Hadley Heath

This summer, most of the public's political attention is focused on the tug-of-war over the debt ceiling and government budget. Yet another important drama is also unfolding in Washington.

This week, Congressional leaders will hold a hearing on the IPAB: the Independent Payment Advisory Board, which could be a first step to the board's repeal This board, created by the Affordable Care Act (“ObamaCare”), is one of the lesser-understood provisions in the 2000-page law, but it is a critical aspect, exemplifying how ObamaCare would control Medicare costs. If the public learns more about IPAB, the movement to fully repeal ObamaCare will gain important momentum.

Lawmakers created the IPAB in the Affordable Care Act to help solve Medicare's significant financial problems. The average couple will pay $140,000 into Medicare during their working years, but will get nearly three times that amount back in health care services through Medicare. This pattern has led the program to a $79.4 trillion “unfunded liability” or budget hole, and that figure grows each year.

Bad budgeting is not the only problem that Medicare faces today. Medicare and Medicaid – the two giant government health insurance programs – demonstrate clearly the difference between access to health insurance and access to health care. While millions of people have access to the insurance offered by these programs, they are often declined by doctor’s offices because of the too-low reimbursement rates offered to medical providers.

Here’s the IPAB approach to fixing these problems: Fifteen bureaucrats will take control of Medicare cost containment in 2014. Three nonvoting members of the Board are already determined: the Secretary of Health and Human Services, the Administrator of CMS, and the Administrator of the Health Resources and Services Administration. The other 12 appointees will be selected by the President and confirmed by the Senate.

Each year, the CMS director will submit to IPAB the per-capita growth rate in Medicare and the target per-capita growth rate. Undoubtedly, as health care costs continue on their upward spiral (fueled by government regulations), the growth rate will be higher than the target rate. The mission of IPAB will be to make the two rates match, by drafting a proposal for changes to the Medicare program. This proposal will become law unless Congress, by supermajority in both houses, votes to stop the proposal and comes up with its own plan to match IPAB’s savings.


Hadley Heath

Hadley Heath is a Policy Analyst at the Independent Women’s Forum.