New at Reason: Peter Suderman on ObamaCare's Unworkable, Unconstitutional Spending Control Board

July 13, 2011

A small army of health policy wonks helped Democrats pack ObamaCare full of big ideas that they hoped would transform American health care, making it less expensive and more effective. Perhaps the biggest of those ideas is IPAB, the Independent Payment Advisory Board, a 15-member panel of bureaucrats appointed by the president and tasked with holding total Medicare spending to predetermined targets. The panel’s name suggests it’s merely an advisor to Congress, which has traditionally been in charge of Medicare spending, but its “recommendations” have the force of law unless Congress holds down spending enough to meet the target or eliminates the board, which it can only do with a supermajority vote in the Senate.

Rather than serve in an advisory capacity, IPAB is really designed to take over Congress’s job. Indeed, that’s the primary point. Over the years, Congress has repeatedly failed to hold Medicare spending in check—the program is speed walking towards insolvency in 2024—overriding scheduled payment reductions again and again under political pressure. IPAB is intended to take tough decisions about Medicare spending out of the purview of politically motivated legislators and turn those decisions over to a board of independent, unelected bureaucratic experts. Health wonks, in other words, convinced Congress to put a panel of health wonks in charge of the nation’s biggest health insurance program.  

In a major speech on the federal debt earlier this year, President Obama took this big idea and proposed to make it bigger by tightening IPAB’s official spending targets. Spending control and reduced political liability for Medicare cuts—what’s not to like?

Plenty. Aside from the individual mandate, IPAB is arguably the health care law’s most controversial provision, and according to Associate Editor Peter Suderman, it faces a host of hurdles. To name a few: It may not work. It might be unconstitutional. And it could block other reforms.

View this article.