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:
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.