I Asked for and received this information from the office of Rep. Louie Gohmert R-Tx 1st District. He was a judge on the 12th Circuit appeals court. Showing that “The Independent payment Advisory Board “ would have the power to deny certain medical procedures to certain people.

Sam Hodges
Rep. Louie Gohmert (TX-01)
(202) 225-3035

Independent Payment Advisory Revolt

House Democrats turn on ObamaCare’s rationing committee.

Public opposition to the Affordable Care Act has grown in surprising and unpredictable ways since the entitlement passed two years ago, but few would have predicted then that so many Democrats would repudiate so many of President Obama’s core promises. Yet that is happening now, as Congress targets the 15-member central committee that is supposed to control health costs.

The vehicle is a bill from Tennessee Republican Phil Roe that would repeal the Independent Payment Advisory Board, or IPAB, the new ObamaCare bureaucracy with vast powers to control health care and health markets starting next year. A straight majority of the House has joined Mr. Roe as co-sponsors—some 234 Members, including 20 Democrats. The bill cleared the Energy and Commerce Committee this week with a vote from its ranking health Democrat and the Ways and Means Committee Thursday, on a voice vote with no recorded objections.

This turn is remarkable because the IPAB really does embody ObamaCare’s innermost values and beliefs—to wit, that health decisions are too important to leave to the people receiving the care (patients), the people providing the care (doctors and hospitals), the people paying for the care (taxpayers), or even the people who got the government involved in the first place (politicians).

Instead, supposedly independent experts will run a battery of small experiments, figure out which ones “work” and then impose them through Medicare’s price controls on all U.S. medicine. When health spending in a given year exceeds a budget benchmark, as it always does and will, the 15 White House-appointed wise men will work their miracles.

Former White House budget director Peter Orszag designed the IPAB to insulate it from the political system, akin to the Federal Reserve. This displeased liberals in Congress because for them entitlements aren’t merely about social welfare but advancing their political agenda. If the IPAB succeeds in quarantining Medicare from politics, Washington would lose its powers to direct spending to political clients.

The irony is that the White House is expanding the government-run health care that it says the government can’t be trusted to run by itself, even as its unaccountable, unelected board undermines democratic consent. The IPAB was relieved of the normal checks and balances of notice-and-comment rulemaking, and its edicts aren’t subject to administrative or even judicial review. Consumers have far more rights of legal recourse under the private health plans that Mr. Obama deplores.

The double and more dangerous irony is that such technocratic dreams have been consistently frustrated, despite three or four decades of trying. Now that Mr. Obama has rewarded the planners for their failures with new authority, the question is what they’ll do with it when they fail this time, too.

In January, the Congressional Budget Office surveyed the results of every major Medicare demonstration project over the last 20 years. Among 34 programs to reduce hospital admissions, all 34 “had little or no effect on hospital admissions” and “spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program.” Out of four so-called value-based payment programs, only one saved money, and then not that much.

Everyone hopes that this time is different and that the Affordable Care Act’s new attempts find more efficient ways of delivering care. But even considering its track record, there’s reason to doubt they will make any difference. Last year the Administration disclosed that Medicare’s payment system will crash if it stops processing bills for more than a week or two, because it doesn’t have enough computing power to handle a major backlog. One of the only things this entitlement does well is push money out the door.

The larger problem is that even successful pilot programs are hard to replicate. “This usually does not work,” as David Petraeus writes in his military counterinsurgency manual, which as it happens is the best deconstruction of “large-scale, mass programs” that we’ve seen. General Petraeus notes that “small-scale programs succeed because of local conditions” and he recommends keeping them that way, so that they’re “cheap, sustainable, low-key, and (importantly) recoverable if they fail.” This advice applies as much in health care as in the military, and it’s among the reasons that markets are so much better than national centralization.

