Tomorrow, the Energy and Commerce Committee will mark up legislation to repeal Obamacare’s Independent Payment Advisory Board (IPAB). IPAB is a dangerous mechanism that puts the power to limit seniors’ treatment options and access to care in the hands of unelected bureaucrats, essentially ending Medicare as we know it.
Despite the enormity of IPAB’s power and its influence on Medicare beneficiaries, its members are not accountable to the American people, unlike Congress. IPAB will consist of 15 unelected bureaucrats who are tasked with finding savings within Medicare to meet a new, fixed target for spending growth in the program. IPAB members will be appointed by the President and approved by the Senate, and the board’s recommendations will be implemented by the Secretary of the Department of Health and Human Services (HHS) unless Congress enacts an alternative proposal that amounts to the same level of savings.
As Heritage health policy expert Bob Moffit explains: “[T]he board is prohibited by law from proposing real structural reforms. The only cuts it is allowed to make would be cutting providers’ reimbursements—including administrative costs and profit margins of Medicare Advantage plans.” The board will thus perpetuate the flawed, top-down model of micromanagement in Medicare that is both damaging to quality of care and ineffective at controlling costs.
This approach to restricting spending growth in Medicare will have serious repercussions for seniors. Arbitrary provider reimbursement cuts increase the gap between Medicare payment and private payment for services. As Moffit explains, this will “[fuel] even more Medicare cost-shifting to individuals and families in the private sector. Additional cuts could also accelerate physician exodus from the Medicare program.” A decline in physician participation would result in reduced access to care for seniors and intensify emergency room overcrowding.
IPAB will not succeed at preserving Medicare without doing serious damage to the quality of the program. Instead, Medicare spending should be controlled through structural changes that apply free-market principles to empower patients and improve value.
Reform that installs a premium support model in Medicare would provide beneficiaries with a defined government contribution toward a private health plan of their choice. This route would protect consumers and offer them options that best meet their needs, meanwhile reducing the backbreaking burden of Medicare’s unaffordable cost to taxpayers. To read Heritage’s full proposal to save Medicare, click here.
