If a “death panel” never rationed health care, did it really earn the name?
That’s the question for Congress this week: The House soon will vote to repeal the Independent Payment Advisory Board established by the Affordable Care Act, dubbed at various times a “death panel” and rationing board by its opponents.
The irony, though, is that the board, which was created to come up with Medicare savings if the program’s spending grew too quickly, hasn’t had any work to do and might not for years to come — which now paradoxically might make it easier for the new GOP Congress to end it.
“It’s hysterical,” said Douglas Holtz-Eakin, president of the conservative American Action Forum and policy adviser to John McCain’s 2008 presidential campaign. “In my view, it was put in to make the budget numbers work. We’ll have this monomaniacal budget-cutter entity sitting out there to make sure it doesn’t get too big. Then it turns out, because it’s not getting too big anyway, you don’t need it. So off you go.”
The ACA created the 15-member IPAB, which technically started its work in 2013. The law said that if Medicare spending was projected to exceed a certain target rate, then the board would make recommendations for changes to the program to save money and bring growth down to the targeted level. This led to a lot of rhetoric about “rationing,” though the board was barred from doing any such thing and fact-checkers have routinely dubbed those claims mostly or totally untrue.
“These 15 political appointees will make all the major health care decisions for over 300 million Americans,” then-Rep. Michele Bachmann said in 2011 during one of the Republican presidential debates. “I don’t want 15 political appointees to make a health care decision for a beautiful, fragile 85-year-old woman who should be making her own decision.”
But at least so far, Medicare spending hasn’t been increasing fast enough to trigger IPAB. It grew by an estimated 4 percent in 2013, according to the Kaiser Family Foundation, compared to a 6.1 percent average rate from 2000 to 2012.
That is a big change from the expectations when Obamacare passed five years ago. The Congressional Budget Office estimated in 2009 that the board would achieve $28 billion in savings by 2019. The current official projections don’t anticipate any savings until 2022 at the earliest.
“When the ACA was being debated, people were far more worried about projected increases in Medicare spending, and the actions IPAB might take as a result,” said Tricia Neuman, director of the Medicare policy program at the Kaiser Family Foundation. “The magnitude of spending slowdown since 2010 was somewhat unexpected.”
And it could still be another decade before the board has any work to do. The Medicare trustees estimated last year that until 2022, spending would not grow fast enough to require IPAB to recommend reforms. The Congressional Budget Office, when scoring the House’s bill this month, said it might take even longer, until 2025.
All of which is why CBO estimated that over the next decade, it would cost only — in the context of a $3.9 trillion federal budget and $600 billion in annual Medicare spending — $7 billion to do away with IPAB.
The repeal bill is expected to earn some bipartisan support; seven Democrats voted this month to advance the legislation out of the Ways and Means Committee, and 20 Democrats have cosponsored the bill.
“It’s really cheap to repeal it right now. There’s nothing to it. I think they’re just trying to take advantage of the opportunity to get rid of something that isn’t good policy. They can do it on a bipartisan basis,” Holtz-Eakin said. “It allows Republicans to make the point that the ACA is flawed. It allows Democrats to get rid of something that has been used as a club against them in past elections. Good riddance.”
It will then be up to the Senate to take up the bill, which plausibly could be folded into any contingency plan that Congress comes up with if the Supreme Court rules to invalidate Obamacare subsidies in 30-plus states this month.
But at least someone in Washington isn’t sold on getting rid of IPAB: The White House all but guaranteed that President Obama would veto a repeal bill when the House voted on one in 2012, and the Office of Management and Budget reiterated that position Monday.
The legislation, the administration said, “would repeal and dismantle the IPAB even before it has a chance to work. The bill would eliminate an important safeguard that, under current law, will help reduce the rate of Medicare cost growth responsibly while protecting Medicare beneficiaries and the traditional program.”