It’s also among the reasons Paul Ryan’s Medicare reform is so much better than Mr. Obama’s. Beneficiaries would receive a “premium support” payment to buy insurance, and insurers and providers would compete for business on value for money. What “works” is what millions of consumers decide.

The only alternative, and the IPAB’s true end game, is harsher and more arbitrary price controls and eventually limits on the care patients are allowed to receive. The New England Journalists (of Medicine) deny this reality because ObamaCare has a clause that prohibits “rationing,” even as the law leaves that term undefined. But reducing treatment options will be inevitable as government costs explode.

The IPAB revolt among House Democrats comes as the White House demands even more powers for IPAB in its budget, including an automatic sequester. Whatever is motivating House Democrats, they deserve some credit for making Mr. Obama’s vision somewhat less likely.

Copyright 2012 Dow Jones & Company, Inc. All Rights Reserved





    (a) Findings.–Congress makes the following findings:
            (1) In general.–The individual responsibility requirement
        provided for in this section (in this subsection referred to as
        the “requirement”) is commercial and economic in nature, and
        substantially affects interstate commerce, as a result of the
        effects described in paragraph (2).
[[Page 124 STAT. 243]]
            (2) Effects on the national economy and interstate
        commerce.–The effects described in this paragraph are the
                    (A) The requirement regulates activity that is
                commercial and economic in nature: economic and
                financial decisions about how and when health care is
                paid for, and when health insurance is purchased.
                    (B) Health insurance and health care services are a
                significant part of the national economy. National
                health spending is projected to increase from
                $2,500,000,000,000, or 17.6 percent of the economy, in
                2009 to $4,700,000,000,000 in 2019. Private health
                insurance spending is projected to be $854,000,000,000
                in 2009, and pays for medical supplies, drugs, and
                equipment that are shipped in interstate commerce. Since
                most health insurance is sold by national or regional
                health insurance companies, health insurance is sold in
                interstate commerce and claims payments flow through
                interstate commerce.
                    (C) The requirement, together with the other
                provisions of this Act, will add millions of new
                consumers to the health insurance market, increasing the
                supply of, and demand for, health care services.
                According to the Congressional Budget Office, the
                requirement will increase the number and share of
                Americans who are insured.
                    (D) The requirement achieves near-universal coverage
                by building upon and strengthening the private employer-
                based health insurance system, which covers 176,000,000
                Americans nationwide. In Massachusetts, a similar
                requirement has strengthened private employer-based
                coverage: despite the economic downturn, the number of
                workers offered employer-based coverage has actually
                    (E) Half of all personal bankruptcies are caused in
                part by medical expenses. By significantly increasing
                health insurance coverage, the requirement, together
                with the other provisions of this Act, will improve
                financial security for families.
                    (F) Under the Employee Retirement Income Security
                Act of 1974 (29 U.S.C. 1001 et seq.), the Public Health
                Service Act (42 U.S.C. 201 et seq.), and this Act, the
                Federal Government has a significant role in regulating
                health insurance which is in interstate commerce.
                    (G) Under sections 2704 and 2705 of the Public
                Health Service Act (as added by section 1201 of this
                Act), if there were no requirement, many individuals
                would wait to purchase health insurance until they
                needed care. By significantly increasing health
                insurance coverage, the requirement, together with the
                other provisions of this Act, will minimize this adverse
                selection and broaden the health insurance risk pool to
                include healthy individuals, which will lower health
                insurance premiums. The requirement is essential to
                creating effective health insurance markets in which
                improved health insurance products that are guaranteed
                issue and do not exclude coverage of pre-existing
                conditions can be sold.
                    (H) Administrative costs for private health
                insurance, which were $90,000,000,000 in 2006, are 26 to
                30 percent of premiums in the current individual and
                small group
[[Page 124 STAT. 244]]
                markets. By significantly increasing health insurance
                coverage and the size of purchasing pools, which will
                increase economies of scale, the requirement, together
                with the other provisions of this Act, will
