Senate Republicans are preparing to foreclose on the Democrats’ single best hope for addressing the country’s structural deficit without shifting a huge cost burden on to seniors and other Medicare beneficiaries. It’s a testament to the deep division between the parties on the key driver of future U.S. debt — which might not matter if debt wasn’t the high-stakes issue du jour in Washington.
Broadly speaking, there are two competing schools of thought about how best to reduce federal Medicare spending. One version works much like the House GOP budget’s Medicare privatization plan — it involves capping overall Medicare spending, and outsourcing the financing of seniors’ health care to private insurers. This shifts a significant cost on to seniors themselves, but Republicans like the idea for two reasons: (1) It reduces federal spending by fiat; and (2) It rations health care via the private sector — based on what services seniors think they’ll need, and what services insurers will agree to pay for.
The Obama administration’s alternative is a gentle twist on government rationing. It preserves Medicare as a single-payer system but shaves off waste-creating incentives so that over time the provision of care to beneficiaries is more affordable, more efficient, more research-based than it is now without explicitly “rationing” by declining more services over time. Or at least that’s the goal.
And that’s where the Independent Payment Advisory Board comes in. It’s the most promising of the many new cost-cutting initiatives created by President Obama’s health care law. IPAB will be tasked with implementing new ways to reduce Medicare spending, and, though its powers are limited in several key ways — for instance, it’s explicitly forbidden to “ration” health care — its recommendations take effect almost automatically.
There’s just one problem: Each of the board’s 15 members has to be confirmed by the Senate. That means filibusters and 60 vote requirements stand in the way of staffing a panel that Republicans decry as a government rationing board. And months ahead of the nominations, they’re telling Obama “good luck with that!”
“I think it would be pretty tough,” Sen. Orrin Hatch (R-UT), the top Republican on the powerful Senate Finance Committee, told TPM Monday, when asked about confirming Obama’s nominees to IPAB. “We don’t believe in rationing, nor do we believe in an unaccountable organization like that. I mean that’s crazy.”
“I’d have to think about that. If it were changed, then probably, but the way it’s constituted now, it’d be difficult,” Sen. Tom Coburn (R-OK), an influential conservative in the Republican caucus, said Monday in response to a question from TPM.
Complicating matters is that Obama’s own debt reduction plan involves vesting the panel with more power, not less.
This is all reminiscent of a recent Republican tactic on a different federal entity. Earlier this month the overwhelming majority of the Senate GOP caucus vowed not to confirm any nominee, Republican or Democrat, to head the new Consumer Financial Protection Bureau unless the agency’s powers are first weakened by statute. Getting around that will require Obama to make a recess appointment. Getting around a similar threat vis-a-vis the IPAB would require him to make 15 of them.
“At this point we haven’t had that discussion about IPAB in our conference, but as someone who supports repealing IPAB — and I know many members of our conference do, and are deeply concerned about how that board really is unelected and unaccountable — I can see those types of discussions being had within the Republican conference about whether that’s an appropriate step to take forward to address IPAB,” freshman Sen. Kelly Ayotte (R-NH) told TPM Monday.
The nominations are a long way off — the four party leaders in the House and Senate each get a say over three nominees, and the White House hasn’t begun consulting with them on potential candidates. But it’s hard to imagine House Speaker John Boehner (R-OH) and Senate Minority Leader Mitch McConnell (R-KY) playing nice in those talks — particularly given the large appetite in their caucuses for repealing the board all together.
A Democratic aide familiar with IPAB’s progress paints a rosier picture. “Republicans and Democrats share the goal of reducing Medicare cost growth. We aren’t thrown off by the politics of the moment - if we were, health reform never would have happened. We’re confident IPAB will ultimately be able to do its work.”
The potential dustup over IPAB is another indication that when it comes to reforming Medicare — inarguably one of the key contributors to long term deficits and rising national debt — the two parties are as far apart on the fundamentals of how to tackle the issue as they’ve ever been. Top Congressional aides claim Medicare will be part of the ongoing debt talks led by Vice President Joe Biden, but it’s difficult to conceive of those talks resolving these foundational differences.
“Right now I don’t see any bipartisan agreement because the Democrats don’t want to talk about it,” Hatch said.
Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at firstname.lastname@example.org.