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Remember the discredited Republican attack that President Barack Obama’s health care law created a "rationing board" or "death panel"?
It’s back — but with a softer edge. And it’s coming from the architect of the lightning-rod Republican plan to turn Medicare into a program that pays for private insurance.
Vice presidential hopeful Paul Ryan claims an "unelected, unaccountable" board created by the health care law "will lead to denied care for current seniors."
His language is more measured than other claims we’ve weighed over the years about Medicare’s new Independent Payment Advisory Board. But did he reach the truth?
Ryan trotted out the campaign line (and his Medicare-eligible mother, Betty) on Aug. 18, 2012, in retiree-heavy Florida community The Villages, and repeated it two days later in New Hampshire.
"Here's what the president won't tell you about his Medicare plan, about Obamacare," he said. "The president raids $716 billion from the Medicare program to pay for the Obamacare program. What's more, in addition to that, he puts a board of 15 unelected, unaccountable bureaucrats in charge of Medicare, who are required to cut Medicare in ways that will lead to denied care for current seniors."
We’ve evaluated versions of the $716 billion claim, finding that the amount wasn’t "raided" or "robbed" but that the law reduces future spending through a series of cost-saving measures. (Meanwhile, Ryan’s own House budget took advantage of the same savings he attacks.) Here we’re checking Ryan’s comments about the Independent Payment Advisory Board.
‘Unelected, unaccountable bureaucrats’
The Independent Payment Advisory Board, slated to start work in 2013, was created by the health care law to put distance between politics and Medicare.
(An evenhanded report from the Kaiser Family Foundation describes the board and its origin.)
Its 15 full-time members aren’t elected. But that doesn’t mean they’re unaccountable.
• They’re appointed by the president and approved by the Senate.
• They can’t serve more than two six-year terms.
• Their recommendations can be rejected by Congress.
• They must follow disclosure and ethics guidelines, and they can’t perform other jobs as they serve.
• They can be removed by the president for "neglect of duty" or "malfeasance in office," though not for any other reason.
Henry Aaron, an economist who specializes in health care and tax policy at the Brookings Institution, says they’re accountable in the same sense that members of any federal regulatory commission are accountable — they serve fixed terms and can be removed for cause.
But Gail Wilensky, a health economist who directed the Medicare and Medicaid programs from 1990 to 1992 under President George H.W. Bush, argues that all members of independent commissions, once appointed and confirmed "are almost impossible to move or influence."
By contrast, she says, other types of presidential appointees, such as Cabinet members, can be pressured to resign if they make serious mistakes.
In addition to limiting the reasons a board member might be removed, lawmakers sought to insulate the board’s decisions from special-interest lobbying.
• Its recommendations are fast-tracked in Congress and go into effect automatically if lawmakers fail to act.
• Implementation of its recommendations isn’t subject to administrative or judicial review.
So, board members aren’t elected, but while their decisions are protected by law, they are to some degree accountable. In particular, they could fail to win a second term, or get fired by the president.
Are they bureaucrats?
They become members of the bureaucracy by definition once they join the board. But they won’t all start that way. The law specifies that members will represent a mix of different professions, from health finance and economics to health facility management to medicine.
In other words, the same kind of people who might advise health care spending decisions outside of government.
‘Required to cut Medicare’
If Medicare grows too quickly, the Independent Payment Advisory Board is required to recommend cuts. But it won’t have as large an impact as you might imagine.
Obama’s health care law, the Affordable Care Act, reduces Medicare’s growth by more than $700 billion over the next 10 years, as we noted above.
How much savings will the board generate? Less than 4 percent of net Medicare savings in the law’s first decade, according to the Kaiser Family Foundation.
Recommendations from the board probably wouldn’t be necessary after that, according to Medicare’s actuary. That’s because it only has to recommend cuts in years that Medicare misses its growth targets. After 2019, other savings in the health care law, if allowed to take effect, would keep the program in check.
So it’s fair to say the bulk of the savings in the law are outside the board’s purview.
It’s only if those other measures fail to keep Medicare spending on track that the board is required to recommend additional ways to save. Meanwhile, if Congress comes up with another way to achieve the savings, it could overrule the board’s proposals.
Ryan said the board would "cut Medicare in ways that will lead to denied care for current seniors."
But by law, the board can’t ration care. It can’t change benefits. It can’t change eligibility. It can’t increase what seniors pay.
So it’s expected to cut payments to providers. That could be a problem, since some providers say they’re underpaid already. New York Times and USA Today stories in 2009 and 2010, for example, feature doctors opting out of Medicare because of its low payment rates.
How might that affect care? Imagine, say critics, being unable to find a nearby hospital or doctor who takes Medicare. Or discovering that payments for a particular service or procedure have been reduced.
