The White House needs to devise an Obamacare workaround that demonstrates to insurers that they're going to get paid, said Michael Leavitt, who served as Health and Human Services secretary under George W. Bush.
Leavitt told CNBC's "Squawk Box" on Monday that the Obama administration needs to change tactics and seek what he called a "60 percent solution" for the problems with the implementation of the new health-care law.
"There are two different fronts in this battle. The first is the political spin battle and the second is the logistical challenge of making this system work," he said. "I suspect right now the administration is losing both because they're dealing with a reality not spin."
Over the weekend, the White House said it met its self-imposed Saturday deadline of getting the federal health insurance exchange, HealthCare.gov, running smoothly for the "vast majority" of consumers on the front-end. But Monday that the so-called back-end systems, which are supposed to deliver consumer information to insurers, are still not fixed.
(Read more: 9 Senate Dems push for Obamacare work-around)
Most Americans are required to buy health coverage for next year or face tax penalties.
"You've got to find workarounds that will allow insurers the confidence that, in fact, they're going to get paid," Leavitt said, "or they're not going to do it. And they shouldn't be expected to do it."
Obama administration officials also need to simplify the enrollment process or "start pushing [more] deadlines out," he continued. "It's very clear people are not able to complete their transaction."
(Read more: New Obamacare enrollment delay: Small businesses)
The federal government needs to tell insurers that it will "stand behind this and we'll work this out as time goes on," said Leavitt, explaining that he used a similar fix when implementing the Medicare Part D prescription drug plan in 2006.
"We had some substantial technical problems in the first eight weeks of the system," Leavitt recalled. "We said to the pharmacy world, 'Give them their drugs. Give them a plan. We will guarantee that the payments are made.'"
He said he understands what the White House is going through, because the opposition to Medicare Part D then was similar to Obamacare now, but in reverse. Democrats were trying to shut things down and "we were feeling that pressure to find solutions."