Sebelius Resigns; Obama Names OMB Director As Replacement

President Barack Obama Friday officially announced the resignation of Department of Health and Human Services Secretary Kathleen Sebelius, praising her efforts to implement the federal health overhaul and predicting that it would "benefit our families and our country for decades to come."

Kathleen Sebelius testifies in front of the Senate Finance Committee on Thursday on the HHS fiscal year 2015 budget. Sebelius resigned her post this week (AP Photo/Susan Walsh).

In a White House ceremony, the president also announced that he plans to nominate Sylvia Mathews Burwell, the director of the Office of Management and Budget, to replace Sebelius. News of the transition had leaked Thursday night.

Sebelius, a former Kansas governor and insurance commissioner, was an early supporter of Obama’s, endorsing him during his hard-fought Democratic primary campaign against Hillary Rodham Clinton. The president turned to her to run the massive federal agency after his first choice for the job, former Sen. Tom Daschle, ran into confirmation problems. Sebelius became the face of the administration’s relentless campaign to reform the country’s health care system, appearing regularly before Capitol Hill panels and traveling the country seeking to win converts to the effort.

But she also became the face of the health law’s troubled rollout last October when the federal online insurance marketplace, healthcare.gov, suffered numerous technological problems that stymied enrollments and frustrated millions of potential customers. The administration eventually had to call in technology experts, who spent more than a month working around the clock to retool the site, which was relaunched in early December. But the catastrophic rollout threatened to undermine Obama’s legacy program. It also spurred numerous congressional oversight hearings at which Sebelius was called in to explain what went wrong to both exasperated Republicans and Democrats.

Still, after the recovery of the website, Obama was able to announce this month that more than 7 million people had enrolled in health plans on the marketplaces, the same number that the Congressional Budget Office had predicted before the website problems. Sebelius said Thursday enrollment had grown to 7.5 million.

During Friday's Rose Garden ceremony, the president acknowledged those troubled days when both he and Sebelius were "bumped" and "bruised."

"Yes, we lost the first quarter of the open enrollment period with the problems with healthcare.gov and there were problems," the president said. Under Sebelius’s leadership "her team turned the corner, got it fixed, got the job done and the final score speaks for itself," he said. 

The website's recovery did not diminish Republican complaints. Sebelius testified before the Senate Finance Committee Thursday, and Republicans expressed frustration over her inability to provide more data about the people who have signed up for coverage through the marketplaces, or exchanges, and they were angry at the administration’s decision to postpone key implementation deadlines. Some Republicans, including Sen. Pat Roberts, from her home state of Kansas, have demanded she resign.

Comedians took aim as well, including Daily Show host Jon Stewart. In an Oct. 7 appearance – when the website was faltering, Stewart pulled a laptop out onto his desk and told Sebelius: "We're going to do a challenge. I’m going to try and download every movie ever made and you are going to try to sign up for Obamacare — and we’ll see which happens first."

Obama said Sebelius told him last month she intended to leave HHS after the open enrollment period ended March 31. In addition to her work on the health law, he praised her effort on a variety of other health care issues, including improving children's and maternal healthcare, expanding mental health care, reducing racial and ethnic disparities, and promoting women's health. Sebelius handled these and other challenges, "often without fanfare, often unacknowledged, that have been critical to the health and welfare of the American people," Obama said.

During her remarks at the Rose Garden ceremony, Sebelius thanked Obama for giving her "the opportunity of a lifetime" and noted that both critics and supporters of the law were benefitting from its provisions. "Throughout the legislative battles, the Supreme Court challenge, a contentious reelection and years of votes to turn back the clock, we are making progress," she said. "At the end of the day, health is personal. It's personal to all of us. Family illnesses and personal health challenges touch us to our core."

"The personal reward for me, at the end of the day, are the folks who approach me … at a meeting, or they pass me a note on a plane or hand me a phone with someone on the other end saying thank you," Sebelius said. "Their stories are so heartening, about finally feeling secure and knowing they can take care of themselves and their families."

Burwell, Obama's nominee to succeed Sebelius, helped the administration navigate the government shutdown in October. She served in the Clinton administration, worked for the Bill & Melinda Gates Foundation and is the former president of the Walmart Foundation.

Almost one year ago, the Senate voted 96-0 to confirm Burwell, which may help her chances for Senate confirmation to head HHS. In a tweet, Sen. John McCain, R-Ariz., said that Burwell "is an excellent choice to be the next #HHS Secretary." A recent change in Senate rules allows confirmation of presidential nominees with 51 votes, almost assuring that Burwell be the next HHS secretary since Democrats control the chamber. Burwell, nonetheless, is sure to draw tough questions during her confirmation hearings where Republicans will be eager to point out what they view as flaws in the health law.

Republican reaction to Sebelius' departure was mixed. Some lawmakers said the secretary's task was difficult from the start while others welcomed her exit.

"Anybody put in charge of Obamacare would be set up to fail. Secretary Sebelius was asked to promote something unready, poorly structured, and unpopular," said Sen. Charles Grassley, R-Iowa. "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."

Senate Minority Leader Mitch McConnell, R-Ky., said, "Secretary Sebelius may be leaving, but the problems with this law and the impact it’s having on our constituents aren’t. Obamacare has to go, too."

But her service was applauded by Democrats. In a statement Thursday night, Sen. Jay Rockefeller, D-W.Va., said, "For the past five years, I have marveled at Secretary Sebelius's grace under pressure. She never backed down from the tremendous responsibilities of her position, which were of a magnitude no other cabinet secretary has ever had to face with regard to domestic policy. … Not once did she let attacks from both the left and the right deter her from the goal of bringing health care to millions of uninsured Americans, and working to improve the health of people across the nation."

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.