                significantly reduce administrative costs and lower
                health insurance premiums. The requirement is essential
                to creating effective health insurance markets that do
                not require underwriting and eliminate its associated
                administrative costs.
            (3) Supreme court ruling.–In United States v. South-Eastern
        Underwriters Association (322 U.S. 533 (1944)), the Supreme
        Court of the United States ruled that insurance is interstate
        commerce subject to Federal regulation.
    (b) In General.–Subtitle D of the Internal Revenue Code of 1986 is
amended by adding at the end the following new chapter:
“Sec. 5000A. Requirement to maintain minimum essential coverage.
    “(a) Requirement To Maintain Minimum Essential Coverage.–An
applicable individual shall for each month beginning after 2013 ensure
that the individual, and any dependent of the individual who is an
applicable individual, is covered under minimum essential coverage for
such month.
    “(b) Shared Responsibility Payment.–
            “(1) In general.– <<NOTE: Penalty.>> If an applicable
        individual fails to meet the requirement of subsection (a) for 1
        or more months during any calendar year beginning after 2013,
        then, except as provided in subsection (d), there is hereby
        imposed a penalty with respect to the individual in the amount
        determined under subsection (c).
            “(2) Inclusion with return.–Any penalty imposed by this
        section with respect to any month shall be included with a
        taxpayer’s return under chapter 1 for the taxable year which
        includes such month.
            “(3) Payment of penalty.–If an individual with respect to
        whom a penalty is imposed by this section for any month–
                    “(A) is a dependent (as defined in section 152) of
                another taxpayer for the other taxpayer’s taxable year
                including such month, such other taxpayer shall be
                liable for such penalty, or
                    “(B) files a joint return for the taxable year
                including such month, such individual and the spouse of
                such individual shall be jointly liable for such
    “(c) Amount of Penalty.–
            “(1) In general.–The penalty determined under this
        subsection for any month with respect to any individual is an
        amount equal to \1/12\ of the applicable dollar amount for the
        calendar year.
            “(2) Dollar limitation.–The amount of the penalty imposed
        by this section on any taxpayer for any taxable year with
        respect to all individuals for whom the taxpayer is liable under
        subsection (b)(3) shall not exceed an amount equal to 300
        percent the applicable dollar amount (determined without
[[Page 124 STAT. 245]]
        regard to paragraph (3)(C)) for the calendar year with or within
        which the taxable year ends.
            “(3) Applicable dollar amount.–For purposes of paragraph
                    “(A) In general.–Except as provided in
                subparagraphs (B) and (C), the applicable dollar amount
                is $750.
                    “(B) Phase in.–The applicable dollar amount is $95
                for 2014 and $350 for 2015.
                    “(C) Special rule for individuals under age 18.–If
                an applicable individual has not attained the age of 18
                as of the beginning of a month, the applicable dollar
                amount with respect to such individual for the month
                shall be equal to one-half of the applicable dollar
                amount for the calendar year in which the month occurs.
                    “(D) Indexing of amount.–In the case of any
                calendar year beginning after 2016, the applicable
                dollar amount shall be equal to $750, increased by an
                amount equal to–
                          “(i) $750, multiplied by
                          “(ii) the cost-of-living adjustment
                      determined under section 1(f)(3) for the calendar
                      year, determined by substituting `calendar year
                      2015′ for `calendar year 1992′ in subparagraph (B)
                If the amount of any increase under clause (i) is not a
                multiple of $50, such increase shall be rounded to the
                next lowest multiple of $50.
            “(4) Terms relating to income and families.–For purposes
        of this section–
                    “(A) Family size.–The family size involved with
                respect to any taxpayer shall be equal to the number of
                individuals for whom the taxpayer is allowed a deduction
                under section 151 (relating to allowance of deduction
                for personal exemptions) for the taxable year.
                    “(B) Household income.–The term `household income’
                means, with respect to any taxpayer for any taxable
                year, an amount equal to the sum of–
                          “(i) the modified gross income of the
                      taxpayer, plus
                          “(ii) the aggregate modified gross incomes of
                      all other individuals who–
                                    “(I) were taken into account in
                                determining the taxpayer’s family size
                                under paragraph (1), and
                                    “(II) were required to file a
