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Courts are Price-Setting Board's Only Kryptonite

October 29, 2014

This week the Washington Times ran a story on one of the remaining legal challenges to the federal health care law – a challenge brought under the Constitution’s Origination Clause to the “tax” the law created. Recently, I spoke at the Cato Institute about another ongoing challenge to the law – the Goldwater Institute’s challenge to the Independent Payment Advisory Board (IPAB), a panel of 15 unelected bureaucrats created by the federal law to reduce Medicare costs.

The Institute initially filed its challenge in 2010, and more than two full years later, a federal judge in Arizona upheld IPAB’s expansive powers against our separation-of-powers challenge, declaring that the federal law sets sufficient boundaries to curb IPAB’s authority. The 9th Circuit Court of Appeals will hear our appeal later this year.

Despite the law’s purported limits, IPAB has vast power over the entire health care market to set price controls, levy taxes, and even ration care. In short, IPAB can do virtually anything so long as the Board says its action is somehow “related to the Medicare program.”

There’s little Congress can do to curb the Board’s expansive powers, because IPAB’s proposals automatically become law unless Congress and the President quickly enact a substitute plan with an equal reduction in spending. And except by a 3/5 supermajority of both houses during a short window in 2017, Congress can’t even repeal the Board.

But IPAB is not just independent of Congress. Its decisions can’t be challenged in court, nor are they subject to administrative review. The Board doesn’t have to give the public notice and an opportunity to comment on its proposals. And although IPAB is an executive agency, the President can’t modify its proposals before they’re submitted.

IPAB is contrary to American constitutional government. Our Founders established a federal government of limited powers, separated into three distinct branches. Maintaining this structure is critical to preserving liberty – the legislative, executive, and judicial branches check and balance each other to protect individuals against concentrated power.

IPAB consolidates the powers of every branch of government, but is accountable to none. So long as IPAB remains on the books, an unaccountable bureaucracy will control our health care. And so long as courts refuse to enforce the separation-of-powers doctrine, an unlimited government will stifle our freedoms.

Learn more:

Washington Times: Lawsuit Over Health Care Could Kill ‘Obamacare’

Cato Forum: Beyond the Individual Mandate: the Ongoing Legal Challenges to Obamacare

Goldwater Institute: IPAB Lawsuit (Coons v. Geithner)

Republican Study Committee: Organizations Supporting the Repeal of IPAB



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