IPAB, Obama, and Socialism

Published April 18, 2011

National Review Online

They’re back. Rationing, death panels, socialism, all those nasty old words that helped bring Republicans victory in 2010, and that came to seem so impolite after November of that year. They’re back because of IPAB. Remember that acronym. It stand for The Independent Payment Advisory Board. IPAB is the real death panel, the true seat of rationing, and the royal road to health-care socialism. President Obama won’t admit to any of that, but his speech in response to Paul Ryan’s plan did push IPAB out of the shadows and into public view, however briefly. If Republicans don’t seize the IPAB issue and run with it, they’ll be losers in 2012. Policy wonks and political junkies may know a bit about this health-care rationing panel, but most Americans have barely heard of it. That has got to change. And the only way to expose and explain the dangers of IPAB is to tell the truth about Barack Obama.

In his speech on the deficit, Obama pointed to IPAB as an answer to Paul Ryan’s plan. In Ryan’s vision, competition among insurers will force efficiencies and lower prices. Under Obama’s plan, in contrast, health-care prices for the elderly would be controlled by IPAB. Ryan’s plan puts consumers in the driver’s seat, but also exposes them to the risk of bad choices and limited subsidies. While Obama’s plan offers government-guaranteed care, IPAB’s price controls will lead to one-size-fits-all rationing. As IPAB caps Medicare payments for various services, the elderly will be unable to obtain many kinds of care, or will experience de facto rationing via long treatment delays and sharp declines in the quality of care. And by the way, IPAB rationing will hit many current seniors, whereas Ryan’s reform of Medicare will never affect anyone now 55 or older.

So far so good. It sounds like we’re in for a much-needed debate over competing public-policy visions: freedom of choice, with all it’s risks, versus bureaucratic rule, with its mixture of guarantees and deprivations. Yet there’s a lot more going on here than a straightforward policy debate. That’s because Obama doesn’t want to tell you in detail what his alternative to Ryan actually involves, especially when it comes to IPAB.

A month ago here at NRO, my EPPC colleague James Capretta described the real plan by which the president and his allies aim to close the fiscal gap. Their goal, says Capretta, is to work by stealth, so voters never fully realize that the government has adopted their strategy. The first part of the plan involves taxing “the rich” for Medicare and health insurance, but without Reagan-style indexing of taxes to inflation. That way, inflation-driven “bracket creep” will raise health-care taxes on the middle class without congressional Democrats ever having to vote for new taxes. (See Ross Douthat on this today.)

The second part of the plan involves IPAB-imposed price controls and the large-scale rationing of health care that implies. But to work, IPAB’s authority has got to extend beyond Medicare. The idea, says Capretta, is to wait until the massive financial strains brought on by Obamacare bring calls for cost control. That’s when the Democrats will push for IPAB’s authority to be extended beyond Medicare to all of Obamacare, at which point we’ll be very close to a single-payer health-care system with Canadian-style rationing.

The president’s speech last week tracks well with Capretta’s predictions. Obama promised tax hikes for “the rich,” and vaguely alluded to plans to expand IPAB’s powers as deficits mount. Of course, even as he laid the groundwork for strengthening IPAB, Obama gave no real hint of the massive health-care rationing that would imply. And at the moment, the Congressional Budget Office predicts little or no savings from IPAB’s price-setting, so Obama’s speech came off as an unserious reply to Ryan. But as Mark Hemingway points out, Obama’s IPAB plan makes sense if we see it as “a Trojan horse” for a regime of “command-and-control rationing” quietly installed over the long term.

Rationing, death panels, socialism, and deception. It’s all there. When Sarah Palin first raised the “death panel” issue, she was referring to end-of-life counseling. But IPAB is the real death panel (as Palin herself later noted), a body of unelected bureaucrats with the power to cut off care through arbitrary rules based on one-size-fits-all cost calculations, just as in Britain. IPAB is the key to socialized, single-payer health-care, which is and has always been Obama’s ultimate goal. If Republicans remain unwilling to point out Obama’s unavowed socialist aims, they will be thrown onto the defensive by Obama’s class warfare rhetoric. That spells defeat in 2012.

One of the most frequent responses to Radical-in-Chief, my political biography of Obama, is to ask what difference the president’s socialist past makes to his policies in the present. After all, Obamacare couldn’t have passed if it hadn’t been supported by the Democratic Party as a whole. There are at least two answers to this question.

First, Obama’s socialist policies blend well with the Democratic platform because the left side of the Democratic Party has long been pushing an incrementally socialist (or if you prefer “social democratic”) program. In that sense, Obama’s socialist roots are important as a revelation of the broader Democratic left’s unavowed ideological intentions.

The IPAB issue also brings out a second and less well understood aspect of the Obama puzzle. Obama’s gradualism and ideological stealth have helped to mask significant distinctions between his own position and that of many other Democrats. IPAB was never included in the original House version of the health-care bill. In fact, in January of 2010, 72 House Democrats joined Republicans in sending a letterto Speaker Nancy Pelosi asking that IPAB be excluded from the bill. (This mixed moderate Democrats opposed to rationing with some far-left Democrats worried that a future Republican president could use the board to gut Medicare.) Imagine how many more moderate Democrats would have opposed IPAB in 2010 had Obama been honest about his ambitious long-term plans for IPAB rationing. Even now some (mostly) moderate Democrats are beginning to join again with Republicans aiming to repeal IPAB. So on the American political spectrum, Obama and his core left-Democratic allies remain ideological outliers. That is precisely what their habitual stealth is designed to disguis&mash;and what the truth about Obama’s past reveals.

To the extent that Obama effectively defeats the Ryan plan by securing reelection, he may eventually force even some Republicans to get behind his vision of socialized medicine. Once the Ryan plan is dead and Obamacare is the only game in town, budget hawks will have little choice but to demand stricter rationing by IPAB. In fact, it’s already happening. The bipartisan Simpson-Bowles deficit commission, appointed by Obama, essentially had no choice but to work within the framework of Obamacare. And Simpson-Bowles has pushed for IPAB to be granted a much wider range of powers, including the extension of its authority beyond Medicare to all of Obamacare (as per Capretta’s warnings). Obama hasn’t gone that far himself yet, but he’s already using the political cover provided by Simpson-Bowles to call for expanded IPAB authority.

Four months ago, Obama’s compromise on the Bush tax cuts looked like a pivot to the center. Today, Obama has answered Ryan by making class-warfare-themed opposition to the Bush tax cuts the centerpiece of his 2012 campaign. Meantime, the president continues to stealthily consolidate his socialist plans for health care. Will Republicans have the guts to expose Obama’s strategy and call him on it, as they did in 2010? Will they go after IPAB and the permanent health-care rationing regime Obama means to cement in place, or will they merely defend Ryan’s proposal against the avalanche of attacks sure to come? Telling the truth about Obama’s radical plans is the only way to win.

Stanley Kurtz is a senior fellow at the Ethics and Public Policy Center.

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