Obama planned to introduce Sebelius, the Democrat governor of Kansas, on Monday as his nominee to lead the Health and Human Services Department. The announcement would come before the president this week hosts lawmakers of both parties and representatives of major interest groups, from insurers to drug companies to consumers, at a White House summit on health care reform.
If confirmed by the Senate, Sebelius will play a leading role in Obama's ambitious effort to overhaul the health care system. But critical problems await her at the department, a vast bureaucracy that handles everything from Medicare to cancer research and to food safety.
The recession has taken its toll on Medicare, which provides health care for older people and the disabled. Plunging tax revenues have weakened the program's giant hospital fund, accelerating its projected insolvency to as early as 2016, only five years after the first baby boomers start signing up for services.
The Food and Drug Administration, meantime, is reeling from a seemingly endless series of safety lapses.
Sebelius, 60, is seen as a steady hand, an experienced public official who knows how to work across political lines and is unfazed by the complexities of health care and insurance issues. But she represents Obama's backup plan.
Originally, the president had counted on former Senate Majority Leader Tom Daschle to shepherd his health overhaul agenda through Congress.
Daschle would have worn two hats: health secretary and head of a White House health reform office. He was on a first-name basis with most senators, where health care legislation faces its stiffest test.
Sebelius knows some of the key players, but will have to establish a working relationship with others. Obama plans to name a different person for the White House health care job, raising the prospect of tensions between that office and the health secretary's.
Prospects for Sebelius' confirmation appear to be good, although she faces sharp criticism from abortion opponents who clashed with her in Kansas. Kansas' two senators, both Republicans, offered words of praise.
"Obviously we will have different viewpoints than the administration on many issues including health care reform, especially given the huge price tag," said Sens. Pat Roberts and Sam Brownback. But despite "real concerns" about Obama's direction, they said they looked forward to being able to pick up the phone and talk directly with Sebelius about health care issues.
The health insurance industry and consumer groups have also responded favorably to Sebelius, a former state insurance commissioner.
Obama made his opening move on a health care overhaul last week with his speech to Congress and a budget that set aside $634 billion over 10 years as a down payment on coverage for all — a goal that could ultimately cost $1 trillion or more. Now Congress will have to take the initiative.
Obama outlined some general policies, such as putting the country on a path to cover all its citizens and preserving the employer role in providing health insurance. His budget also showed it will take tough choices on spending cuts and tax increases to pay for health care.
But it will be up to Congress to turn those ideas into workable legislation. Democratic Sens. Max Baucus of Montana, the Finance Committee chairman, and Edward Kennedy of Massachusetts, who leads the Health, Education, Labor and Pensions Committee, say they want to present legislation by the summer.
Before health care legislation gets moving, Sebelius' attention may well be diverted by problems at the department. The administration will have to move quickly to name an FDA commissioner, a decision delayed by the difficulty in filling the health secretary's job. A trustees' report due in the spring is expected to highlight the worsening condition of Medicare's finances.
HHS has some 65,000 employees and a budget of more than $700 billion a year. It oversees Medicare benefits as well as Medicaid, the federal-state program serving the poor. It also is a responsible for the nation's front-line scientific defenses against disease and bioterrorism, as well as for research into causes and cures for cancer and other illnesses.
Medicare is considered a foundation of the nation's $2.4 trillion health care system because many private insurance plans use its policies as a guide. It suffers from runaway costs and questionable quality, problems that plague the rest of the system. Some experts estimate that 30 percent or more of Medicare spending may be for services that provide little or no value to patients.
Obama wants to expand coverage while slowing the rate of increase in costs. Administration officials say they are hoping that in the end that will lead to a more affordable system, without the coverage gaps that leave an estimated 48 million people uninsured.