Bills
| 3.23.22

Medicare Cuts: Is it Time to Shut Down the Independent Payment Advisory Board? (H.R. 1190)

Do you support or oppose this bill?

What is H.R. 1190?

(Updated July 19, 2017)

This bill would repeal sections of the Affordable Care Act (ACA) that established an Independent Payment Advisory Board (IPAB) — the group responsible for thinking of proposals to reduce Medicare spending. It would also restore the legal provisions that were repealed to create the IPAB.

The IPAB is a 15-member panel that recommends ways to keep Medicare spending from growing at a faster rate than the targets set by the Centers for Medicare and Medicaid Services (CMS). So, for example, the IPAB tries to reduce projected Medicare spending by:

  • 0.5 percent in 2015
  • 1.0 percent in 2016
  • 1.25 percent in 2017
  • 1.5 percent in 2018 and later. 
Under current law, if Congress doesn't pass a bill by August 15 (every year) that reaches the saving goals listed above, the IPAB’s recommendations are automatically put into affect. The IPAB can't offer recommendations that would ration care, increase revenues, change benefits, or modify eligibility. 

Argument in favor

The IPAB was a terrible idea. They are an unelected panel that recommend spending cuts based on an arbitrary scale. It has too much power — if Congress doesn’t pass legislation meeting their reduction rates — Medicare spending is automatically cut.

Argument opposed

Medicare spending needs to be reined in one way or another, it's increasing every year at an unsustainable rate. The IPAB ensures that the necessary cuts happen, even if Congress can't agree on a bill that would temper spending.

Impact

Seniors enrolled in Medicare and their families that would otherwise be affected by cuts to Medicare, Congress, CMS, the IPAB.

Cost of H.R. 1190

The CBO estimates that implementing this bill would have no budgetary impact between 2015 and 2021, but would increase spending by $7.1 billion over the 2022-2025 period due to increased spending on Medicare. This amounts to about $1.8 billion annually for those years. The CBO calls this estimate “extremely uncertain” because it is unclear if the IPAB trigger for reducing Medicare spending that exists under current law would still be effective after a repeal. As a result, this CBO estimate covers a broad range of possible effects.

Additional Info

In-Depth: During the debate to repeal the Affordable Care Act, the IPAB was characterized as a ‘death panel’ resulting from fears that it would lead to the rationing of health care.

While the ACA explicitly bans the IPAB from suggesting rations on health care...there are lingering questions about the legal definition of ‘rationing’. The IPAB indirectly ration care by cutting the compensation doctors receive for treating Medicare patients. Doctors have cited falling reimbursement rates for treating Medicare and Medicaid patients as a reason for declining to see those patients.

Those that favor keeping the IPAB point out that while it's an imperfect mechanism to restrain Medicare spending, it reduces Medicare spending. If you kill the IPAB, they contend, you put Medicare on an unsustainable trajectory.

Currently, this bill has 215 Republican and 20 Democratic cosponsors — and it passed the House Ways and Means Committee on a bipartisan vote of 31 to 8 with the support of seven Democrats. A letter from over 500 medical organizations has been circulated to members of Congress urging them to support efforts to repeal the IPAB.


Media

Summary by Eric Revell
(Photo Credit: Flickr user imfti)