Sebelius Health Law Fundraising Probed by Republicans

Photographer: Jay Mallin/Bloomberg

Only 16 states agreed to build their own exchanges, leaving Health and Human Services Secretary Kathleen Sebelius’ agency responsible for building the marketplaces in 34. Close

Only 16 states agreed to build their own exchanges, leaving Health and Human Services... Read More

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Photographer: Jay Mallin/Bloomberg

Only 16 states agreed to build their own exchanges, leaving Health and Human Services Secretary Kathleen Sebelius’ agency responsible for building the marketplaces in 34.

The U.S. health secretary’s effort to raise money to promote the Affordable Care Act is drawing the attention of Republican lawmakers who want to know whether she solicited companies regulated by her agency.

Republicans on two House committees that supervise the Department of Health and Human Services wrote Secretary Kathleen Sebelius late yesterday for information about her fundraising. Leaders of the Energy and Commerce Committee also wrote 11 health insurers, including UnitedHealth Group Inc. (UNH) and Aetna Inc. (AET), asking if they were solicited by Sebelius or her employees.

The health agency said last week that Sebelius had been calling advocacy groups, doctors, churches and “companies not regulated by HHS” since March, asking for contributions to an independent nonprofit group promoting the health law. The agency finds itself doing more work than expected as more than a dozen states refuse to cooperate and Congress rejects the president’s requests for more government money.

“It is clear that your department is scrambling to find funding from sources the law did not authorize,” Representative David L. Camp, a Michigan Republican who is chairman of the House Ways and Means Committee, wrote Sebelius.

Jason Young, a spokesman for HHS, said Sebelius’s fundraising efforts are supported by a provision of the Public Health Service Act, and she has stopped short of directly soliciting companies her department regulates.

Agency History

“This provision has been in place since 1976, and has applied to and has been used by previous secretaries, including around the launches of Medicare Part D and the Children’s Health Insurance Program,” Young said in an e-mail. “It was even cited as part of President Reagan’s establishment of the President’s Council on Physical Fitness.”

In a Senate floor speech yesterday, Senator Lamar Alexander, a Republican from Tennessee, compared Sebelius’s fundraising with the Iran-Contra weapons scandal under former President Ronald Reagan. Alexander questioned the legal basis for the fundraising in a letter and asked for records related to the calls.

“Fundraising in your official capacity as secretary for a specific organization that exists to promote the president’s health-care law and is controlled significantly by entities that have a vested interest in the law’s implementation is a far cry from what Congress intended” in the Public Health Service Act, he wrote.

Expanding Coverage

Medicare Part D is the prescription drug benefit established in 2003 under President George W. Bush for the government’s insurance plan for the elderly and disabled. The Children’s Health Insurance Program was created in the 1990s, to serve children of low-income families who weren’t eligible for Medicaid, the state-federal program for the poor.

The Affordable Care Act would expand health coverage to about 27 million uninsured people by 2017 through a series of state-run health exchanges where residents would purchase subsidized insurance plans and through an expansion of Medicaid programs.

Sixteen states agreed to build exchanges, leaving Sebelius’ agency responsible for creating the marketplaces in 34. In addition, the federal government must find money to promote the law to ensure people use the exchanges starting Oct. 1 in large enough numbers to sufficiently spread the risks for insurers selling to them.

Shifting Money

Congress has rejected the administration’s requests for more than the $1 billion the law provided for the work. Lawmakers didn’t include $949 million the administration requested in a spending bill for the government for the duration of fiscal 2013. Instead, Sebelius has shifted at least $566 million from other parts of her department’s budget and plans to take about $454 million from an account established by the health law to fund preventive health efforts, according to the American Public Health Association.

The money Sebelius has been soliciting would go to Enroll America. Companies including Kaiser Permanente, the Oakland, California-based nonprofit insurer and hospital chain, and Israeli drugmaker Teva Pharmaceutical Industries Ltd. joined with the consumer advocacy group Families USA to create Enroll America in 2011 to promote the health law. The group has been led since the start of the year by a former White House aide, Anne Filipic.

Filipic last week described the effort to promote the law as a partnership among government, for-profit companies and nonprofit organizations.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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