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Update on The Medicare Trustee’s Report: IPAB Is Not Triggered

Elizabeth Carpenter | Jul 13, 2017

Today, the Medicare Trustees delivered to Congress their annual report on the financial operations and status of the program.

Today, the Medicare Trustees delivered to Congress their annual report on the financial operations and status of the program. This report did not trigger the mandatory cuts to Medicare spending via the Independent Payment Advisory Board, which is commonly referred to as IPAB. The report estimates that IPAB will not be triggered until 2021. 

What is IPAB?

The Affordable Care Act (ACA) established the 15-member IPAB to reduce Medicare spending growth without affecting coverage or quality. IPAB is required to make proposals to cut Medicare program spending when Medicare is projected to exceed specified growth targets. To date, no members have been appointed to IPAB, and as such the Secretary of the Department of Health and Human Services is required to develop savings proposals if Medicare spending exceeds the target rates. Congress does not vote on IPAB’s changes to Medicare and can only overrule the agency’s decisions by passing an alternative plan that cuts the required amount from Medicare. IPAB has been a source of much debate since it was created by the passage of the ACA, with the House of Representatives voting to repeal it nearly one year ago.

Key Questions about IPAB to Consider:

  • Is a repeal of IPAB likely in the near future?

  • How likely is it that IPAB will be triggered? 
  • What policy proposals could a Trump administration pursue under IPAB in future years? 

“While the future of the Affordable Care Act is unclear at the moment, IPAB remains an significant issue for the healthcare industry,” said Elizabeth Carpenter, senior vice president at Avalere Health. “The program is designed to be difficult for Congress to overrule and may provide the Trump Administration with a significant opportunity to reform the Medicare program in future years.”  

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