President Obama often likes to absolve himself from the need to propose significant entitlement reform (particularly Medicare reform) by invoking the “reforms” already included in Obamacare. Specifically, he is referring to the Independent Payment Advisory Board (IPAB), a 15-member panel of appointed “experts,” who will be given extraordinary powers in order to keep costs below a target level. I wrote about this previously:
Under the law, there are only a few ways for the board’s cost-control recommendations to be amended. Congress can pass alternative measures that reduce Medicare spending by at least as much as the IPAB proposal; or, three-fifths of the Senate can vote to override the IPAB proposal entirely. If Congress fails to pass its own version by a certain deadline and the Senate doesn’t waive the requirement with a three-fifths vote, the board’s recommendations automatically become law.
Created by the ACA, IPAB has been high- lighted by economists and health policy experts as a key contributor to Medicare’s long term solvency. Under current law, if the projected Medicare per capita growth rate exceeds a predetermined target growth rate, IPAB recommends to the Congress policies to reduce the rate of Medicare growth to meet the target. IPAB recommendations are prohibited from increasing beneficiary premiums or cost- sharing, or restricting benefits. To further moderate the rate of Medicare growth, this proposal would lower the target rate from the GDP per capita growth rate plus 1 percent to plus 0.5 percent. Additionally, the proposal would give IPAB additional tools like the ability to consider value-based benefit design and enforcement mechanisms such as an automatic sequester as a backstop for IPAB, the Congress, and the Secretary of HHS. This proposal would act as a backstop to the other proposed reforms.
As the White House notes, “IPAB recommendations are prohibited from increasing beneficiary premiums or cost-sharing, or restricting benefits.” How then, will IPAB control costs? Well, through “value-based benefit design” and “enforcement mechanisms”! Terms like these are, of course, the inevitable result of a massive bureaucratic approach to health care. What they mean is this: stripped of all other cost-cutting mechanisms, IPAB will be forced to ration care. And there’s very little you, or even Congress, can do to stop it. For the second time this year, Obama has doubled down on this approach.