IPAB: A New Era Of Healthcare Unaccountability

Christina Sandefur Goldwater Institute
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When she came under fire for the botched rollout of Healthcare.gov, the Affordable Care Act’s health insurance exchange website, Health and Human Services Secretary Kathleen Sebelius remarked, “The people calling for my resignation are the people I don’t work for.” She was right.

One of the most striking aspects of the ACA is its unprecedented lack of oversight and accountability. While the president demands accountability to fix the recent scandals at the Department of Veterans Affairs, his health insurance law has created the most extreme example of unchecked administrative power in American history.

On June 10th, the Ninth Circuit Court of Appeals will hear arguments in Coons v. Lew, the legal challenge to the Affordable Care Act’s powerful health care rationing agency, the Independent Payment Advisory Board (IPAB). As its name boasts, IPAB is an “independent” (read: unaccountable) super-legislature tasked with setting Medicare prices. But it is far from advisory. The board’s actions – euphemistically called “proposals” – automatically become law without Congress’s vote, the president’s signature, the public’s input or even the courts’ review.

Unconstrained by traditional checks and balances and unaccountable to the people, those appointed to IPAB are free to impose their own preferences on both public and private health care. The ACA’s vague directives empower IPAB members to take whatever actions they consider to be “related to the Medicare program,” presumably including establishing price controls, levying taxes and even rationing health care.

Supporters of the law maintain that IPAB is explicitly prohibited from rationing care, but nowhere in its 2,000 pages does the ACA define what “rationing” means. Is it rationing, for example, for IPAB to set the price of a medical procedure so low that no doctor will provide it? And what’s to stop IPAB from rationing care? Since its actions are immune from judicial review, these purported limits on IPAB’s power are unenforceable and meaningless.

Currently, exercising this unfettered discretion is the prerogative of a single administrator. The Act says that if IPAB fails to meet its cost targets, or if the president fails to name any members to serve on the Board (so far, all 15 slots are open), the HHS Secretary alone wields this vast power. And remember, she doesn’t work for you.

A silver lining in the VA tragedy is that both the president and Congress are finally calling for reform. Bills are being introduced to impose oversight and accountability on the agency while providing more autonomy for patients seeking care. In contrast, when IPAB makes unpopular, incompetent or harmful decisions, it will be insulated from such scrutiny. The ACA prohibits Congress from disturbing IPAB’s diktats unless its plan matches IPAB’s spending reductions. And outside of a short window in 2017, Congress is forbidden from repealing IPAB.

Proponents say IPAB insulates lawmakers from political pressures that burden their difficult decisions. But public pressure was expected – indeed, desired – by the Constitution’s authors, who knew all too well the costs of unchecked power. Legislators are responsible to their constituents and checked by the other branches of government. Bureaucrats face no such accountability.

Wielding the powers of every branch of government but accountable to none, IPAB is the most extreme consolidation of government power in American history. If the Constitution’s separation-of-powers principles are not respected, Americans can expect stories like the VA scandal to become commonplace.

Christina Sandefur is an attorney at the Goldwater Institute. The Institute’s lawsuit against the Independent Payment Advisory Board, Coons v. Lew, will go before the Ninth Circuit June 10.