I hear is she has just got her head down and doing the work as best she can. People all around her have total confidence in her.”

Still, Obama this week drafted his soon-to-be top economic adviser, Jeffrey Zients, to help manage the repair of the flawed U.S. exchange website.

New Duties

Zients, 46, now a health-care entrepreneur, was named in September to replace Gene Sperling as director of the National Economic Council starting in January, after serving the government in the past as acting director of the Office of Management and Budget. He has agreed to take a detour to his new job by helping advise HHS on how to fix their website.

While a spokesman said Sebelius wasn’t available to be interviewed for this story, the secretary has outlined the reasons for her marketing push in the past.

In an August stop in Georgia, she said her mission was to get “correct facts” about the law to the public in states where Republicans were limiting access to its benefits. “That’s where a lot of my time and effort is going to be spent, on the markets that are really federal markets,” she said then.

She has also lobbied governors to build their own exchanges and expand Medicaid, the state-federal health program for the poor. She has had some success: Republican governors in states including Arizona, Michigan, Pennsylvania and Ohio have agreed to the Medicaid expansion, often against the wishes of colleagues in their state legislatures.

Repeated Message

Her message has been relentless: “This law will work better in states where everybody wants it to work,” she has said in comments made repeatedly. “It is more challenging when there’s misinformation put out on a regular basis, where you have to tell people, ‘Yes, the law will indeed apply to you.’”

Sebelius, a former two-term governor and insurance commissioner of Kansas, was an early supporter of Obama’s presidential candidacy and became his health secretary after the nomination of former Senate Majority Leader Tom Daschle fell through in 2009.

Roberts, her state’s senator, supported her nomination, as did the other U.S. senator from Kansas at the time, Republican Sam Brownback, who is now the governor.

Sebelius helped shepherd the Affordable Care Act through Congress and the regulatory process, and has described the law as the most important work she’s ever done.

‘Most Rewarding’

“This is a mission that I think is the most rewarding and exciting and challenging work I’ve ever done, at a moment in history that I think will benefit this country and millions of people forever,” she said in an August interview.

She has said she has “no clock” on how long she would stay in the administration. “My commitment is really to see this through,” she said at the time.

Until this spring, Sebelius enjoyed at least grudging respect from Republicans on Capitol Hill. Her support began to fray after she acknowledged making fundraising calls on behalf of Enroll America, a nonprofit group with close ties to the White House established to encourage people to sign up for coverage.

Republicans harshly questioned her at a May 16 hearing, suggesting calls to two health-care companies her department regulates, Johnson & Johnson and Kaiser Permanente, were particularly inappropriate.