Sebelius, looking back at ACA, says the country’s never ‘seen this kind of battle’

Kathleen Sebelius, who served as secretary of Health and Human Services under President Barack Obama, helped lead the administration's negotiations with Congress over the Affordable Care Act and implementation of the law.

Sebelius, who is also a member of the Kaiser Family Foundation board of directors, recently joined Julie Rovner, Kaiser Health News' chief Washington correspondent, for a special edition of the "What the Health?" podcast dedicated to the ACA's 10th anniversary. (Kaiser Health News is an editorially independent program of the foundation.)

Here is a condensed, edited text of that conversation. You can listen to the entire podcast here.

Rovner: How would you describe the U.S. health system's biggest problems prior to the passage of the ACA?

Sebelius: Well, I think the problems were that we had way too many people who had no insurance coverage at all. So they weren’t accessing preventive care. They didn’t have a regular doctor, often using emergency rooms or no health care at all and finding conditions and diseases at a very late stage. We also had lots of people who are struggling with cost. That was problematic. And I think, as a country, we spent very little focus on preventive health.

Rovner: Remembering back to 2009, what did you see as the most important thing the administration could do to move the debate forward?

Sebelius: First of all, there was a great interest in not repeating what people saw as the mistakes of the Clinton health plan, not holding this legislation closely at the White House and then springing it on Congress. We knew Congress had to own it. There were people in Congress who had been working on health issues for a very long time. They needed to be a part of the conversation.

And we also had a pretty good state template for improving access to coverage of individuals who didn’t have affordable employer-based coverage in Massachusetts. They had raised the Medicaid income eligibility to almost 300% of poverty and then created a large pool for individuals to buy individual coverage with tax help from the state but made sure that you didn’t have an adverse selection in a risk pool everybody was in.

President Obama didn’t want to start all over again from scratch, didn’t want to disrupt the whole market, but wanted to really fill the gap. And the gap was, what do you do for the lowest income workers? Expand Medicaid. And what do you do for people who are out in the marketplace buying their own coverage, who either need financial help or need insurance companies to play by a different set of rules because everybody in the individual market was medically underwritten? So healthy, well, folks were fine. Other people were either locked out entirely or at least the conditions that they wanted covered were locked out.

Rovner: So previous health proposals had been at least partly bipartisan. But there was a GOP blockade of this entire effort. Did you anticipate that? And how did you have to change your strategy to work around it?

Sebelius: I continued to believe first that we would be able to secure Republican votes in either the House or the Senate. That turned out to be not accurate.

So I kept thinking that once the bill was signed, we would then get Republican support. And the day that the president signed the bill, Republican attorneys general sued on constitutionality. I thought once the Supreme Court made a ruling on constitutionality, we would have broad-based support only to then have the election over the horizon. And that was a major debate in the reelection of President Obama.

I still continued to believe that once you crossed that threshold in November 2012, that then it would be settled. And here we are, days from the 10th anniversary and it’s still being litigated and challenged and fought about. So I don’t think anybody ever has seen this kind of battle over a major piece of legislation that has now been the law for 10 years and has never even been able to secure a technical correction for any of the language glitches. So I’m just totally baffled.

Rovner: Is there anything you wish you’d done differently during the congressional debate?

Sebelius: If we knew we only were going to have Democratic support, I think the bill could have been more progressive. Secondly, I think that President Obama was very convinced that one of the ways to get Republican support and get the country to buy in was assuring people that this would be entirely paid for. And there was a financial ceiling of pay-fors.

That really hindered some of the components of the bill. For instance, I think we would have had more generous subsidies with more money. We would have had a different look at who qualified for unaffordable insurance. It would have been a family picture, not just an individual. All of those decisions were made about money, not about policy.

Rovner: So we know that the bill nearly died at several stages along the way. Was there a moment that you almost gave up hope? And what was the moment where you actually knew it was going to happen?

Sebelius: Well, one of the most interesting rooms I was in during this entire tenure, 5½ years at HHS, was a sort of conference committee, although it was all Democrats, it was the leadership from the House and the leadership of the Senate. We had two very different bills, one that passed the House, one that passed the Senate. And, for about a six-day period, Democratic leadership from the House and the Senate sat in a room and went line by line through the bill with the president as the chief negotiator and rewrote what would have been a compromise bill. And I always found it really outrageous when people would suggest that President Obama didn’t know what was in the bill. I can guarantee you he read every line of both bills. So he knew everything that was in the bill.

