Obamacare “˜Death Panel’ Might Not Get To Do Anything Before Its Repeal

The House will vote to nix the Independent Payment Advisory Board this week.

A supporter of President Barack Obama's health care reforms(R) argues with several elderly women who are against the reforms in front of the US Supreme Court in Washington, DC after the morning session March 27, 2012. The US Supreme Court Tuesday took up the most contentious part of President Barack Obama's landmark health care reform, hearing arguments on whether it is constitutional to require Americans to buy insurance coverage. The second day of an unprecedented three days of arguments into the Affordable Care Act, derided by opponents as 'Obamacare' but hailed by supporters as a major achievement, has focused national attention on what could be a decisive issue in the 2012 presidential elections. AFP PHOTO/Karen BLEIER
National Journal
June 15, 2015, 4:01 p.m.

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.”

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