"In that way, at least in theory, you could get actual denial of care," said Michael Tanner, a health care analyst for the libertarian Cato Institute, who opposes the health care law.
The Medicare actuary, Richard Foster, estimated that savings from the entire health care law would make about 15 percent of hospitals, skilled nursing facilities and home health agencies unprofitable by 2019.
That means, presumably, that to stay open they would need to shift costs to non-Medicare patients, merge with other providers or withdraw from Medicare, he said.
That’s one reason he’s testified that growth reduction under the law isn’t sustainable in the long range.
It’s "a serious issue," said Wilensky, the Bush-era Medicare official.
But that’s the projected effect for the entire law. Meanwhile, the board itself is required to consider "to the extent feasible" how its recommendations would affect access to care, especially in rural and other underserved areas.
Ryan said that Obama "puts a board of 15 unelected, unaccountable bureaucrats in charge of Medicare who are required to cut Medicare in ways that will lead to denied care for current seniors."
Board members aren’t elected, but it’s a stretch to say they’re entirely unaccountable. They’re appointed by the president and approved by the Senate. The president can fire them for neglect of duty or malfeasance.They’re required to recommend cuts to Medicare in years that other cost-saving measures don’t meet growth targets — but Congress can overrule their recommendations.
Meanwhile, "denied care" is a strong way to phrase the board’s possible effect. It’s expected to recommend cutting provider payments, with an eye on cutting waste and inefficiency. That could restrict some seniors’ access to care, depending on the what actions the board actually takes. Meanwhile, the board oversees only a small percentage of the Medicare savings in the health care law.
Ryan creates the specter of an unaccountable board making all of Medicare’s spending decisions, but that’s scarcely the case. There’s an element of truth to his claim, but his overstatements add up to a Mostly False impression.
CNN Transcripts, "Vice Presidential Candidate Paul Ryan Delivers Remarks in The Villages, Florida," Aug. 18, 2012
POLITICO, "Paul Ryan puts 'rationing board' in the crosshairs," Aug. 21, 2012
Email interview with Brendan Buck, spokesman for the Romney-Ryan campaign, Aug. 21, 2012
Interview with Michael Tanner, senior fellow at the Cato Institute, Aug. 20, 2012
Email interview with Gail Wilensky, economist and senior fellow at Project Hope, Aug. 21, 2012
Email interview with Henry Aaron, senior fellow at the Brookings Institution, Aug. 21, 2012
Government Printing Office, The Patient Protection and Affordable Care Act, March 23, 2010
Kaiser Family Foundation, "The Independent Payment Advisory Board: A New Approach to Controlling Medicare Spending," April 2011
Centers for Medicare & Medicaid Services, "'Estimated Financial Effects of the "Patient Protection and Affordable Care Act,' as Amended," April 22, 2010
Centers for Medicare & Medicaid Services, "Projected Medicare Expenditures under an Illustrative Scenario with Alternative Payment Updates to Medicare Providers," Aug. 5, 2010
U.S. House Committee on the Budget, "The Estimated Effect of the Affordable Care Act on Medicare and Medicaid Outlays and Total National Health Care Expenditures," Jan. 26, 2011
National Bureau of Economic Research, "The long-term impact of Medicare payment reductions on patient outcomes," 2011
New York Times, "Doctors are opting out of Medicare," April 1, 2009
USA Today, "Doctors limit new Medicare patients," June 21, 2010
PolitiFact, "PolitiFact's Lie of the Year: 'Death panels,'" Dec. 18, 2009
PolitiFact, "Do Mitt Romney and Paul Ryan want to turn Medicare into a voucher program?" Aug. 16, 2012 (Mostly True)
PolitiFact, "Romney says Obama 'cuts' $716 from Medicare to pay for Obamacare," Aug. 20, 2012 (Half True)
PolitiFact, "Pat Boone says IPAB rations care to pay for 'wasteful' spending," March 15, 2012 (Pants on Fire)
PolitiFact, "Top 5 falsehoods about the health care law," June 27, 2012
PolitiFact New Jersey, "Scott Garrett claims Affordable Care Act cuts Medicare funding, creates 'rationing board,'" Aug. 3, 2012 (Mostly False)
PolitiFact Tennessee, "Marsha Blackburn says patients’ power to control health-care decisions would be given to payment advisory board," March 30, 2012 (False)
PolitiFact, "IPAB board is 15 bureaucrats who will decide for the nation, says Michele Bachmann," Oct. 12, 2011 (False)
PolitiFact Georgia, "Gingrey claims federal health care board can decide if you get dialysis, chemo," Aug. 2, 2011 (False)
PolitiFact, "John Raese says health care law forces patients to go to a bureaucrat before a doctor," Oct. 19, 2010 (Pants on Fire)
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