The Ryan vs. Sebelius Showdown on IPAB

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Human Events:

Health and Human Services Secretary Kathleen Sebelius was brought before the House Budget Committee, which is chaired by the Path to Prosperity creator Rep. Paul Ryan (R.-Wis.), to discuss the future of health care in America. The hearing’s focus would mainly be on the controversial Independent Payment Advisory Board (IPAB), which was created as a part of ObamaCare.

IPAB is controversial because it appears to be akin to the “death panels” that were brought up during the big ObamaCare fight. It is essentially an unelected board of 15 “experts” that will have control over the health care that seniors receive, which Sebelius called merely a “fail-safe” in case the program lacked funding.

The arguments coming from the committee members and the Health and Human Services (HHS) secretary were to a great extent a continuation of the debate started by the new health care law, and both sides made predictable philosophical and partisan arguments.

Ryan first spoke about the coming collapse of the current Medicare system and described all of the current conditions that will cause the program to implode. He highlighted the mounting overall health care costs that will increase so dramatically over the next 10 years that it will cause Medicare to run out of funds.

Baby Boomers have been retiring at a clip of about 10,000 people a day. With the average life span now nearly a decade longer than when Medicare was first created, there is now a greater burden on young people to take care of the aging population. Ryan said, “These aren’t Democratic facts, these aren’t Republican facts, these are facts.”

In Sebelius’ opening testimony, she said, “When Medicare was created in 1965, it was seen as a national promise. Seniors wouldn’t go broke because of a hospital bill.” She continued to explain why that made it necessary for IPAB to be created to act as a backstop, ensuring that the Medicare promise is fulfilled.

IPAB needs to be used as a backstop because of the fundamental change in the way that Medicare operates along with the new health care rules created as a part of the ObamaCare legislation.

ObamaCare puts a cap on Medicare, and Ryan said, “This is the first time we actually capped an entitlement.” This cap could push the program to defer to IPAB in order to decide how to operate under that cap. So, ultimately, health care decisions could be made by this board of 15 unelected bureaucrats if the overall program ends up on the rocks. Given the current trajectory, it would appear that the likelihood of that occurring is quite high.

Other Republicans on the committee expressed concerns that, under the new law, health care providers will be continually paid less and less for their services to Medicare patients. This will increase costs for those covered under private insurance plans, pushing many health care providers out of business.

Ryan described how dramatic the cuts to private insurers would be. He said, “Providers who are reimbursed through Medicare receive about 80% of what a private plan offers. … This falls from 80% to 48% by 2022, and to 33% by 2050.”