As someone else said, Death panels is a small part of Palin's position on Health care, which is a small part of her political positions overall. Per WP:Summary and WP:UNDUE the subsection on Death panels should be vastly smaller.

Here's my proposed replacement:

Palin popularized the phrase "death panels" to encapsulate her opposition to a government-run health care system. While admitting that no proposed bills include the actual word pair,[1] she explained that the phrase "should not be taken literally".[2] "The fact is that any group of government bureaucrats that makes decisions affecting life or death is essentially a 'death panel'."[3]
  1. ^ Alan Goldberg & Katie Thomson (November 16, 2009). "Palin Wants to Play a Major Role in National Politics". ABC News. Retrieved 2010-02-12.
  2. ^ Rich Lowry & Robert Costa (November 7, 2009). "The Rogue, on the Record". National Review. Retrieved 2010-02-12.
  3. ^ Sarah Palin (September 8, 2009). "Written Testimony Submitted to the New York State Senate Aging Committee". Facebook. Retrieved 2010-02-12.

I think this is the right size and an adequate summary of her position. It also acknowledges the point that some editors have argued vociferously for - that the phrase does not actually appear in any proposed bills. It is a phrase that she invented or popularized to make her point. For most articles I would just go ahead and make the change. For this article, I think it is appropriate to seek consensus here before making any significant change.