The Silver Lining in the Medicare Trustees’ Report

by Naomi Lopez and Christina Sandefur
June 6, 2018

For the first time in several years, no one was scouring the annual Medicare Trustees’ Report to see if and when the Independent Payment Advisory Board (IPAB) would be triggered. Medicare, the federal healthcare program for the nation’s elderly, is facing fiscal insolvency—and it has been for decades.

Enacted as part of the Affordable Care Act (ACA), IPAB was one of the greatest and most disturbing power grabs in American history. Intended to be a cost-saving mechanism for the Medicare, IPAB’s authority was far broader. The Board—whose 15 members were not elected by the American people—yielded unprecedented power to write healthcare rules that would automatically become law without a vote of Congress, signature of the president, notice to the public, or review by the courts.

IPAB would have been established when the five-year average per-capita growth rate for Medicare spending exceeded its annual target as reported annually in the Trustees Report. Fortunately, the Bipartisan Budget Act of 2018, enacted in February of this year, repealed IPAB and all related provisions.

That the Board was set to be the single biggest threat to health freedom in the U.S. prompted the Goldwater Institute to launch a federal legal challenge against IPAB. We also previously pointed out:

“Lawmakers underestimate the Board’s power, erroneously assuming that the single cost-cutting tool at the Board’s disposal is reducing Medicare payments to healthcare providers. But the Affordable Care Act requires the Board to consider the effect of the private sector on healthcare costs and empowers the Board to govern both government and private healthcare so long as the Board says those decisions are ‘related to the Medicare program.’”

More important, IPAB was “immune from judicial review, so patients and doctors can’t turn to the courts for protection if the Board prevents them from receiving or delivering care.” There would have been no legal recourse for the rationing of care.

Some fiscal conservatives might now be lamenting the fact that, by repealing IPAB, Congress has removed a check on uncontrolled Medicare spending. Indeed, the latest Trustees’ Report predicts the program will run out of money by 2026. But their disappointment would be misplaced.

There is no doubt that the Medicare program is in desperate need of modernization and financial overhaul, but doing so at the cost of our Constitution was never an advisable solution.

Lawmakers have the duty to revisit the Medicare program and pursue needed reforms. But these reforms should be crafted in the light of day, with real accountability, and in a manner that empowers patients to pursue their healthcare priorities and preferences.

Naomi Lopez is the director of healthcare policy, and Christina Sandefur is the executive vice president of the Goldwater Institute. Ms. Sandefur was also lead counsel in Coons v. Lew, the only federal legal challenge of the IPAB.