No Rx for Medicare

Two years after Congress enacted a sweeping healthcare reform measure, lawmakers are still battling over how to rein in the rising cost of medical care. On Thursday, the House voted to eliminate one of the main cost controls in the 2010 law: the Independent Payments Advisory Board, whose purpose is to keep a lid on the growth of Medicare’s budget. The board may be a blunt instrument, but it’s not the threat that its detractors claim.

The advisory board is something of a fallback plan in case the slew of other cost-control measures in the healthcare reform law don’t pan out. For any year in which Medicare costs are projected to rise faster than the targets set by the law, the board — 15 full-time members with relevant expertise, appointed by the president and confirmed by the Senate — must recommend ways to rein in spending. Significantly, the law bars any proposals that would ration healthcare, restrict benefits or increase out-of-pocket costs for Medicare beneficiaries. The board’s recommendations go into effect automatically unless Congress adopts an alternative plan that saves at least as much.

Critics argue that “unelected bureaucrats” shouldn’t have so much influence over Medicare, but bureaucrats at the Department of Health and Human Services already have more power, including the authority to exclude treatments and deny coverage. Congress, meanwhile, can make systemic changes in Medicare, but lawmakers abandoned the last major effort to slow spending growth in the face of special-interest pressure.

The point of the new board is to force lawmakers to hold the line on Medicare costs. That necessarily involves some tough choices, considering how much faster Medicare spending has been growing than the economy as a whole. But the same can be said of any effort to slow the growth of Medicare, including the Medicare overhaul backed by the House GOP leadership. That measure would gradually make health insurance less affordable for the elderly, which looks a lot more like rationing than what the advisory board could do.


A better criticism of the board is that if healthcare costs go up rapidly, it will have to recommend changes that generate savings right away. That tight time frame favors short-term fixes, such as cutting doctors’ fees, that could hinder access to care. Rather than addressing those problems and drawing bipartisan support, however, the House GOP proposed to replace the board with a controversial set of limits on medical malpractice claims, assuring the bill’s demise in the Senate. Lawmakers’ track record on Medicare shows that they don’t have the political will to hold down spending. Despite the new board’s potential faults, it’s a better approach than having no restraints at all.