Is Sebelius shaking down health-care execs to finance Obamacare?

Geoffrey Cowley, @geoffreycowley




U.S. Secretary of Health and Human Services Kathleen Sebelius speaks during the opening plenary of the National Health Policy Conference organized by The AcademyHealth February 4, 2013 in Washington, DC. Sebelius spoke on the Obama Administration’s health policy priorities. (Photo by Alex Wong/Getty Images)

Health care reform may be President Obama’s signature legislative achievement, but it’s still a work in progress. The Affordable Care Act’s most ambitious provisions—the expansion of Medicaid , the rollout of 50 state-based insurance exchanges, the enforcement of a law requiring everyone to find coverage—are all set to kick in on January 1. The deadlines would be daunting even in a friendly political environment, but the path is now littered with landmines.

A small one exploded last weekend, after the Washington Post reported that Health and Human Services Secretary Kathleen Sebelius was soliciting private donations to help implement Obamacare. Congressional Republicans have forced the administration to go begging by rejecting its funding requests. But the same Republicans pounced when the HHS effort came to light—and the critics’ predictable questions have left the administration on its heels.

At issue is whether Sebelius has requested donations from industries her agency regulates—a practice that would be ethically improper and possibly illegal. The Post story forcefully asserted that she has. Under the headline “Sebelius turns to health executives to finance Obamacare,” the paper reported that she had spent the past three months hitting up insurance, hospital and pharmaceutical officials for “large financial donations” to help the government shepherd consumers into the nation’s new health system. The claim was attributed to an anonymous HHS official and an unnamed “industry person familiar with the secretary’s activities.”

The paper quoted agency spokesman Jason Young denying that Sebelius had “solicited funds from industries that HHS regulates.” But the charge set off a flurry of news coverage and righteous outrage. “To solicit funds from health-care executives to help pay for the implementation of the President’s $2.6 trillion health spending law is absurd,” Sen. Orrin Hatch said in a statement. “I will be seeking more information from the administration about these actions to help better understand whether there are conflicts of interest and if it violated federal law.”

Lamar Alexander, the senior Republican on the Senate health committee, went further, likening the secretary’s fundraising effort to the Iran-Contra scandal, in which Reagan administration officials secretly sold arms to Iran and funneled the proceeds to right-wing insurgents in Nicaragua. “Secretary Sebelius’ fundraising . . . should be fully investigated by Congress,” he told reporters in Nashville on Saturday.

Will these charges stick? Is a cabinet secretary really shaking down the very industries she regulates? HHS acknowledges that she has asked them to help raise public awareness. The agency also confirms that she has asked business leaders from outside the health sector to help finance groups like Enroll America, a nonprofit foundation set up to educate consumers about the new health care law. Those activities are all kosher under the Public Health Service Act.

But Young, the HHS spokesman, still disputes the central premise of the Washington Post story and all the criticism it has sparked. “The secretary has made no fundraising request to entities regulated by HHS,” he says. “We’ve worked with a wide range of stakeholders. But when it comes to fundraising, we ask only non-regulated entities”—that is, no one from the health-care industry.

If that’s true, HHS could quickly clear the air by releasing a log of the calls Sebelius has made. Young says the agency is busy preparing one and will release it shortly.

This scandal-plagued administration should hope it vindicates her, but the congressional Republicans calling for her head should reflect on their own role in the affair. After failing repeatedly to repeal or overturn Obamacare, they’re now working to thwart its implementation: that’s why Sibelius is begging business leaders for the funds to secure the nation’s health. The richest country in the world should be able to do better.


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