The Independent Payment Advisory Board

Starting in 2013, a New Entity Will Have Authority to Curb Medicare Spending if Growth Exceeds Targets. Should it?

The Independent Payment Advisory Board (IPAB), a new executive-branch entity created by the Affordable Care Act, will have significant authority to curb rising Medicare spending if per beneficiary growth in that spending exceeds target growth rates.

In a process that begins in 2013, recommendation made by the 15-member board will go to Congress for rapid consideration; Congress must adopt these or enact savings of similar size in Medicare. If Congress doesn’t act within a specified timetable, the secretary of health and human services (HHS) must implement the board’s recommendations. The board is not allowed by law to recommend changes in premiums, benefits, eligibility, or taxes, or other changes that would result in “rationing” of care to Medicare beneficiaries.

Arguments for and against IPAB hinge on several key issues—including the degree to which decisions about saving money in Medicare are so political that they should be made outside the context of the day-to-day operations of Congress. The arguments don’t necessarily correspond with divisions between the political parties, because Democrats are divided on their support for IPAB.

This Health Policy Brief explains how the IPAB’s unclear fate will likely be determined by the Supreme Court’s decision on the ACA or the outcome of the 2012 elections, and was published online on December 15, 2011 in Health Affairs.