The AIDS Institute: Statement on President Obama’s Announcement to Strengthen the Independent Payment Advisory Board (IPAB)

The AIDS Institute: Recently, The AIDS Institute praised Congress and the Obama Administration for rejecting many of the massive budget cuts to domestic and global HIV/AIDS programs that were initially proposed by Republicans in the House of Representatives. While we are relieved and gratified that these programs were mostly spared, we must now voice our concern about the Administration’s plans to reform Medicare and Medicaid.

In his address on deficit reduction from George Washington University, President Obama said, “We will slow the growth of Medicare costs by strengthening an independent commission of doctors, nurses, medical experts and consumers who will look at all the evidence and recommend the best ways to reduce unnecessary spending while protecting access to the services seniors need.” The President went on to say, “we believe the reforms we’ve proposed to strengthen Medicare and Medicaid will enable us to keep these commitments to our citizens while saving us $500 billion by 2023, and an additional one trillion dollars in the decade after that.” We are not quite sure that if the President’s recommendations are followed it will be possible to keep that promised commitment.

It is this “independent commission” that is the cause for renewed concern for people who utilize Medicare to access health care – including people living with HIV/AIDS. The President was referring to the Independent Payment Advisory Board or IPAB – the panel of 15 appointees that has been tasked with cutting Medicare spending.

The President is proposing to give IPAB even more power to cut Medicare than originally called for by the Affordable Care Act. The legislation called for setting a new, lower target of holding Medicare cost growth per beneficiary to gross domestic product (GDP) per capita plus 1.0 percent beginning in 2018. President Obama is now proposing that when Medicare growth per beneficiary exceeds growth in nominal GDP per capita plus 0.5 percent, IPAB is to recommend to Congress policies to reduce the rate of growth to meet that target. This means that cuts could happen earlier or faster than originally proposed. The President also gives IPAB additional enforcement mechanisms such as a dangerous automatic sequester as a backstop for IPAB, Congress, and the Secretary of Health and Human Services.

The IPAB is exempt from judicial or administrative review and its recommendations automatically become law without any Congressional action. Beginning in 2014, the IPAB will have set targets as to how much spending it must cut from the Medicare program. Each year, the Board will propose a set of Medicare cuts that congressional leaders can overturn only if they have a supermajority of votes, and the Board can set reimbursement rates, which if too low, can have an untoward effect of driving providers out of the system and thereby limiting access.

The AIDS Institute continues to voice these concerns because, in years past, whenever there was a problem with the program, we were able to appeal to Congress and work out a resolution. We are concerned that the IPAB’s decisions may have the undesired effect of driving providers out of the Medicare system, handicapping provider’s ability to deliver quality care to their patients based on the reimbursement rate of the type of treatment covered and/or provided, and interfering in the doctor-patient relationship. HIV/AIDS patients have a lot at stake when it comes to changes to Medicare. Today, approximately 100,000 people living with HIV/AIDS depend on the Medicare program for health care. In fact, since 2006, Medicare is the largest single source of funding for HIV/AIDS treatment. The IPAB’s efforts to cut costs may result in changes to drug formularies and loss of coverage for some drugs.

While The AIDS Institute welcomes and greatly supports healthcare reform and the Patient Protection and Affordable Care Act, the IPAB is an idea that needs to be revisited. If President Obama is serious about his commitment not to balance the budget on the backs of the poor and seniors, we need assurances that congress will have the ultimate responsibility for any changes to the Medicare program.

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