Is ObamaCare's Medicare Cost Control Board Unconstitutional?


No, not the *iPad*

In yet another episode of let's-hope-the-bureauwonks-solve-our-fiscal-problems, Congress decided that the easiest way to control the rising cost of Medicare was to hand power over to a 15-member panel of health bureaucrats charged with containing spending on America's most expensive entitlement. The result is the Independent Payment Advisory Board, or IPAB, a cost-containment board appointed and housed under the executive which, under ObamaCare, is given the authority to make reccomendation about how to change Medicare in order to meet predetermined cost-containment targets. 

IPAB may technically be an advisory board, but those recommendations aren't really recommendations so much as legislative changes: They go into effect automatically unless Congress either proposes equally large cuts of its own or three-fifths of the Senate votes to override the cuts. 

The board's power to effectively rewrite law, as well as its home in the executive, may mean that it is unconstitutional. George Will has a handy overview of the argument against the board:  

The PPACA repeatedly refers to any IPAB proposal as a "legislative proposal" and speaks of "the legislation introduced" by the IPAB. Each proposal automatically becomes law unless Congress passes — with a three-fifths supermajority required in the Senate — a measure cutting medical spending as much as the IPAB proposal would.

…And it gets worse. Any resolution to abolish the IPAB must pass both houses of Congress. And no such resolution can be introduced before 2017 or after Feb. 1, 2017, and must be enacted by Aug. 15 of that year. And if passed, it cannot take effect until 2020. Defenders of all this audaciously call it a "fast track" process for considering termination of IPAB. It is, however, transparently designed to permanently entrench IPAB — never mind the principle that one Congress cannot by statute bind another Congress from altering that statute.

That principle may cause courts to dismiss the challenge by the Phoenix-based Goldwater Institute to Congress's delegation of its powers, because courts may say that Congress can just change its mind. Hence the court may spurn the institute's argument on behalf of two Arizona congressmen, Jeff Flake and Trent Franks, that the entrenchment of the IPAB seriously burdens the legislators' First Amendment rights.

Diane Cohen, the institute's senior attorney, demonstrates that the IPAB is doubly anti-constitutional. It derogates the powers of Congress. And it ignores the principle of separation of powers: It is an executive agency, its members appointed by the president, exercising legislative powers over which neither Congress nor the judiciary can exercise proper control.

The Supreme Court hasn't been terribly strict about delegation of powers cases in recent years. But this case may be different. Last month, Mark Hemingway talked to Goldwater's Diane Cohen about their case:

"The bottom line is what this board is going to be doing is not making recommendations to Congress. They're really going to be passing law. The statute actually calls it 'law' throughout the Patient Protection and Affordable Care Act," says Diane Cohen, the Goldwater Institute's lead attorney. "Congress doesn't have to pass them, the president doesn't have to sign them. So it's taking over a historically congressional responsibility and duty—and here comes the legal mumbo-jumbo—without any 'intelligible principles' to guide this board."

Unlike other federal agencies with regulatory powers, IPAB is subject to no external review process—no public notification in advance of proposed rules, no opportunity for public comment, no administrative guidelines, and no judicial review. Cohen sees Congress as "just abdicating" its responsibility "because they can't withstand political pressure."  

What's being proposed in IPAB is so basic a violation of the traditional separation of powers, Cohen says, that we are in virtually uncharted legal territory. To the extent that legislative powers can be exercised outside of Congress, such authority is granted through the "delegation of powers"—a well-defined legal principle. "People will say, 'We haven't had a case striking down delegation for years'—but this is really above and beyond what we have seen," observes Cohen.

Regardless of the health care overhaul's attempts to entrench IPAB into the system, Congress may simply change its mind about the board anyway. In the House, at least, even Democrats aren't particularly happy with giving up their power over Medicare, and there are already efforts underway to get rid of the board. And it's still early on in this fight: IPAB hasn't been formed yet, much less made any recommendations. Expect oppoition to increase if and when the board actually gets around to announcing its package of Medicare cuts. 

But neither the constitutional challenges nor the political instability of the board seem to worry Obama. In fact, he's doubling down on his commitment to IPAB. In an April speech on the debt, he proposed to rely on the board to do even more of the debt and deficit reduction heavy lifting that he and his colleagues in Congress have so far been unwilling to do themselves.