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WASHINGTON (Reuters) - U.S. Health and Human Services Secretary Kathleen Sebelius said on Tuesday that she talked to three healthcare companies about a private nonprofit group helping to implement healthcare reform, but she denied asking for donations.
In her first public comments on an issue Republicans have sought to portray as a scandal, Sebelius vigorously defended her efforts to rally private support for a summer outreach campaign to persuade uninsured Americans to sign up for subsidized health coverage through new online state insurance marketplaces.
Republicans in the House of Representatives have launched a probe of her fundraising efforts, while party members in both the House and Senate have asked for outside probes to determine whether the secretary was illegally trying to circumvent Congress or violated ethics rules by seeking funds from companies she regulates.
In testimony before the House Education and the Workplace Committee, President Barack Obama's top healthcare adviser said her actions were sanctioned by long-standing health law and match steps taken by her predecessors to promote new program roll-outs in the past, including Medicare drug benefits.
"I could legally solicit funds from anybody regulated by our office. I chose not to do that. But promoting a public-private partnership? You bet," Sebelius said.
Obama's Patient Protection and Affordable Care Act is expected to extend health coverage to well over 25 million uninsured Americans during the next decade through subsidized marketplaces and an expansion of the Medicaid program for the poor.
But as administration officials have raced to implement the law by January 1, Republicans have repeatedly blocked public money for the effort and now accuse Sebelius of seeking private support for implementation in an attempt to circumvent them.
The Department of Health and Human Services has said that since March, Sebelius phoned the nonprofit Robert Wood Johnson Foundation and tax adviser H&R Block to seek financial assistance for Enroll America, which will serve as a private sector flagship for a campaign coordinated with outreach efforts by states and the federal government.
"Those are the only two conversations I've had about contributing resources," she told lawmakers.
Neither the foundation nor H&R Block is regulated by HHS.
But Sebelius disclosed on Tuesday that she also phoned medical products maker Johnson & Johnson, Catholic health system Ascension Health and private healthcare system Kaiser Permanente to talk about Enroll America. All three are regulated by HHS, but the secretary said she asked none for money.
Johnson & Johnson spokesman Ernie Knewitz said Sebelius talked to the company in April and that it has made no contribution to Enroll America. Ascension Health and Kaiser Permanente had no immediate comment.
Representative Tom Price, a Georgia Republican, asked about media reports that she solicited funds from the healthcare industry.
"No, sir. That is not true," she replied.
Representative Trey Gowdy, a South Carolina Republican, wanted to know what she would say if healthcare executives felt pressured to contribute money: "Your response would be what? That they're just too easily pressured or that they misunderstood the conversation?"
"I can't answer what they felt," Sebelius said. "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 tense questioning, Gowdy pressed Sebelius to identify who in the administration she consulted in planning the fundraising phone calls: "I'm looking for a name. Can I get a name? I'm looking for a name and you said ‘we'. Who's we? Did you ever discuss it with anyone at the White House?" he asked.
"No, sir," she replied.
Separately, Senator Orrin Hatch, top Republican on the Senate Finance Committee, which oversees healthcare, said Sebelius had effectively admitted pressuring companies she regulates. "That's bullying plain and simple and promotes a ‘pay to play' environment that undermines the public trust in government," Hatch said in a statement.
Enroll America, closely aligned with the Obama administration, has dozens of supporters from healthcare companies to special interest organizations such as AARP, the lobby group for older Americans.
It has been trying to raise money for an outreach effort expected to get under way late in June as government officials prepare to open the new marketplaces for enrollment on October 1.
Reform advocates say the effort is crucial to the success of the marketplaces, or exchanges, which are the lynchpin for the future of the entire reform package.
"It was always recognized from the day the president signed the bill that there would never be enough government funding and that there would not be enough opportunity if this is only a government-run program," Sebelius said on Tuesday.
Reporting by David Morgan; Editing by Michele Gershberg and Dan Grebler