Politics & Policy

Repeal IPAB

The best way for congressional Republicans to make the case for the Paul Ryan budget is to contrast it with the Democrats’ plan. To the extent the Democrats have one, it centers on empowering the so-called Independent Payment Advisory Board (IPAB), a panel of 15 bureaucrats, to make cuts to Medicare.

This is a constitutionally suspect scheme that will make Medicare worse for seniors while leaving in place all the program’s perverse incentives, which distort the rest of the health-care market. Republicans should vote to kill IPAB.

The board was established by Obamacare — it’s one of the cost-saving measures that, when combined with various mathematical shenanigans, forced the Congressional Budget Office to score the law far more favorably than it deserved. Despite the fact that, in the long run, IPAB’s savings will at best do nothing more than offset some of his health-care law’s spending, Obama is now touting IPAB as evidence that he’s serious about the budget. He has even proposed strengthening it.

True, IPAB will save money, if taken in isolation from the rest of Obamacare. Assuming Medicare doesn’t magically stop growing on its own, in 2014 IPAB will “recommend” cuts amounting to 0.5 percent of the program’s spending, and each year that number will rise until it hits 1.5 percent. But IPAB is one of the clumsiest, most bureaucratic ways of achieving this goal imaginable.

Rather than giving seniors a subsidy and letting them choose their own plans, as Paul Ryan’s reforms would do, IPAB will simply reduce the rates that Medicare pays for medical procedures and drugs. Expenditures deemed inefficient (e.g. through “comparative-effectiveness research”) might be denied altogether. Liberals claim IPAB cannot “ration,” relying on the fact that Obamacare explicitly denies it the power to do this — but both the law itself and the liberals’ citing of it are completely disingenuous. Cutting payments would have the exact same effect.

Surveys indicate that many doctors already limit the number of Medicare patients they see, because payment rates are low. Further cuts will make it difficult for some seniors to find a Medicare doctor at all. And this is not to mention the deep cuts targeted at specific procedures that have been deemed unworthy, reductions that amount to rationing in its most basic form.

Further, IPAB has serious constitutional problems. When the board issues its “recommendations,” Congress can pass a different plan (as long as it cuts the required amount of spending); alternatively, the Senate can override the board with a three-fifths vote. If that fails, however, the recommendations become law without the involvement of elected officials. In addition, the law forbids judicial review of the recommendations and purports to dictate the process by which a future Congress can discontinue the board.

In short, IPAB is a monstrosity. Whatever misgivings the public has about Ryan’s Medicare reforms, it will surely recoil from IPAB, if it learns about it. To that end, House Republicans should vote for Tennessee representative Phil Roe’s bill to repeal it. They would no doubt get some support from Democrats (seven are co-sponsors), making it a bipartisan rebuke of President Obama’s favorite Medicare reform.

Some Republicans worry that giving Democrats an opportunity to vote against IPAB will provide some Blue Dog Democrats with political cover. That no doubt is true. But the increased attention on IPAB would be worth it. In the next election, the imperative for Republicans isn’t to pick off a few more vulnerable Democrats, but to mount the most vigorous possible defense of their own Medicare vote. The first step is repealing IPAB.


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