                                return of tax imposed by section 1 for
                                the taxable year.
                    “(C) Modified gross income.–The term `modified
                gross income’ means gross income–
                          “(i) decreased by the amount of any deduction
                      allowable under paragraph (1), (3), (4), or (10)
                      of section 62(a),
                          “(ii) increased by the amount of interest
                      received or accrued during the taxable year which
                      is exempt from tax imposed by this chapter, and
                          “(iii) determined without regard to sections
                      911, 931, and 933.
                    “(D) Poverty line.–
[[Page 124 STAT. 246]]
                          “(i) In general.–The term `poverty line’ has
                      the meaning given that term in section 2110(c)(5)
                      of the Social Security Act (42 U.S.C.
                          “(ii) Poverty line used.–In the case of any
                      taxable year ending with or within a calendar
                      year, the poverty line used shall be the most
                      recently published poverty line as of the 1st day
                      of such calendar year.
    “(d) Applicable Individual.–For purposes of this section–
            “(1) In general.–The term `applicable individual’ means,
        with respect to any month, an individual other than an
        individual described in paragraph (2), (3), or (4).
            “(2) Religious exemptions.–
                    “(A) Religious conscience exemption.–Such term
                shall not include any individual for any month if such
                individual has in effect an exemption under section
                1311(d)(4)(H) of the Patient Protection and Affordable
                Care Act which certifies that such individual is a
                member of a recognized religious sect or division
                thereof described in section 1402(g)(1) and an adherent
                of established tenets or teachings of such sect or
                division as described in such section.
                    “(B) Health care sharing ministry.–
                          “(i) In general.–Such term shall not include
                      any individual for any month if such individual is
                      a member of a health care sharing ministry for the
                          “(ii) Health care sharing ministry.–The term
                      `health care sharing ministry’ means an
                                    “(I) which is described in section
                                501(c)(3) and is exempt from taxation
                                under section 501(a),
                                    “(II) members of which share a
                                common set of ethical or religious
                                beliefs and share medical expenses among
                                members in accordance with those beliefs
                                and without regard to the State in which
                                a member resides or is employed,
                                    “(III) members of which retain
                                membership even after they develop a
                                medical condition,
                                    “(IV) which (or a predecessor of
                                which) has been in existence at all
                                times since December 31, 1999, and
                                medical expenses of its members have
                                been shared continuously and without
                                interruption since at least December 31,
                                1999, and
                                    “(V) which conducts an annual audit
                                which is performed by an independent
                                certified public accounting firm in
                                accordance with generally accepted
                                accounting principles and which is made
                                available to the public upon request.
            “(3) Individuals not lawfully present.–Such term shall not
        include an individual for any month if for the month the
        individual is not a citizen or national of the United States or
        an alien lawfully present in the United States.
            “(4) Incarcerated individuals.–Such term shall not include
        an individual for any month if for the month the individual is
        incarcerated, other than incarceration pending the disposition
        of charges.
    “(e) Exemptions.–No penalty shall be imposed under subsection (a)
with respect to–
            “(1) Individuals who cannot afford coverage.–
[[Page 124 STAT. 247]]
                    “(A) In general.–Any applicable individual for any
                month if the applicable individual’s required
                contribution (determined on an annual basis) for
                coverage for the month exceeds 8 percent of such
                individual’s household income for the taxable year
                described in section 1412(b)(1)(B) of the Patient
                Protection and Affordable Care Act. For purposes of
                applying this subparagraph, the taxpayer’s household
                income shall be increased by any exclusion from gross
                income for any portion of the required contribution made
                through a salary reduction arrangement.
