U.S. House Votes to Abolish IPAB


by D. Brady Nelson

Source: Heartland Institute

The U.S. House of Representatives voted in June to abolish the Independent Payment Advisory Board (IPAB), widely considered to be a national health care rationing board.

IPAB is a 15-member panel of health care experts established under Obamacare tasked with making cost-cutting recommendations for Medicare annually if program spending exceeds a target growth rate. Its primary purpose is to deny patients access to expensive treatments.

The panel has two unusual characteristics setting it apart from other federal agencies: IPAB’s rulings automatically take effect with no formal rulemaking, and its recommendations are not subject to judicial or administrative review. President Barack Obama has not yet appointed anyone to the board.

The bill to abolish IPAB was sent to the Senate, where it was referred to the Senate Finance Committee. Analysts believe opposition to IPAB is not strong enough to overcome a Democratic filibuster.

“I don’t know if they are even seriously considering it at this point,” said Devon Herrick, a senior fellow at the National Center for Policy Analysis.

Difficult Choices Inevitable

Given the nation’s aging demographics and Medicare’s unsustainable financing scheme, federal and state governments cannot avoid making difficult decisions about what care is covered under Medicare, says Christina Sandefur, vice president for policy at the Goldwater Institute.

“The question is, who should make those decisions?” Sandefur said.

Sandefur says the Constitution does not permit unelected, unaccountable administrators to make rules that automatically become law without involvement from Congress and the president. That makes IPAB unconstitutional, she says.

To rein in costs of the federal program for the elderly, Sandefur recommends converting Medicare to a defined-contribution program.

“This would restore recipients’ freedom to choose the health plans and benefits packages that meet their own needs and preferences,” Sandefur said.

Is IPAB an Admission of Defeat?

Herrick says IPAB is an admission by the legislators who established it under the Affordable Care Act that Congress could not be trusted to deal with tough issues, such as runaway Medicare costs.

“Congress should replace IPAB with a program where patients have an incentive to behave like consumers and providers compete for patients’ business based on price and quality,” Herrick said. “Changes such as selective contracting, reference pricing, and narrower networks could remove many of the perverse incentives built into Medicare payments.”

Rationing by Any Other Name

Dr. John Dale Dunn, an emergency physician in Brownwood, Texas, says IPAB is all about the rationing of health care.

“Who gets health care is all being decided by guys with green visors pulled down, standing over an adding machine, counting every penny to make sure the house comes out ahead,” Dunn said.

“The mandarins of health care control the money,” said Dunn. “If you’re old and sick, then you’re not worth the expense, but if you’re young, you have some utility to them because you work, pay taxes, and you vote.”






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