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.”
Sebelius and several Democrats on the committee reiterated that important decisions regarding the health care of Americans cannot be left to sharkish private insurance companies. They emphasized the great potential for reduction in health care costs by proposed improvements to the health care industry, such as reduction of waste, elimination of medical errors, and reduction of unnecessary readmittance of patients into hospitals.
Rep. Tom Price (R.-Ga.) voiced concerns about the impact of the IPAB, which he called a “denial-of-care” board.
“This gets to the heart of the quality of health care in this country. As a physician, I can tell you that if I’m told by the federal government that I will not be paid for a service to a patient, what happens is that I may be coerced by the federal government into not even presenting that option to the patient.”
He said that the existence of the IPAB violates the 1965 law that created Medicare in that it authorizes federal employees to supervise and control compensation to health care providers for services to patients.
“The only way that the Independent Payment Advisory Board are able to affect what the physician does for the patient is to deny payment for that provision of services.”
When Sebelius denied it, Price responded by saying, “I would urge you, Madam, to simply read the section. Just read the section.”
Price said that the IPAB is “pernicious” in its reach into the relationship between patients and doctors and is a violation of American principles as they relate to health care.
Ultimately during the hearing, Sebelius dismissed and downplayed the impact of IPAB, saying that it would in fact only operate as an “advisory board” if Congress does its job. She and Democrats on the committee relentlessly claimed that Ryan’s ideas would, “end Medicare as we know it,” as expressed by Rep. Allyson Schwartz (D.-Pa.).
Schwartz also said that Ryan’s Path to Prosperity plan to reform entitlements was now the Republicans’ plan, something that Ryan has pushed since he unveiled it.