Sebelius Says She Did Not Solicit Funds From Health Care Industry Officials for ACA

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By Sara Hansard  


Department of Health and Human Services Secretary Kathleen Sebelius told a congressional committee June 4 that she did not solicit funds from officials in the health care industry to support implementation of the Affordable Care Act.

She insisted her activities were legal and were similar to outreach activities conducted in previous administrations to promote Medicare Part D and the Children's Health Insurance Program (CHIP).

At a House Committee on Education and the Workforce hearing on the president's fiscal 2014 budget, Sebelius was questioned by Rep. Tom Price (R-Ga.) about whether she had solicited funds from companies in the health care industry to support Enroll America, a group set up to get uninsured people enrolled in health plans when the major reforms of ACA are implemented in 2014.

“Sir, I have had conversations with people all across this country, including insurance companies, pharmaceutical companies, and others, using the statutory authority that is clearly given to the secretary of health in the Public Health Service Act, and has been used by my predecessors, Republican and Democratic, for every health innovation that has gone on,” Sebelius said. That was the same defense HHS made May 24 in response to investigations by congressional Republicans of her efforts to raise funds to implement ACA (102 HCDR, 5/28/13).

Former HHS secretaries Tommy Thompson and Mike Leavitt, both of whom served under President George W. Bush, “made public-private partnership outreach efforts to make sure Medicare Part D enrollment went well,” Sebelius said.

Two Calls to Raise Funds for Enroll America

“I have made two calls involving funding [for Enroll America], to [the] Robert Wood Johnson [Foundation (RWJF)] and H&R Block [accounting firm], neither of whom are under the regulatory authority of our office,” Sebelius said. She added that “the Public Health Service Act does not limit my authority to entities that are not regulated. I chose to do that.”

Several Republicans on the committee questioned Sebelius about her fundraising efforts. She said she called RWJF and H&R Block at the request of Enroll America President Anne Filipic. Sebelius said she talked to those two organizations “about how important this outreach effort was going to be, and the fact that--always--we anticipated having public-private partnerships on the ground, as has been done in CHIP enrollment, and Medicare Part D enrollment, and that they consider making contributions to our partner, Enroll America, which is a private, not-for-profit, non-partisan organization incorporated in 2012 under the umbrella of Families USA.”

Sebelius also said she made calls on behalf of Enroll America to pharmaceutical company Johnson & Johnson, Ascension Health Catholic hospital system, and health insurer Kaiser Permanente, all of which she acknowledged are regulated by HHS. She said she did not discuss fundraising for Enroll America with those organizations. Those calls were “to discuss the organization and suggest that the entities look at the organization,” she said.

Sebelius said Enroll America is similar to the Access to Benefits Coalition that promoted the Medicare Part D expansion of prescription drug benefits to Medicare beneficiaries enacted in the Bush administration. Thompson and Leavitt “avidly supported and traveled around with and suggested that they were very important public-private partners,” she said.

“We're also talking to businesses and pharmaceutical companies and hospitals and insurers and faith groups about using whatever resources they have to help fulfill what I consider to be [an] incredible opportunity for up to 30 million Americans to have affordable, available health [coverage].”

Legal Authority Cited

Sebelius cited authority under Section 1704 of the Public Health Service Act, enacted in 1976, that she said allows her to “legally solicit funds from anybody regulated by our office. I chose not to do that.” The HHS general counsel gave her a legal opinion to that effect, Sebelius said, and she said she would provide the opinion to the committee.

In answer to a question from Rep. Virginia Foxx (R-N.C.), Sebelius said she has “promoted and discussed outreach and education activities, not only around partnership with Enroll America, but with dozens of organizations for a very long time.”

Democrats on the committee defended the secretary's fundraising activities to promote ACA. Rep. Robert E. Andrews (D-N.J.) said that when Medicare Part D was implemented in 2004-2005, and the Access to Benefits Coalition conducted outreach on it, “I can't remember one word from anyone on either side of this committee or any other committee questioning the proprietary of that activity. I think your present activity is entirely proper and desirable.”

“I hope the accusation that you are using every legal resource at your disposal to get health care for Americans who need it is something you are doing,” Andrews said. “Matter of fact, if you're not doing that I would take you to task. I think you're doing the right thing.”

Hatch Says Comments Raise More Questions

Senate Finance Committee ranking member Orrin G. Hatch (R-Utah) issued a release June 4 saying Sebelius's remarks raise more questions. “That the secretary of Health and Human Services has not admitted to having pressured the very companies her agency regulates to get behind a non-government group in support of ObamaCare raises even more ethical and legal questions,” he said.

“The message being sent by the Obama administration is get behind this private group run by a former White House staffer, [Filipic,] and we'll give you more favorable treatment when it comes to regulations,” Hatch said. “That's bullying plain and simple and promotes a 'pay to play' environment that undermines the public trust in government.”

Hatch and other Republicans in Congress have called on the inspector general of HHS to investigate whether Sebelius's fundraising activities violated the law. In addition, congressional Republicans have asked the Government Accountability Office to investigate the matter (94 HCDR, 5/15/13).

California Preliminary Premiums Low

Turning to another topic, Sebelius also told the committee that preliminary premium rates submitted to the state-based marketplace Covered California show that “not only will they have a very competitive market throughout the state, where people will have lots of choices, but they're looking at the possibility of fairly significant rate decreases, up to 25 percent in some instances. And I think the highest rate increase that was originally filed was in the 4-to-5 percent level.” There were more health insurance bidders than expected, she said.

Covered California previewed preliminary premium rates May 23 (101 HCDR, 5/24/13).

Sebelius also defended ACA for building on the private insurance market, rather than moving to a single-payer system. “As we go through time, after full implementation, after we see how things are shaking out, there are likely to be fixes along the way. But it's impossible right now to deal with speculation … Medicare doesn't look the same today as it did when my father was here and voted for it in 1965. I'm sure the Affordable Care Act in 50 years will look very different, and there'll be changes along the way based on real experience in the marketplace.”


Information on the hearing is at

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