Killing ObamaCare’s Rationing Board

The panel of seers is supposed to deny costly treatments.

The Supreme Court has left the ObamaCare demolition job to Republicans, who at least until 2017 will have to chip away at its architecture piecemeal. Last week the House made a good start by voting to kill the Independent Payment Advisory Board (IPAB), aka ObamaCare’s rationing board.

Eleven Democrats joined 233 Republicans to abolish IPAB, a 15-member jury of high priests appointed by the President that’s charged with making cost-cutting recommendations for Medicare. Unlike at other federal agencies, IPAB’s diktats automatically take effect with no formal rule-making. Its recommendations also aren’t subject to judicial or administrative review.

ObamaCare’s central planners knew that subsidies and “free” health care would drive up health costs, so they hyped various cost-control gimmicks that will make little difference if they work at all. But IPAB is supposed to be the killer app. Peter Orszag and the Obamateers designed it to be insulated from politicians in Congress who might object if the bureaucracy restricts breakthrough but expensive treatments.

Congress and the President would have to agree to an alternative cost-cutting proposal to overrule an IPAB decision. If Congress doesn’t repeal IPAB during a seven-month window in 2017, not even an agreement by Congress and the President will be able to supercede the board’s rulings after 2019.

Initially, IPAB is supposed to limit Medicare spending to a measure of inflation. After 2017 the target is the nominal per capita growth rate of the economy plus one percentage point. These targets will get harder to hit as baby boomers age and more advanced treatments come online for chronic conditions like Alzheimer’s.

ObamaCare putatively forbids IPAB from rationing or restricting care. But to adapt Humpty Dumpty, rationing means what IPAB chooses it to mean. As progressive single-payer champion Howard Dean explained in these pages (“The Affordable Care Act’s Rate-Setting Won’t Work,” July 28, 2013), IPAB will de facto determine which procedures and drugs get covered by setting reimbursement rates. IPAB will be able to restrict treatments by reducing rates to levels at which no doctor could provide care.

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