IPAB, THE OFFICIAL 'DEATH' PANEL

March 22, 2012

As focus turns towards the oral arguments in the Supreme Court on the constitutionality of certain provisions in the 2010 health care law, another provision in the law, the Independent Payment Advisory Board (IPAB), has flown largely under the radar. 

“I believe this commission is the largest yielding of sovereignty from the Congress since the creation of the Federal Reserve,” said Peter Orszag.  Mr. Orszag, former Director of the Office of Management and Budget, made this comment in reference to IPAB, which was created under the 2010 law. 

If you haven’t heard of IPAB, you aren’t alone.  Nearly 70 percent of those surveyed at the Conservative Political Action Conference last month in Washington hadn’t heard of it either.   

IPAB is a 15 member board of unelected bureaucrats with the mandate to control Medicare spending through legislative proposals if spending grows faster than a set rate.  However, the recommendations of the board aren’t merely proposals— they can automatically become law.

The board is empowered with one tool and one tool only for meeting this target: cutting reimbursement rates. With 30% of doctors already limiting the number of Medicare patients they see, the fear is IPAB’s potentially dramatic reimbursements cuts will leave even more to stop seeing seniors.

On the subject, Mr. Orszag said: “the proposals take effect automatically, unless Congress not only specifically votes them down but the President signs that bill.  So the default is now switched in a very important way.”

So, how will the board actually control Medicare costs? 

While the law expressly prohibits the board from rationing care, it allows changes to provider fees that will have the same effect.  Cost control will likely take the form of cutting payments to doctors and hospitals, which will in turn limits the supply of doctors willing to treat Medicare enrollees.   The American Medical Association said these cuts would harm seniors’ access to care. 

Unfortunately for Medicare patients, doctors are already moving away from accepting Medicare due to low payment rates.  As 78 million Baby Boomers begin to enroll in Medicare, even more pressure will be placed on the board to make cuts. 

Today, the House Of Representatives will vote on the IPAB. Keep in mind that President Obama said the board was the solution to Medicare’s funding crisis, yet it still leaves the program bankrupt in nine years. While Congressman Paul Ryan’s (R-WI) Medicare solution that saves the program from bankruptcy is well-known (and also misunderstood by most), IPAB has rarely been discussed, and thus the vote provides an important opportunity to educate the public about these two fundamentally opposite visions for Medicare’s future.

The need to reform Medicare to make the program sustainable is very important.  But, instead of letting voters decide the best path forward, the law has taken power away from the people and their representatives, and placed in the hands of unelected, bureaucrats. 

The role of Congress has been upended, and now rather than approve legislation, Congress will have to disapprove of the unilateral actions of a new bureaucracy.  

Such an enormous delegation of power sets the precedent for a slow, but steady, erosion in the quality of care Medicare enrollees can expect.  

In summary, ObamaCare creates a board of bureaucrats who are paid $160,000 a year, almost three times the annual wage of the average American, to hurt these very same Americans by limiting their access to necessary care.

Thankfully, Congressman Ryan’s “Pathway to Prosperity” presents another vision for Medicare, one modeled on the Congressional health plan that independent polling consistently shows Americans think they should have access to. Well here’s their opportunity as Ryan’s reform provides future seniors with the same premium support that empowers them to choose among a wide variety of Medicare-sponsored health policies and select the one that fits their needs and their desires.

When voters are presented with the choice of these two futures, one where patients choose their own health care or one where bureaucrats choose their health care, which choice do you think they will make?

Of course the vast majority will choose the latter and thus, that’s how Republicans must contrast the two Medicare reform plans if they wish to win the day, a fight they are presently losing.

As oral arguments against the individual mandate and Medicaid expansion play out in the Supreme Court next week, we must not lose sight of the bigger picture – the individuals’ rights to choose and manage their health care with their physician, not with the government.  A government of the people should be accountable to the people.


We believe that the Constitution of the United States speaks for itself. There is no need to rewrite, change or reinterpret it to suit the fancies of special interest groups or protected classes.