Another controversial, but important, provision of the Affordable Care Act is under attack in Congress. Whether it survives will tell us a lot about whether lawmakers who talk about controlling the cost of health care actually mean it.
The provision in question is the Independent Payment Advisory Board, or IPAB. As the name suggests, it’s an independent commission, staffed by experts appointed by the president and Congress, that will make recommendations on how to alter Medicare payments in order to make the program less expensive.
The concept has been kicking around for a long time, on the theory that Congress shouldn’t be micromanaging Medicare reimbursement schemes. And something like the IPAB already exists. But the current version, called the Medicare Payment Advisory Commission, merely makes suggestions. Wonks like me live and die by its findings, but Congress is free to ignore them and frequently does. Under the Affordable Care Act, IPAB’s proposals to change Medicare will go into effect anytime the program's cost growth exceeds a certain threshold--unless Congress, at that time, overrides the recommendation (with a three-fifths vote) or takes some other type of action to reduce Medicare spending.
President Obama, who along with Senator Jay Rockefeller of West Virginia was the IPAB's chief proponent, proposed last week to strengthen commission. Specifically, he would like to see it intervene even when Medicare cost growth isn't quite so high and he would like to give it more authority to alter the Medicare program itself.
Republicans, meanwhile, have attacked the idea almost from the get-go, saying it would become an instrument of government-imposed rationing. It’s the IPAB that some conservative critics have likened to “death panels,” on the unfounded theory that it would cut off access to valuable, life-saving treatments. The House Republican budget calls explicitly for repealing the IPAB, even though it keeps other Medicare reforms within the Affordable Care Act.
But now some Democrats are joining the calls for repeal, as Jennifer Haberkorn first reported in Politico last week and as Robert Pear notes today in the New York Times. The IPAB was never particularly popular with more liberal House Democrats, who didn’t want to cede power over Medicare to another authority. But, at least for the moment, opposition is coming from a different part of the caucus. The Democrat leading the charge against the IPAB right now, for example, is Allyson Schwartz, a self-proclaimed New Democrat who represents the northeastern Philadelphia and the nearby suburbs.
Why does Schwartz want to get rid of IPAB? In a letter announcing her intentions, Schwartz said it was undemocratic to hand over that authority to a commission. And that's a legitimate (if, in my view, unpersuasive) argument. But a quick look at Schwartz's campaign finance history, from OpenSecrets.Org, shows that she receives a great deal of support from the health care industry. It’s her top source of political action committee contributions and her fourth largest source of contributions overall.
It's the health care industry (hospitals, drug makers, insurers) that would feel the brunt of IPAB cost-cutting efforts, since the law prohibits the commission from altering benefits directly or imposing higher financial costs on beneficiaries. Of course, I have no way of knowing how, if at all, donations from such groups influence Schwartz on this matter.
Like so many provisions of the Affordable Care Act, the IPAB could probably use a little tweaking. But, in the eyes of the Congressional Budget Office and many experts, the IPAB’s presence bolsters the Affordable Care Act’s ability to hold down the cost of health care. And it does so in a far more humane way than, say, giving seniors vouchers that would buy only a fraction of the coverage Medicare provides now.
Is that the sort of rationing that opponents of IPAB would prefer?
Note: Given all the "death panel" talk, the actual design and function of IPAB is probably worth a post of its own. I hope to write one shortly. In the meantime, if you want to learn more about it, I highly recommend a New England Journal of Medicine analysis written by legal scholar Timothy Jost as well as a Kaiser Family Foundation primer written by experts Jack Ebeler, Tricia Neuman, and Juliette Cubanski.