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Repealing Health Reform’s IPAB Would Be Unwise

June 1, 2015 at 5:00 PM

The House Ways and Means Committee is scheduled to vote tomorrow on a measure to repeal the Independent Payment Advisory Board (IPAB) — a presidentially appointed commission that health reform created to develop ways to slow the growth of Medicare spending.  Repealing IPAB would be bad for Medicare’s beneficiaries — and for controlling health care costs.  Here are four things to remember:

  • The charge that IPAB will ration health care is false.  Health reform specifically prohibits the board from rationing health care, raising Medicare’s premiums or cost sharing, cutting benefits, or restricting eligibility.  It must focus exclusively on proposals that achieve savings in the payment and delivery of health care services — not shifting costs to beneficiaries or reducing their care.
  • IPAB won’t usurp Congress’ role in setting Medicare policy.  Congress can structure Medicare so that it meets health reform’s spending targets without calling upon IPAB, and current projections indicate that congressional actions to date will do precisely that for several years.  But even if projected spending exceeds the targets, triggering IPAB’s role, Congress can modify IPAB’s proposals through legislation.
  • Alternatives to IPAB would be far worse for Medicare beneficiaries.  If Congress repeals IPAB and Medicare costs rise faster than expected, Congress may be likelier to consider proposals to replace Medicare’s guarantee of health coverage with premium support — a fixed payment that beneficiaries would use to help them buy private insurance or traditional Medicare.  Congress would achieve savings by limiting the amount of the voucher, leaving most beneficiaries — especially those who are older and sicker — to face higher premiums and cost-sharing for services. Premium support would also substantially reduce enrollment in traditional Medicare, dilute its market power, and deny Medicare much of its ability to serve as a leader in controlling health care costs.
  • IPAB provides an important backstop to health reform’s other cost control measures.  Health reform trims payments to health care providers under Medicare’s current payment mechanisms.  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.  Both are contributing to the recent historic slowdown in Medicare and overall health care costs.  These cost control measures are expected to produce most or all of the savings needed to meet health reform’s spending target, but IPAB serves as an important backstop to contain costs if they fall short.