Think Paul Ryan’s Medicare plan is unpopular? It’s actually faring quite well compared with the Democratic alternative, which is attracting bipartisan opposition and is increasingly the target of liberal advocacy groups. The Independent Payment Advisory Board (IPAB) — the 15-member panel of appointed “experts” created by the new health-care law with the aim of bringing Medicare costs under control — is President Obama’s official counter-proposal to the plan authored by House Budget Committee chairman Paul Ryan (R., Wis.). In an April 13 speech at George Washington University, Obama called for the strengthening of the IPAB and made it a central component of his “framework” to reduce the deficit.
Under last year’s health-care law, IPAB must go into effect in 2014. But a growing number of lawmakers and policy advocates are working to make sure it never does. Seven Democrats have now signed on as cosponsors to a Republican bill to repeal IPAB, many of them outspoken proponents of Obamacare — Rep. Allyson Schwartz (Pa.), for example, sent a letter to colleagues in April describing IPAB as a “flawed policy that will risk beneficiary access to care” and urging them to support legislation to end IPAB authored by Rep. Phil Roe (R., Tenn.)
“Congress is a representative body and must assume responsibility for legislating sound health care policy for Medicare beneficiaries, including those policies related to payment systems,” Schwartz wrote. “Abdicating this responsibility, whether to insurance companies or an unelected commission, would undermine our ability to represent the needs of the seniors and disabled in our communities.”
Democratic opposition to IPAB runs the gamut from staunch liberals such as Schwartz and Rep. Pete Stark (Calif.) to conservative Blue Dogs such as Rep. Larry Kissell (N.C.). Given the broad ideological support for his bill, Roe told National Review Online he is optimistic that repeal could pass both the House and the Senate, where Sen. John Cornyn (R., Texas) has drafted similar legislation.
Health-care advocacy groups are also signing up to the effort. Organizations including the National Committee to Preserve Social Security and Medicare (NCPSSM), which vocally supported the health-care bill despite deep concerns about IPAB, are revamping their opposition to the board by lobbying for IPAB’s demise. Max Richtman, executive vice president and acting CEO of NCPSSM, cites concerns about IPAB’s lack of accountability to Congress and, consequently, the American people.
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.
Richtman argues that the board would be able to impose “dramatic cuts” to Medicare, which would inevitably lead to restricted access to care for seniors. “It’s not going to address the problem in a way that doesn’t end up hurting the program,” he said. “The way the board is constituted is really not the right way to make those decisions.”
Under Obamacare, IPAB will be required to make steadily increasing cuts to Medicare over the next several years, reaching 1.5 percent of Medicare spending in 2018. This is why Republicans argue that the Ryan plan is actually the less severe option because it doesn’t go into effect until 2022 and makes no changes for current or near-retirees.
IPAB opponents also worry that by focusing exclusively on Medicare, the approach fails to adequately address rising overall health-care costs. In fact, this very issue was raised in a House Budget Committee hearing earlier this year. Richard Foster, Medicare’s chief actuary, testified that when it comes to tackling overall health-care costs, he saw potential in Paul Ryan’s “Roadmap” plan (similar to the House budget), but was “less confident” in the approach put forward under Obamacare.
A spokesman for Senator Cornyn tells NRO that letters from health-care groups have been pouring in to express support for his repeal legislation, echoing many of the same criticisms voiced by Republicans. A letter from the Healthcare Leadership Council (HLC) warns of potential rationing at the hands of the new board. “HLC is concerned about rationing of care as a result of IPAB actions,” the letter states. “The IPAB is barred from proposing modifications to Medicare that would result in changing the current system for beneficiaries, including beneficiary premiums, cost-sharing, or benefit design. Because of these restrictions, we believe the panel will ultimately have to limit patient access to medical care by reducing payments to providers and access to innovative therapies.”
The American Hospital Association echoed Richtman’s concerns when it comes to accountability: “America’s hospitals support the repeal of IPAB, because its existence permanently removes Congress from the decision-making process, and threatens the important dialogue between hospitals and their elected officials about how hospitals can continue to provide the highest quality care to their patients and communities.”
It’s uncertain when Roe’s bill may receive a vote in the House. Richtman was scheduled to testify next week at the Energy and Commerce Committee, but the hearing has been postponed. Roe told NRO he was still engaging with individual members in an effort to explain the issue and attract support. “The problem with this issue is that it’s a very hard issue to discuss in a one-minute sound bite,” he says. “But the more [Obama] talks about it, the more people sign up.”
Mounting opposition to IPAB could pose a problem for President Obama and the Democrats, leaving them with no concrete proposal — beyond the Pelosi “plan” — to preserve Medicare, which administration officials predict will run out of money in 2024. Richtman is still awaiting a proposal he can get behind. “I don’t have the answer,” he said. “But I know what we don’t like and I know why we don’t like it.”
— Andrew Stiles is a 2011 Franklin fellow.