There are few things Congress agrees on these days, but one issue that has bipartisan support is ending the Independent Payment Advisory Board. Created by the Affordable Care Act, its alleged purpose is to reduce Medicare spending. On Oct. 4, the House Ways and Means Committee advanced a bill, the “Protecting Seniors Access to Medicare Act of 2017,” which would repeal IPAB, by a vote of 24-13.
This bipartisan bill was introduced by Reps. Phil Roe, R-Tenn., and Raul Ruiz, D-Calif., and is cosponsored by 267 House Democrats and Republicans. The House should move to quickly pass the bill and send it to the Senate.
Opposition to IPAB includes its unchecked autonomy and power. IPAB’s 15-member unelected board, appointed by the president, would submit a proposal to reduce Medicare spending if it should rise above a targeted growth rate established by the Centers for Medicare and Medicaid Services Actuary. If the board does not submit a proposal, then the secretary of Health and Human Services must submit one. Congress can stop an IPAB (or the secretary’s) recommendation only if both chambers agree to a plan that cuts the same amount and is signed into law within a very restrictive legislative time frame. If not, IPAB’s recommendation becomes law.
While it is forbidden under Obamacare from making a proposal that would “ration healthcare, raise revenues or Medicare premiums,” IPAB can cut payments to doctors, hospitals, and other providers. In other words, IPAB is price controls on steroids. Reduced payment rates will encourage providers to treat fewer Medicare beneficiaries, raise prices for consumers to offset provider losses from seeing Medicare patients, or both. That leads to rationing.
IPAB’s power also goes beyond controlling Medicare outlays. ACA requires IPAB to submit recommendations to Congress and the president on how to slow the growth in national healthcare expenditures. Obamacare gives the HHS secretary or other federal agencies the power to implement their proposals administratively.
Some believe IPAB is similar to the Base Realignment and Closure Commission. It is not. BRAC was passed in 1988 and is one of the most important legacies of President Ronald Reagan’s Grace Commission, which recommended an independent commission to study base realignment and closure as a way of getting around congressional anxiety over military bases closures in home districts.
BRAC’s work does not start until the secretary of defense puts together a list of recommended closures and realignment of military bases, which is given to congressional defense committees and an independent commission. The BRAC commission reviews and analyzes the list, receives public comment, and then submits to the president its recommendations of base closures. The president reviews the report and can accept or modify the recommendations. Then the president can submit the BRAC recommendations to Congress, or not. Congress can take a vote to accept or reject the BRAC recommendations as a whole.
As for relying on a Congressional Budget Office score, IPAB has no fiscal track record since it has never been implemented. Plus, CBO has also been consistently wrong about Obamacare’s enrollment numbers and costs. Congress should not be deterred about passing IPAB repeal. Devolved congressional powers to the executive branch must be rolled back, and repealing IPAB is one facet in that process.
The answer to controlling Medicare costs is to introduce more free market forces to encourage choice and competition, not price controls and rationing. For example, proposed reforms by Speaker of the House Paul Ryan, R-Wis., which include giving future generations the ability to choose competing private plans and help seniors pay for their premiums, are a good place to start.
Elizabeth Wright is a contributor to the Washington Examiner's Beltway Confidential blog. She is director of health and science policy for Citizens Against Government Waste.
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