The appointment will make her Obama's point person on healthcare reform. He also nominated Nancy-Ann DeParle, an expert on healthcare and regulatory issues, as counselor to the president and director of the White House Office for Health Reform.
"If we are going to help families, save businesses and improve the long-term economic health of our nation, we must realize that fixing what's wrong with our healthcare system is no longer just a moral imperative, but a fiscal imperative. Healthcare reform that reduces costs while expanding coverage is no longer just a dream we hope to achieve -- it's a necessity we have to achieve," Obama said.
Coinciding with the nominations, Obama released $155 million to fund 126 new health centers that will serve the poor and uninsured. The funds were part of the American Recovery and Reinvestment Act.
Sebelius is Obama's second choice for the post; former U.S. Sen. Tom Daschle, D-S.D., withdrew from consideration after revealing he had to pay more than $140,000 in back taxes and penalties to the Internal Revenue Service.
Sebelius, who was insurance commissioner in Kansas before becoming governor in 2003, doesn't have the congressional savvy Daschle would have taken to the post, USA Today noted.
Sen. Chuck Grassley, R-Iowa and the ranking member on the Senate Finance Committee, said he hoped Sebelius would bring "some Midwestern common sense" to the job and "bring different points of view together to tackle the challenges of health reform."