Jonathan Chait

The Anti-IPAB Jihad

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The conservative position on government-subsidized health care for seniors is that it should be rationed into vouchers worth far less than the cost of private health insurance. The second-best option, if that privatization doesn't occur, is for traditional government to spend wantonly, on the grounds that any attempt to make the system more efficient is "rationing by government bureaucrats." So, the best option is to eviscerate Medicare, but failing that it must be as wasteful as possible. Thus the conservative jihad against the Independent Payment Advisory Board, which is tasked with restricting wasteful Medicare spending.

Without directly challenging the logic, Josh Barro notes that these preferences don't even make factual sense:

IPAB and RyanCare are not substitutes. Ryan’s proposal does not even begin shifting seniors off of traditional Medicare until 2021, and people who turn 65 before that year will be allowed to stay on traditional Medicare until they die. Therefore, premium support produces no savings within the next decade and fairly limited savings in the following one. That’s not going to cut it alone; we also need to achieve near-term savings within the traditional Medicare program.

Recognizing that need, Paul Ryan’s budget proposal assumes $389 billion in Medicare savings, relative to President’s budget, before 2021. Unfortunately, Ryan has not identified the mechanismthat these savings will come from. But the only ways to save money in traditional Medicare are to pay less for things or to pay for fewer things; which is to say, you can only hit that target if you have IPAB or something that looks an awful lot like IPAB.

The [National Review] Editors are right to note that IPAB, despite all the Democrats’ denials, is a rationing measure. But rationing should not be a dirty word. The alternative to rationing is uncontrolled expenditure. Ryan himself described the situation correctly: “Rationing happens today! The question is who will do it?” If you moved to a premium-support model, the answer would be “consumers and private insurers.” But since single-payer Medicare is going to be around for decades to come (if not forever) some of that rationing will have to be done by the government.

Of course, another factor here is that, to the extent that IPAB and other reforms in the Affordable Care Act slow health care inflation, they reduce the pressure on Medicare's financing, and make it harder for Republicans to present Paul Ryan's solution as the only alternative to collapse.

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