Why the GOP wants IPAB to be DOA

Updated
 

Ask congressional Republicans what they want to see happen to Medicare, and they’ll probably talk about reducing costs and restraining spending. It’s why the GOP’s attacks on the Independent Payment Advisory Board are so misguided – IPAB gives Republicans what they say they want.

I can understand why the underlying idea is contentious, but the facts are pretty straightforward. As Paul Krugman explained a while back, “Arguably the most important thing we can do to limit the growth in health care costs is learning to say no; we cannot afford a system in which Medicare in particular will pay for anything, especially when that’s combined with an industry structure that gives providers a strong financial incentive to engage in excessive care.”

To address this, the Obama administration wants IPAB, as part of the Affordable Care Act, to make the difficult decisions, free of the political process on Capitol Hill, precisely because Congress has failed so spectacularly in its ability to make these choices on its own. The board, made up of experts who would require Senate confirmation, would get to work in 2014.

As Sahil Kapur reports, House Republicans want to make sure IPAB never gets the chance to lower costs, and will push a measure this week to eliminate the cost-cutting board altogether.

The question now is: Why is the party that’s hell-bent on reining in Medicare pushing to repeal this powerful tool for doing just that? Part of it is to score political points by slicing off a key piece of the Affordable Care Act. But more importantly, Republicans don’t want to keep Medicare in its current form. Many of them don’t think that’s feasible. They want to transition it to a privatized model a la the Paul Ryan plan, where seniors get a fixed subsidy – or “premium support” – to buy their own insurance on a private exchange.

With Medicare costs exploding and the trust fund set to be depleted by 2024, the two parties increasingly agree that the program’s per-beneficiary spending ought to be held down to roughly per-capita GDP plus 1 percent, a significant cut from projections. The disagreement is on how to get there. Republicans want to achieve that by reducing benefits and reshaping Medicare itself; Democrats believe that money can be saved by cutting improper or unnecessary payments to providers.

As a result, even though IPAB seems to give Republicans what they want, that’s only true if we accept GOP claims at face value (in other words, if we believe the party really only wants to cut costs and restrain spending). What the crusade against IPAB helps demonstrate, though, is that Republicans place far more value in scrapping the Medicare system as it currently exists – and since IPAB would strengthen the current program, it’s standing in the way of the Republicans’ ideological goal.

The House bill is expected to pass this week, which will make the House majority feel better in the short term, but which is expected to die either in the Senate or after a presidential veto.

Why the GOP wants IPAB to be DOA

Updated