A bill to repeal the Independent Payment Advisory Board has passed out of the House Ways and Means Committee with two votes from Democrats. This represents a real opportunity for bipartisan health reform in the right direction.
IPAB is known by its proponents as a Medicare "cost-cutting board" and by its opponents as a "rationing board." In reality, IPAB isn't anything yet – it's never been triggered into action, and no one has been appointed to it. But it remains on the books and therefore poses a threat to patients. It concentrates great power into the hands of a few unelected bureaucrats.
IPAB is supposed to consist of 15 appointees that serve six-year terms. The Affordable Care Act empowers IPAB to control per-capita spending in Medicare. IPAB sends its recommended Medicare budget to Congress, who has "oversight," meaning super majorities in both Houses can vote to stop the IPAB recommendations and replace them with equal or greater reductions … or else the IPAB budget automatically becomes law. After 2019, even this oversight is gone.
If IPAB reduces reimbursements for certain drugs, services, or treatments below the level that providers are willing to accept, there will be shortages. In this way, IPAB can impose a backdoor style of rationing by reducing the availability of critical health services for seniors. This is the epitome of government-run healthcare.
How imminent is this threat? IPAB is triggered when the Center for Medicare and Medicaid Services Office of the Actuary predicts the program will not hit a specified budget target. The actuaries are currently predicting IPAB will be triggered for the first time in 2021. It's critical lawmakers act before this happens.
Typically, conservatives would cheer the concept of reduced government spending, but IPAB is not the right way to do it. Fortunately, there is a better way – literally "A Better Way," the proposal from Speaker of the House Paul Ryan. Ryan has long championed reforms that would convert Medicare from a defined benefit to a defined contribution program, also known as premium support.
This means he would give seniors more control over their health dollars, allowing them to opt out of the traditional Medicare coverage for private coverage. Exposing the program to competition would hold down costs, and it would avoid the heavy hand of one-size-fits-all-style cuts that are inherent to the IPAB model.
After a long summer of very ugly health policy debates, let's hope that lawmakers can put petty partisanship aside and come together behind the right ideas. Of course, it's important to ensure that Medicare is sustainable and that costs are controlled. But individual seniors deserve a say in this process. It shouldn't be the role of an unaccountable government board.