Obamacare Might Not Be Dead, But IPAB Should Be


Full-scale repeal of Obamacare has failed, at least for now. But there are still components of the law that can, and should, be rolled back immediately. The Independent Payment Advisory Board is a prime example.

Obamacare created the board of 15 unelected, presidentially-appointed bureaucrats to keep Medicare’s costs under control. If entitlement spending growth surpasses a specific target (currently, aggregate GDP growth plus 1 percent) the board must recommend Medicare cuts.

These “recommendations” will almost certainly be enacted. The only way to avoid IPAB’s proposed cuts is for Congress to quickly devise and pass an alternative set of cuts by a two-thirds majority. In today’s political climate, it’d be tough to get 67 senators to agree on the day of the week. It’s highly unlikely they’d agree on Medicare cuts.

IPAB isn’t permitted to directly cut benefits. But it can reduce payments to providers, thereby making it financially impossible for doctors to provide certain treatments. If IPAB decides to slash reimbursements for certain cancer drugs or surgical procedures, beneficiaries will quickly lose access to those services and treatments.

In effect, Obamacare gave an unelected board the power to ration healthcare for seniors.

President Trump hasn’t appointed anyone to IPAB; President Barack Obama did not do so either. Thankfully, the board hasn’t been needed, because Medicare’s spending has grown more slowly than the target rate since IPAB’s creation. But spending will undoubtedly accelerate in the coming years as more people enroll in Medicare. So, the only way to stave off unilateral changes to Medicare is to scrap IPAB.

There’s broad support for abolishing IPAB on both sides of the aisle. Reps. Phil Roe, R-Tenn., and Paul Ruiz, D-Calif., and Sens. John Cornyn, R-Texas, and Ron Wyden, D-Ore., have put forward bills repealing the program.

Lawmakers should waste little time in ending this misguided program. So long as IPAB remains the law of the land, the threat of healthcare rationing will loom large for seniors on Medicare. The entitlement needs reforms — but those changes should come from Congress, not unaccountable bureaucrats.

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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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