Theoretically, such a system could help rein in Medicare cost increases, economists say. The question is whether it would be politically acceptable to seniors and future generations, with polls indicating that the public is resistant to major changes. Recognizing the sensitivity, Ryan's plan would exempt anyone now 55 or older.
Obama and the Democrats would take a different approach to cost control, and that's where the IPAB board comes in.
IPAB (pronounced EYE-pab) has the power to force payment cuts to service providers if costs rise beyond certain levels and Congress fails to substitute its own plan for savings. But the law explicitly forbids the board from rationing care, shifting costs to seniors, or cutting their benefits. The Democrats would put the burden on service providers, such as drug companies, insurers and eventually, hospitals.
Obama has yet to name anyone to the panel, whose 15 members would have to be confirmed by the Senate. Government economists are forecasting a period of manageable Medicare costs, meaning that IPAB's services may not be needed until sometime around the end of the decade.
Democrats say they'd rather defend IPAB before older voters — and attack the GOP's Medicare overhaul.
"The rationing is in the Republican plan," said Rep. Chris Van Hollen, D-Md., the ranking Democrat on the budget committee. "What they do is allow insurance companies to ration people's health care."
The nonpartisan Congressional Budget Office said this week that both Obama's health care law and the new Ryan plan could potentially create access-to-care problems for Medicare recipients. The CBO cautioned that those could turn out to be greater under the GOP approach, which would squeeze Medicare growth harder. Republicans say that won't happen because competition among health plans will keep costs down by reducing waste.
The House bill is likely to hit a dead end in the Senate. The White House issued a veto threat against it earlier this week. House Republicans all but guaranteed that when they paired by IPAB repeal with caps on medical malpractice awards, which most Democrats oppose.
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