NCPA - National Center for Policy Analysis

Medicare's Independent Payment Advisory Board

May 16, 2011

The Independent Payment Advisory Board (IPAB), a creation of the Patient Protection and Affordable Care Act (PPACA), is governed by a 15-person board of presidential appointees.  It targets certain Medicare spending, and attempts to take it away from congressional oversight.  IPAB's authority is triggered when Medicare's future spending is anticipated to increase faster than a target rate, says John R. Graham, a senior fellow with the National Center for Policy Analysis and director of health care studies at the Pacific Research Institute.

In a new publication, Graham makes the following key points:

  • IPAB is a new bureaucracy established by the PPACA that will limit Medicare beneficiaries' access to certain medical goods and services -- especially new prescription drugs.
  • The board puts Medicare beneficiaries' access to prescription drugs and certain other medical goods and services under control of a board of 15 presidential appointees, while leaving decisions about other medical goods and services under control of Congress.
  • It will be called upon to cut much more Medicare spending than officially estimated, because physicians and hospitals are highly likely to succeed in restoring the cuts that PPACA imposes upon them.
  • IPAB could deny Medicare beneficiaries access to every innovative prescription drug introduced every year, but still have little effect on Medicare spending.
  • As long as Congress exerts political control over Medicare beneficiaries' access to medical care, all treatments and providers should be treated equally, which implies that IPAB should be abolished.

Source: John R. Graham, "Mission Impossible: Medicare's Independent Payment Advisory Board," Pacific Research Institute, May 11, 2011.


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