CHICAGO (Reuters) - U.S. President-elect Barack Obama turns his focus on Thursday to healthcare -- a key element of his election campaign -- when he nominates former Senate leader Tom Daschle as secretary of Health and Human Services.

In a news conference at 1000 CST (1600 GMT), Obama is expected to announce that Daschle, a Democrat from South Dakota, would take the lead on the massive effort to revamp the American healthcare system.

Obama, who beat Republican John McCain in the Nov. 4 presidential election in part because of his promises to provide affordable healthcare to all Americans, will give some specifics about his plans to change the system after taking office on Jan. 20.

But looming behind him is the scandal involving Illinois Gov. Rod Blagojevich, who was arrested on Tuesday and charged with attempting to sell Obama's recently vacated U.S. Senate seat.

Obama has called on Blagojevich to resign and has sought to distance himself from the disgraced governor. But he will likely face questions at the news conference about his relationship with the Democratic governor and how much he knew about his alleged influence-peddling.

He might also have to answer questions about how he plans to fund his $50 billion to $65 billion healthcare reform effort. Obama had said he would pay for it by rolling back Bush administration tax cuts for Americans earning

more than $250,000 a year and keeping the estate tax at its 2009 level.

But with the current economic crisis, there are questions about whether he would be able to carry out that plan.

This month, Obama's transition team is kick-starting the process of healthcare reform with a series of meetings across the country to discuss what ordinary Americans thought were the biggest problems with the system.

"Providing quality affordable health care for all Americans is one of my top priorities for this country because our long-term fiscal prospects will have a hard time improving as long as sky-rocketing health care costs are holding us all down," Obama said in a statement earlier this month.

In addition, Obama's Internet site (www.change.gov) asks people to submit ideas for changing America's costly and inefficient healthcare system, which leaves tens of millions uninsured.

Daschle has said he would like to involve the states in the changes in healthcare and has warned against getting bogged down in details.

Nearly 46 million Americans have no health insurance, and Americans are more likely to die of common diseases than people living in many other developed countries.

U.S. healthcare costs now account for about 16 percent of U.S. gross domestic product -- or $2.3 trillion -- a proportion projected to grow to 20 percent or $4 trillion by 2015.

(Editing by Eric Walsh)