How Important is Obama’s IPAB?

Along with a whole host of damaging regulations, tax increases and government mandates, President Obama’s massive takeover of the healthcare industry created the Independent Payment Advisory Board (IPAB). The sole purpose of this board is “to come up with ways to cut Medicare spending if it grows too fast.” Fifteen members, selected by President Obama (we can all assume how nonpartisan they will be) will include:

“physicians and other health professionals, experts in the area of pharmaco-economics or prescription drug benefit programs, employers, third-party payers, individuals skilled in the conduct and interpretation of biomedical, health services, and health economics research and expertise in outcomes and effectiveness research and technology assessment. Such membership shall also include representatives of consumers and the elderly.”

Last week, the House Budget Committee held a hearing on whether the IPAB is necessary. Secretary of Health and Human Services Kathleen Sebelius claimed that “IPAB is irrelevant” if Congress does its job.

So, according to Sebelius, IPAB is supposed to be the backup plan if Congress cannot contain Medicare spending. This is a convenient way to blame Congressman for Medicare spending.  However, by having this board in place, it creates an easy reason for Congress to dodge Medicare reforms.

This is the way Washington works – difficult and necessary decisions are punted to someone else, allowing politicians to keep their hands clean. This board removes the incentive for Congress to reform Medicare, and such reform is necessary to save the program. Members of Congress have already learned what kind of political heat will follow if they suggest reforming entitlements. Knowing they could be freed from that burden sounds pretty tantalizing. According to Congressman Paul Ryan (R-WI):

“It’s political cover for politicians not to have to make the decisions to cut reimbursements for providers. It’s like the base closing commission. We didn’t make the decision, somebody else did. And that, unfortunately, is where this whole thing is headed.”

In this capacity, the IPAB is not “irrelevant.”

Congressman Ryan, author of House Republicans’ FY 2012 budget, got the chance to question Sebelius during the hearing. He spoke about the differences in the Ryan budget Medicare reform proponent and the IPAB. For one, the IPAB gives a board of 15 unelected bureaucrats unilateral power to cut spending within Medicare.

And how do they achieve that? The IPAB’s only real authority is to cut reimbursements to Medicare providers. As a result, the cost for doctors to treat Medicare recipients can only go up. When this occurs, it’s likely that doctors will severely limit how many Medicare patients they treat. In what reality does someone perceive doctors simply accepting higher costs for treating seniors? According to Congressman Ryan:

“In [last week’s] hearing, Secretary Sebelius confirmed that Medicare’s status quo is unsustainable – and provided clarity on the choice of two futures for this critical health security program. The American people were able to learn more about the board of 15 unelected bureaucrats, established by the President’s health care law, to impose price controls that would restrict access for seniors.  We don’t think we should invest unprecedented control over Medicare decisions into the hands of 15 unaccountable bureaucrats in Washington.  Patients and their doctors must be the nucleus of health care decisions. Reforms that ensure choice and competition will bring down costs so Medicare can deliver high quality care for America’s seniors. When it comes to Medicare, our approach is to give seniors the power to deny business to inefficient providers. The President’s health care law gives government the power to deny care to seniors.”

Sebelius was unable to adequately defend the IPAB, which is why she resorted to downplaying its importance. This comes after President Obama’s April budget do-over speech in which he wanted to strengthen the IPAB and give it even more power.

Bad news for the President, the IPAB is overwhelmingly unpopular. It is universally opposed by Republicans and even a growing number of Democrats believe the provision was a mistake. In fact, Congresswoman Allyson Schwartz (D-PA) testified against the IPAB during the hearing, saying:

“IPAB brings unpredictability and uncertainty to providers and has the potential for stifling innovation and collaboration.”

Other Democrats have pointed out the fact that once the IPAB makes a decision about payment cuts, Congress can only overrule them with a supermajority vote, something that is very difficult.

270 health care groups have even signed a letter to repeal the IPAB. More than half of those groups originally supported Obamacare. The irony is the IPAB is a crucial element of Obamacare, and its creation was essential to the budget gimmickry that aided the takeover.

It’s clear that this part of Obamacare has become as contentious as the individual mandate, and further gives proof to the fact that this massive takeover bill failed to inform the American people and Congress as to the ramifications of its passage.

Nancy Pelosi said that “we have to pass the bill so you can find out what is in it.” Since Americans found out what is in the bill, they continue to support its repeal. Every week, Rasmussen surveys Americans and every week except one in the past 70 weeks has shown over 50% support for repeal.

Congress passed a bill that it did not fully understand and gave the power to “reform” Medicare to a board of unelected bureaucrats. Not only does it “kick the can” on entitlement spending, it puts the lives millions of seniors into the hands of just 15 people.

Is that what seniors deserve?

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