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Don’t Repeal IPAB

October 3, 2017 at 5:15 PM

The House Energy and Commerce Committee will mark up legislation tomorrow to repeal the Independent Payment Advisory Board (IPAB) — a presidentially appointed commission charged with developing ways to slow the growth of Medicare spending.

Despite the claims of its critics, repealing IPAB would be unwise, as we’ve explained. Here’s why:

  • The charge that IPAB will ration health care is false. The Affordable Care Act (ACA), which created IPAB, specifically prohibits it from rationing health care, raising Medicare’s premiums or cost sharing, cutting benefits, or restricting eligibility.
  • IPAB won’t usurp Congress’ role in setting Medicare policy. Congress can structure Medicare so that it meets the ACA’s spending targets without triggering IPAB to develop recommendations to do so. And even if projected spending exceeds the targets, triggering IPAB’s involvement, Congress can modify IPAB’s proposals through legislation.
  • Alternatives to IPAB would be far worse for Medicare beneficiaries. IPAB can play an important role in improving the efficiency of the health care system. If Congress repeals IPAB, it’s likelier to consider blunt proposals to reduce spending that would cut benefits or shift costs to beneficiaries. For example, the latest House Republican budget plan would raise Medicare’s eligibility age from 65 to 67 over time. It would also replace Medicare’s guarantee of health coverage with premium support — a flat payment (or voucher) that would likely become increasingly inadequate for buying high-quality coverage.
  • IPAB provides an important backstop to other cost control measures. The ACA trims excessive Medicare payments to health care providers. It also takes steps to restructure the health care payment and delivery system to stop paying providers for more visits or procedures and begin rewarding effective, high-value health care. While these efforts have contributed to the recent slowdown in Medicare and overall health care costs, IPAB serves as an important backstop to contain costs if they fall short. The Congressional Budget Office estimates that IPAB will reduce Medicare spending by $20 billion between 2019 and 2027.

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