We made a deal. We had a great bill and then lost the Massachusetts election [to replace the late Sen. Ted Kennedy] and lost the 60th senator [meaning Republicans had enough senators to stage a filibuster on any action]. At that point, things seemed pretty bleak.

Rovner: In retrospect, how sorry are you that the public option didn’t make it in because of the odd way the bill had to become law?

Sebelius: I think missing the public option was a huge blow, mostly because it would have been a cost lever. It would have forced the private companies to actually compete with what we knew would be a lower-administrative-cost, lower-priced public plan.

Rovner: So if passing a law was hard, implementing the law was harder still. Most people looking from the outside would guess that your worst day was when healthcare.gov crashed on takeoff in October 2013. Was that it or was there something we never even knew about?

Sebelius: Well, between Oct. 1 and Dec. 1 was a very, very, very long eight weeks. It seemed like eight years. The scariest part of that eight weeks was about a three-day period. The initial thought was there was just too much traffic on Day One and people couldn’t get through. By about Day Three it was clear that there were some very fundamental flaws throughout the system, not just at the gateway.

So there was kind of an emergency call for a team of, you know, top-notch tech analysts. And there was probably a three-day period where they were going through from start to finish making an assessment of whether the site could be saved or not, or we would have to start all over again. That was probably the most terrifying moment, because I kept thinking, how in the world would we go back to the president and say, Oh, by the way, we have to start over again?

The good news was they came back and said it can be fixed. It’s going to take eight weeks. We think you could go out in public and say by Dec. 1, we’ll have a functional website, not beautiful, but functional. And that was a pretty terrifying moment because I thought we don’t have two bites at this apple. If we’re wrong again, if it doesn’t work on Dec. 1, we are toast.

Rovner: Now it’s 10 years later, the law is more popular than ever. And yet there are still some big problems in the nation’s health care system, including levels of cost sharing, surprise bills, so that even people who do have insurance are worried about costs when accessing care. Why didn’t the Affordable Care Act fix everything?

Sebelius: Frankly, it probably would have been better to be a government takeover of health care. We got blamed for it. And yet we really didn’t do that. We ran most of this through the private system. So costs are still blossoming out of control. We’ve talked about how the public option would have been a lever for that, which we don’t have. Surprise billing wasn’t even an issue until investment bankers began buying specialty practices and figuring out, Oh, there’s a new way to make money.

And, I also think, often the Affordable Care Act is blamed for employers shifting massive costs onto their employees in employer-based health care plans, which weren’t really tampered with by the Affordable Care Act. That was always to be left alone. So we own all the bad.

Having said that, there are millions of people who have coverage today. Insurers cannot discriminate against people with preexisting health conditions. That’s very good news. I think there is much more universal agreement in the country that health care is a right not tied to your job or your geography. So there has been significant progress made.

Rovner: What are you most proud of having worked on this and having it part of your legacy?

Sebelius: Well, certainly I get stopped every day. I get stopped on airplanes and in grocery stores. And the stories are always very personal. People say to me, aren’t you that health lady? My husband lost his job and we had to buy coverage in the market. And then he could get surgery. And because of you, we could get that coverage. They are breathtaking and heartbreaking stories where people say my life is very different.

One of my favorites is there’s a great little diner on Massachusetts Street in Lawrence, Kansas, where I live. And Meg, who owns the diner, the Lady Bird Diner, said to me a couple of years ago, "You know, this is your diner." And I said, "Really cool. I’ll take it. What does that mean?" She said, "Well, I was a waitress. I always wanted to have my own place. My husband and I had enough cash set aside," but she said, "I have a preexisting health condition. He’s a carpenter. So he didn’t have insurance. I had to work in a different job so I could get insurance coverage. And," she said, "your bill, the Affordable Care Act, made it possible that I could open this business. And now I serve pie every day. And I’m just happy as a clam."

And I thought: Now that’s a very positive step forward. That’s a great legacy to have.