Even Obamacare’s Supporters Don’t Support the Rationing Board

The House Energy and Commerce Committee just scheduled hearings for next month on one of the most controversial components of ObamaCare — the Independent Payment Advisory Board (IPAB).

This 15-member, unelected Board will be charged with making recommendations for reducing Medicare spending if costs exceed a specified cap. Those recommendations will automatically become law unless Congress blocks them and offers equivalent spending cuts in their place.

Although IPAB was a central part of the president’s health care reform law, it’s only beginning to attract Congress’s attention. A bill introduced by Phil Roe, R-Tenn., that would scrap it has attracted 124 co-sponsors — both Republicans and Democrats.

They’re right to do so. IPAB amounts to little more than a rationing board that will neither lower health costs nor improve American health care.

Supporters of the Board claim that the text of ObamaCare actually prohibits it from rationing. But the panel will have the power to slash reimbursement rates for Medicare providers — including both physicians and drug firms.

So IPAB may not directly inform seniors that they can’t have access to a specific drug or a particular doctor. But by cutting the rates that drug companies or physicians are paid, the Board may artificially limit the supply of medications or doctors’ appointments.

For instance, a doctor may decide that lower reimbursement rates don’t offset the costs of seeing additional — or even existing — Medicare patients. As a result, seniors will face longer waits for appointments — or may be turned away altogether.

Similarly, arbitrarily cutting payments for prescription drugs in Medicare may result in fewer drugs being available. Seniors may be saddled with restrictive formularies that don’t offer access to the latest medications.

In both cases, IPAB may not directly ration care — but seniors will sure feel like it did.

Other countries have attempted to control costs by fiat before. Their experiences are not comforting.

The British National Health Service’s version of IPAB — known by the oh-so-inappropriate acronym NICE — denied access last month to a wide array of life-saving cancer drugs because it couldn’t “justify their cost.” Patients and their families, of course, may beg to differ.

Such rationing doesn’t even save money. In NICE’s first decade — 1999 to 2008 — health expenditures grew in the United Kingdom at an average rate of 7.2%, compared to 5.9% in the United States.

The nonpartisan Congressional Budget Office predicted in a March report that IPAB would have a similar impact on spending in this country — that is to say, none.

As the IPAB’s drawbacks have become clearer, some strange political bedfellows have lined up to call for the panel’s repeal. Led by Congresswoman Allyson Schwartz, D-Pa., seven House Democrats now find themselves sharing common cause with House Budget Chairman Paul Ryan, R-Wisc., and the entire Republican caucus on this issue.

In fact, IPAB has never been popular with some of the staunchest defenders of President Obama’s health care plan. More than 70 House Democrats called on President Obama and former Speaker Nancy Pelosi, D-Calif., to drop it during the debate before ObamaCare’s passage.

Leading liberal Congressman Pete Stark, D-Calif., has called IPAB a “dangerous provision” that “sets [Medicare] up for unsustainable cuts” and endangers patients’ health. And the National Committee to Preserve Social Security and Medicare — a prominent supporter of Obamacare — is now agitating for the Board’s repeal.

Many more foes of IPAB may be waiting in the wings. According to a recent POLITICO report, several Democrats have privately acknowledged that they would vote to scrap the panel if the matter came to a vote.

After next month’s hearings, they may have that chance.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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