Politics & Policy

The Road to IPAB

If you love Medicaid, you’ll adore the new version of Medicare.

What Pres. Barack Obama’s budget speech last week lacked in details, it made up for in an obnoxious faith in the surpassing wisdom of unelected experts.

Why does Obama need specifics when he has the Independent Payment Advisory Board, or IPAB? If spending on health care is the biggest driver of government spending, then IPAB is Obama’s most important deficit-reduction initiative. It is a panel of 15 presidentially appointed experts. They will have more power over Medicare than the average member of Congress, whose only credential — embarrassingly enough — is being a duly elected representative of the people under the Constitution of the United States.

Obama has elevated Medicare, along with other New Deal and Great Society programs, to part of America’s holy writ. Yet he implicitly acknowledges that it is broken and bankrupting us. Otherwise, he wouldn’t be proposing a cap on Medicare’s growth that is at least as stringent as anything New Gingrich proposed in the 1990s, when he was by general acclamation declared an enemy of the sick and elderly.

We already have an arbitrary check on Medicare’s spending, and we already have a panel of experts to recommend changes to the program. The arbitrary check is the “sustainable growth rate,” and the panel is the Medicare Payment Advisory Commission. Congress has repeatedly deferred cuts under the former and ignored the recommendations of the latter. To this, Obama has an elegant solution: Bypass Congress.

Under Obamacare, IPAB is to hit a target for Medicare’s growth that significantly squeezes the program beginning in 2014 (in his budget speech, Obama said he wants to ratchet down the cap even further). Congress has limited options: It can pass the IPAB recommendations, substitute its own version of them, or by a three-fifths majority in the Senate vote to waive these requirements. If it does none of these things, the secretary of Health and Human Services automatically implements the IPAB plan. 

If this makes IPAB sound like a powerful body, it’s still too weak for the president. In the fact sheet released in conjunction with his budget speech, the White House says he wants to give IPAB “additional tools” and “additional enforcement mechanisms such as an automatic sequester.” All that’s missing is the power to launch kinetic military operations.

No one doubts that Congress is frustratingly fractious and fiscally incontinent. Surely, our public affairs would be conducted more efficiently if every key function of Congress were handed off to a board of experts. But at the cost of an incalculable diminution in democratic accountability. 

Friedrich Hayek warned of this temptation in his classic book The Road to Serfdom: “Parliaments come to be regarded as ineffective ‘talking shops,’ unable or incompetent to carry out the tasks for which they have been chosen. The conviction grows that if efficient planning is to be done, the direction must be taken ‘out of politics’ and placed in the hands of experts — permanent officials or independent autonomous bodies.”

Only Obama could give a speech touting such a body and think he’s made a ringing defense of what’s great about America. He is an IPAB kind of guy. William F. Buckley Jr. famously said he’d rather be governed by the first 2,000 names in the Boston phone book than the faculty of Harvard. Obama would take the Harvard faculty in a heartbeat. He’d dress it up with a clunky acronym, grant it vast bureaucratic power, and set it loose on the problems of the world.

The fact of the matter is that IPAB won’t make the notoriously inefficient Medicare program any more efficient. Through arbitrary reductions on payments to providers, it will simply reduce the supply of care. Even before the advent of a new, more powerful IPAB and a new, tougher limit on spending, Medicare’s chief actuary warned that Obamacare will drive providers out of the program. If you love Medicaid, you’ll adore the new IPAB version of Medicare.

It will be the experts’ gift to America’s seniors.

— Rich Lowry is editor of National Review. He can be reached via e-mail, comments.lowry@nationalreview.com. © 2011 by King Features Syndicate.


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