The congressional backlash against the Independent Payment Advisory Board is no surprise. The whole point of the IPAB — which can control costs in Medicare in the absence of congressional action, though not if a supermajority in Congress votes to stop it — is to take power away from Congress on an issue where they’ve clearly failed. Back when the IPAB was passed into law, Peter Orszag, then the Obama administration’s budget director and one of the idea’s most committed advocates, called it the largest yielding of sovereignty from the Congress since the creation of the Federal Reserve.” He wasn’t kidding. And he didn’t see it as a bad thing.
It all goes to your theory of cost control in Medicare. In practice, I think liberals and conservatives both agree that Medicare’s problems have a lot to do with Congress’s inability to resist entreaties from the program’s users and suppliers. Conservatives think Medicare is constantly petitioned by seniors who want more lavish benefits, doctors who want higher reimbursements, device manufacturers who want their products included, etc. Liberals see it similarly, though with a more corporate spin: Medicare Part D doesn’t negotiate for low drug prices because drug companies persuaded legislators to stop Medicare from negotiating discounts on drugs. When private insurers were allowed to compete with the Medicare program under the theory they’d be more efficient, they ended up persuading Congress to pay them 120 percent what the traditional Medicare program was paid.
It’s not all that clear how voucherizing Medicare would solve this. You’d still have the drug companies, the doctors, the seniors and everyone else petitioning Congress, but now you’d also have scores of private insurers joining to warn that if Congress didn’t keep the vouchers high — and they’d need to grow a lot faster than Ryan’s budget projects to keep up with insurance costs — they wouldn’t be able to cover seniors. In that way, RyanCare is a lot like the giant doctor’s cuts that the the law requires but that Congress keeps rejecting.
What’s somewhat clearer is how IPAB solves this: You’d still have the traditional Medicare claimants running to their member of Congress to complain, but now he or she would be able to say, “there’s nothing I can do,” and, even better, “it’s not my fault.” IPAB’s recommendations can’t be amended and they can’t be filibustered, so individual members have vastly less control over the process than they traditionally have. All Congress can do is fully replace an IPAB recommendation with a reform that saves the same amount of money or muster both a supermajority and a presidential signature to stop IPAB from acting. Either path requires a lot more effort than undermining cost control does right now.
That’s (a) why IPAB is promising and (b) why a lot of members of Congress want to get rid of it and replace it with something that interest groups like better. In that way, the IPAB repeal effort is a useful way of sorting the legislators who want to control Medicare’s costs from those who want to preserve their power to keep Medicare’s costs from being controlled.
For more on IPAB, this primer by the Kaiser Family Foundation is an excellent overview of both the promise of the program and what still needs to be done to help it succeed.