Only time will reveal all the effects of the Affordable Care Act on medical use and spending, but it already has fostered excessive rhetoric and general looniness.
And no aspect of the new law provokes more of this than the Independent Payment Advisory Board, or IPAB.
This board has a narrow mandate. Yet one commonly hears assertions, as in a recent letter to the editor, that “after 2014, her care will be determined by a government-appointed board that is not accountable to taxpayers.” That is simply false.
As explained in an excellent 2011 report by the Kaiser Family Foundation, “IPAB is directed to recommend savings for Medicare if the per capita growth in Medicare spending exceeds defined target growth rates.” And, as the Pulitzer Prize-winning PolitiFact.com notes: “It’s forbidden from submitting ‘any recommendation to ration health care,’ as Section 3403 of the health care law states. It may not raise premiums for Medicare beneficiaries or increase deductibles, coinsurance or co-payments. The IPAB also cannot change who is eligible for Medicare, restrict benefits or make recommendations that would raise revenue.”
It can, however, make recommendations to Congress based on what medical procedures are most and least effective and at what levels these be reimbursed.
This applies only to Medicare, not to private insurance, including that sold through the state exchanges established by the act. Nor does it apply to Medicaid, VA health service or the children’s health insurance programs in most states, although these programs might follow board recommendations for Medicare.
Limiting what Medicare reimburses is not new. Until the Affordable Care Act was passed, Medicare did not pay for many preventative measures, including for example, tetanus booster shots. That probably led to some deaths. It generally does not pay for experimental treatments or ones not endorsed by specialists’ groups and again, this may result in some deaths. Did the Medicare officials who wrote these rules constitute a death panel?
Limitations on what will be reimbursed also apply to most private insurance. I have gum disease and get my teeth cleaned four times a year, but my insurance will pay only for two. There is anecdotal evidence that treatment in a hyperbaric oxygen chamber might restore some of the sense of taste I lost to radiation treatments last year, but no reputable professional body has recognized this as effective and my insurance won’t cover it. I could go on, and so could nearly anyone else who has had much interaction with U.S. health insurance.
This lack of reimbursement does not mean that I cannot get the treatment. Virtually no insurance pays for LASIK eye treatment, but thousands of individuals get it every year. I pay for the two extra dental cleanings, and I could probably get the oxygen treatment if I were willing to lay out my own cash.
Such limitations on reimbursable treatments are not inherently bad. As long as resources are limited, it is difficult for a society like ours to pay for every possible medical treatment that any citizen might want, even if we are rich enough to afford a wide range of essential treatments for everyone.
Do the health insurance officials or the sundry academies and colleges of surgeons, radiologists or whatever who decide on reimbursements or approved treatment protocols constitute de facto “death panels?” If the IPAB is one, so are these groups.
Inevitably the guidelines and protocols they promulgate affect real people. Are you obese as indicated by a body-mass-index above a certain cut-off? Then you are not an appropriate candidate for a knee replacement. Did your drinking cause liver cirrhosis and are you still drinking? Way down on the liver transplant list for you buddy, at least unless you are a famous ball player.
When a guideline works to our disadvantage we may resent it. We may sue our insurer or call our senator. But most of us recognize that the guidelines are important. There has to be someone to say no to some medical treatments for some people. That isn’t easy.
Republicans who are flogging the Affordable Care Act with such “death panel” rhetoric need to be careful. If the act were to be repealed, with what would they replace it? And would any viable alternative be free of similar limits?
One alternative that deserves consideration is Wisconsin Rep. Paul Ryan’s proposal to turn Medicare into a voucher system. The very word “voucher” is anathema to many Democrats, but a voucher plan could be quite similar to those of Switzerland or the Netherlands that have outcomes that U.S. liberals admire.
Recognize, however, that even Switzerland must have a “death panel” to decide which procedures must be covered and which not in the basic private plans that all insurers must offer at a cost tied to the value of the basic voucher.
Not everything is covered, and if you want insurance for procedures that are not covered, you have to buy private insurance at market rates. But somebody has to decide what is not covered in the basic plan.
The Affordable Care Act is supposed to limit growth of Medicare outlays by doing this for Medicare as a whole. The Ryan plan would limit outlays by arbitrarily limiting the annual growth of the voucher to a level that probably would be less than the growth of medical costs.
Over time, under this plan, people would have to make choices, shell out more of their own money or go without treatment. That certainly might make consumers more price-conscious and induce competitive pressures that would limit cost growth.
But it inevitably also would mean that some people would die who would have lived if Medicare continues as currently constituted.
The Affordable Care Act is far from ideal. The questions are whether it will improve on the current system and how it compares to alternatives that critics might offer. Time may give us some answers. But demagoguery of the sort we are having had can only obscure the issues.