One of the more pernicious legacies of Obamacare is the provision in the law for the establishment of an Independent Payment Advisory Board (IPAB). This layer of bureaucracy would empower 15 people to find ways to reduce the costs of Medicare. These decisions should not be made by just over a dozen minimally accountable appointees operating under the concept that technocrats know best. Congress needs to eliminate the power of the IPAB, before the board can take action.
The IPAB is the epitome of central planning and an abdication of congressional responsibility. According to the Centers for Medicare and Medicaid Services, “Medicare spending grew 4.5% to $646.2 billion in 2015,” which represents 20% of national health expenditures. Moving forward, Medicare costs are expected to continue to nearly double over the next decade. This rate of increase in spending is simply not sustainable. But potential reforms by the legislative branch are politically fraught.
That is one of the reasons why the IPAB was enshrined as part of Obamacare. Medicare exists to “provide health insurance to individuals 65 and older, and has been expanded over the years to include permanently disabled individuals under the age of 65.” Since it impacts the permanently disabled and seniors, reforming Medicare is one of the dozens of third rails in American politics. The IPAB takes advantage of the politically difficult choices that Medicare growth poses and provides a solution based on expediency and punting policy: leave this problem to a board of experts who never have to concern themselves with being elected or reelected to fix Medicare.
As the Mercatus Center explains, the IPAB would consist of 15 members who would be appointed by the president. Board members are “supposed to be nationally recognized experts in medical care, health insurance, or economics, and a majority of members on the board must not be physicians or professionally associated with other healthcare service providers, such as hospitals.” And their only salary can be that which they receive as IPAB board members. So the board will likely be a collection of left of center thinkers eager to try out their theories on Medicare with minimal responsibility or repercussions for making bad policy.
The IPAB would have significant powers. According to the American Enterprise Institute (AEI), the board can’t cut benefits or propose tax increases. It can recommend adjustments for payments for medical services. Congress would then consider these changes, approving them or modifying them. But if they do not, then the recommendations of the unelected panel are implemented. As AEI goes on to explain, “This is by far the most likely scenario.”
Congress will be disincentivized to take action since the board can always be blamed by Congress if the recommendations turn out to be ineffective in reforming Medicare. Hardly the arrangement the Founders had in mind when they drafted the Constitution.
The board “is supposed to be triggered once Medicare spending growth starts to exceed target levels determined by inflation and Gross Domestic Product (GDP).” Those numbers have not been reached yet, so the board has not been constituted. That is a positive development for those who like their constitutional republics to be accountable.
There is more good news. Obamacare set up a procedure by which the IPAB can be curtailed. According to the Congressional Research Service, a fast track process exists that allows for “discontinuing the automatic implementation process for the recommendations of the IPAB” if a resolution to do so is introduced by February 1, 2017, and has a specific title and text.
Sen. John Cornyn (R-Texas) has introduced S.J. Res. 17, a resolution to get this done in the Senate. Rep. Phil Roe (R-Tenn.) has taken similar action in the House with his resolution, H.J. Res. 51. S.J. Res. 17 has 20 cosponsors, and H.J. Res. 51 has 79 cosponsors. Sen. Cornyn and Rep. Roe have also introduced bills to end the IPAB. Those bill are S. 260, with 36 cosponsors, and H.R. 849 with 124 cosponsors.
These initiatives should be considered immediately by Congress.
The Senate is expected to take a fair amount of time dealing with health care reform now that the House has passed its legislation to replace Obamacare. In the interim, Congress can take action to dismantle a key part of Obamacare. That will not just send a message that Congress is serious about making reforms to Medicare, it will force Congress to deal with the tough questions about reforming it in a way that is answerable to the voters. That result is likely to be the most transparent and durable one to the challenges presented by Medicare reform.
Neil Siefring is vice president of Hilltop Advocacy, LLC, and a former Republican House staffer. Follow him on Twitter @NeilSiefring