By David Morgan
WASHINGTON, Oct 30 (Reuters) - The U.S. government's top health official said on Wednesday that private insurance companies, not President Barack Obama's signature healthcare law, are to blame for hundreds of thousands of people losing their coverage in the past few weeks.
Health and Human Services Secretary Kathleen Sebelius called the debut of the Affordable Care Act a "debacle" as she sought to assure skeptical lawmakers at a congressional hearing that the administration will fix technical flaws with the website.
HealthCare.gov, which opened for enrollment on Oct. 1, ironically went down over the course of the four-hour hearing.
But even as Sebelius acknowledged that the administration should have done more to ensure the portal would work smoothly, she blamed private insurers for a separate problem that has critics questioning the administration's honesty and competence.
When asked by Republican Representative Marsha Blackburn of Tennessee what she would say to Americans receiving cancellation notices because their policies are not compliant with the new law, Sebelius said: "Insurance companies cancel individual policies year in and year out."
Obama, who is due to speak about the healthcare reform known as Obamacare on Wednesday, and other administration officials have repeatedly promised that the 85 percent of Americans who already have health insurance would be able to keep their current plans.
But because the law requires insurers to offer a higher level of coverage, millions of Americans on individual coverage plans may see their policies canceled at the end of the year. Many face higher monthly payments for new plans that in some cases are beyond what they can afford.
Sebelius said private insurers were making "business decisions" by cancelling some members' coverage. The Affordable Care Act protected policies made before it was signed into law in 2010, she said.
She said those who lost coverage were victims of a market long known for discriminating against the sick and selling inadequate coverage - shortcomings that the law known as Obamacare was designed to fix. "People are on their own. They can be locked out, priced out, dumped out," she said.
Sebelius has drawn intense criticism from Republicans, who have called for her or other senior officials to resign. She seemed to survive the high-profile hearing without further damage.
"Hold me accountable for the debacle," Sebelius said. "I told the president that we were ready to go. Clearly I was wrong."
Obama has "complete confidence" in Sebelius, a White House spokesman said after the hearing.
Republicans have sought to derail the healthcare overhaul since Obama took office in 2009, culminating in a 16-day government shutdown earlier this month that has cost the U.S. economy an estimated $24 billion, according to Standard & Poor's ratings agency.
The website's woes and insurance plan terminations have given Republicans more ammunition.
"For those who lose the coverage they like, they may also be losing faith in their government," said Michigan Representative Fred Upton, the Republican who oversaw the hearing.
Opinion polls show that most Americans blame Republicans for that standoff, but Obamacare's woes have allowed them to shift the spotlight since the government reopened nearly two weeks ago.
Despite the drama, the public's assessment of Obamacare has shifted little over the past months. Gallup reported that 36 percent of Americans believe it will make healthcare in the United States better, while 44 percent think it will make things worse - essentially the same as surveys found in August and June.
U.S. presidents have a limited time to enact their agenda in the second term before they start losing influence as lawmakers start worrying about re-election.
The growing crisis surrounding Obama's signature legislative achievement could diminish his influence in Congress and threaten his ability to get other priorities like immigration reform signed into law in his remaining three years in office.
Obama's fellow Democrats question how he could have botched the debut of the most ambitious safety-net program since the 1960s.
"Our guys are frustrated by Obama's unforced errors," a Senate Democratic aide said. "How could the president not be ready for the rollout?"
Obama is due to talk about Obamacare at 4 p.m. (2000 GMT) in Boston, where in 2006 then-Governor Mitt Romney, the Republican presidential candidate last year, signed a state law that served as a model for Obama's health reforms.
Like Obamacare, that law had a rocky start as well - state officials delayed some aspects for several months and the White House says only 123 people signed up in the first month it was available. By the end of the year-long enrollment period, 36,000 had signed up.
The Obama administration likewise expects "a very small number" of people to sign up initially for coverage, Sebelius said. Overall, U.S. officials hope 7 million people sign up in the first year, and Americans who don't have health coverage by March 31 face a financial penalty.
The White House has declined to say how many Americans have enrolled so far. It also has asked states that run their own online healthcare exchanges to stop releasing their own data, according to Kevin Counihan, who runs Connecticut's health site.
"The White House is coordinating this stuff and trying to get states to report when they report - once a month," Counihan told reporters. "We'll do it every two weeks."
The parallels between Obamacare and "Romneycare" only go so far.
Romney's law enjoyed broad bipartisan support in Massachusetts, spurring the Republican to mount a presidential bid that fell short in 2008.
Romney downplayed his health law when he ran for president and argued that health reforms are best tackled at the state level. He reiterated that on Wednesday.
"Nothing has changed my view that a plan crafted to fit the unique circumstances of a single state should not be grafted onto the entire country," Romney said in a prepared statement.
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