About that unelected Medicare board

October 3, 2012

President Obama and Mitt Romney spent much of the debate’s segment on health-care issues sparring over the “Independent Payment Advisory Board,” or IPAB, a panel of 15 president-appointed experts that the 2010 Affordable Care Act will establish to help curb spending on Medicare.

The law “puts in place an unelected board that will tell people, ultimately, what kind of treatments they can have,” charged Romney. “I don’t like that.”

Obama countered that “what this board does is identify best practices and says, let’s use the purchasing power of Medicare to institutionalize all these good things we do.” But the president made a point of adding, “Let me just point out that this board we’re talking about can’t make decisions about what treatments are given. That’s explicitly prohibited in the law."

Just how will the IPAB work? Its powers kick in only if federal spending on Medicare exceeds yearly targets set by the law. At that point the board must propose spending cuts. Congress could overrule the panel, but only if it musters a super-majority in the Senate, or comes up with an alternate plan that saves at least as much.

That's a lot of authority for an unelected board. But as Obama noted, there are limits on the IPAB’s maneuvering room. It cannot ration care, cut benefits, change eligibility rules or increase seniors’ premiums or cost sharing. That leaves cuts to providers such as doctors, device makers, and — after 2020 — hospitals, as the board’s main tool.

But critics argue the cuts could still, as Romney put it, “ultimately” hurt seniors, if providers respond to the cuts by skimping on care or dropping out of Medicare.  

For all the controversy over the IPAB, it’s unclear how much of a role it will actually play. The Congressional Budget Office has estimated that, partly due to the other cuts to Medicare in the health-care law, spending on the program will remain within the law’s targets for at least the decade — eliminating the need for the IPAB to step in.

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Peter Wallsten · October 3, 2012