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By David Morgan
WASHINGTON, May 7 (Reuters) - Sylvia Mathews Burwell, President Barack Obama's nominee for U.S. health secretary, will need all her skills as a crisis manager to steer the law known as Obamacare away from troubled waters during this year's congressional election campaign.
If confirmed by the Senate, her first task would be to get the upper hand on two issues that could spiral out of control for Democrats just before the November elections: rising health insurance costs and the potential for a new wave of policy cancellations for small businesses.
Both issues are grist for the Republican campaign mill to win control of the Senate by making the Nov. 4 poll a referendum on Obamacare. The last thing Democrats need is a new self-inflicted wound akin to the fiasco last year, when HealthCare.gov crashed on launch and millions of Americans found themselves with canceled health insurance policies.
Then there are the non-Obamacare challenges, with funding and staff shortages - and resulting low morale - at the Department of Health and Human Services agencies that regulate prescription drugs, combat disease outbreaks and oversee biomedical research.
Burwell's Senate confirmation process begins Thursday with a hearing before the Senate Health, Education, Labor and Pensions Committee. A second hearing before the Senate Finance Committee has not been set but Democrats hope for a final vote before the Memorial Day holiday on May 26.
Burwell's supporters say the 48-year-old White House budget director is perfect for the job: a seasoned problem-solver known for her ability to engage with people of diverse interests and produce acceptable decisions under difficult circumstances.
It was Burwell, as deputy chief of staff, who kept the Clinton White House focused on policy during the Monica Lewinsky scandal. For the past year, she has been watching Obamacare policy unfold as director of Obama's Office of Management and Budget, a job that has made her a powerful West Wing figure who has the president's trust.
"She walks in with a lot of capital," said John Podesta, a senior Obama adviser who worked with Burwell in the Clinton White House.
Last year's uproar over the Obamacare roll-out under outgoing Health and Human Services Secretary Kathleen Sebelius led to the biggest domestic policy debacle of the Obama presidency, and the scope for a new one is palpable.
Republicans are ready to pounce on evidence of higher health insurance premiums, due to emerge before November's elections. A large number of small-group health policies held by businesses and nonprofits also come up for renewal in the fall, and the small group market, with 17 million beneficiaries, is bigger than the individual market that spawned outrage last year.
"You won't see Sylvia dragged down into the partisan politics. It's just not where she is. She'll be focused like a laser on making things work smoothly," said Erskine Bowles, the former Clinton chief of staff who hired her in the late 1990s.
The federal government has relatively little authority over insurance markets, which are traditionally regulated by states.
To avoid problems, Burwell, a technocrat also known for her West Virginia drawl and mussed shoulder-length hair, will have to act quickly to persuade health insurers to restrain premium increases on Obamacare plans that would be sold in the federal marketplace next year. The deadline for plan submissions is June 27.
Burwell will also need to confront insurers and state regulators to avoid a damaging new surge of cancellations or big cost increases on small group plans, particularly in states that refuse to allow policy holders to renew plans that fail to comply with Obama's Patient Protection and Affordable Care Act.
"Her drive and determination to work with players (at HHS) and players at the White House, at Treasury, at OMB, to get a good result, that will be front and center," Podesta said. (Reporting by David Morgan; Editing by Jim Loney and Dan Grebler)