                    “(B) <<NOTE: Definition.>>  Required
                contribution.–For purposes of this paragraph, the term
                `required contribution’ means–
                          “(i) in the case of an individual eligible to
                      purchase minimum essential coverage consisting of
                      coverage through an eligible-employer-sponsored
                      plan, the portion of the annual premium which
                      would be paid by the individual (without regard to
                      whether paid through salary reduction or
                      otherwise) for self-only coverage, or
                          “(ii) in the case of an individual eligible
                      only to purchase minimum essential coverage
                      described in subsection (f)(1)(C), the annual
                      premium for the lowest cost bronze plan available
                      in the individual market through the Exchange in
                      the State in the rating area in which the
                      individual resides (without regard to whether the
                      individual purchased a qualified health plan
                      through the Exchange), reduced by the amount of
                      the credit allowable under section 36B for the
                      taxable year (determined as if the individual was
                      covered by a qualified health plan offered through
                      the Exchange for the entire taxable year).
                    “(C) Special rules for individuals related to
                employees.–For purposes of subparagraph (B)(i), if an
                applicable individual is eligible for minimum essential
                coverage through an employer by reason of a relationship
                to an employee, the determination shall be made by
                reference to the affordability of the coverage to the
                    “(D) <<NOTE: Applicability. Determination.>>
                Indexing.–In the case of plan years beginning in any
                calendar year after 2014, subparagraph (A) shall be
                applied by substituting for `8 percent’ the percentage
                the Secretary of Health and Human Services determines
                reflects the excess of the rate of premium growth
                between the preceding calendar year and 2013 over the
                rate of income growth for such period.
            “(2) Taxpayers with income under 100 percent of poverty
        line.–Any applicable individual for any month during a calendar
        year if the individual’s household income for the taxable year
        described in section 1412(b)(1)(B) of the Patient Protection and
        Affordable Care Act is less than 100 percent of the poverty line
        for the size of the family involved (determined in the same
        manner as under subsection (b)(4)).
            “(3) Members of indian tribes.–Any applicable individual
        for any month during which the individual is a member of an
        Indian tribe (as defined in section 45A(c)(6)).
            “(4) Months during short coverage gaps.–
                    “(A) In general.–Any month the last day of which
                occurred during a period in which the applicable
[[Page 124 STAT. 248]]
                was not covered by minimum essential coverage for a
                continuous period of less than 3 months.
                    “(B) <<NOTE: Applicability.>>  Special rules.–For
                purposes of applying this paragraph–
                          “(i) the length of a continuous period shall
                      be determined without regard to the calendar years
                      in which months in such period occur,
                          “(ii) if a continuous period is greater than
                      the period allowed under subparagraph (A), no
                      exception shall be provided under this paragraph
                      for any month in the period, and
                          “(iii) if there is more than 1 continuous
                      period described in subparagraph (A) covering
                      months in a calendar year, the exception provided
                      by this paragraph shall only apply to months in
                      the first of such periods.
                The Secretary shall prescribe rules for the collection
                of the penalty imposed by this section in cases where
                continuous periods include months in more than 1 taxable
            “(5) Hardships.–Any applicable individual who for any
        month is determined by the Secretary of Health and Human
        Services under section 1311(d)(4)(H) to have suffered a hardship
        with respect to the capability to obtain coverage under a
        qualified health plan.
    “(f) Minimum Essential Coverage.–For purposes of this section–
            “(1) <<NOTE: Definition.>>  In general.–The term `minimum
        essential coverage’ means any of the following:
                    “(A) Government sponsored programs.–Coverage
                          “(i) the Medicare program under part A of
                      title XVIII of the Social Security Act,
                          “(ii) the Medicaid program under title XIX of
                      the Social Security Act,
                          “(iii) the CHIP program under title XXI of
                      the Social Security Act,
                          “(iv) the TRICARE for Life program,
                          “(v) the veteran’s health care program under
                      chapter 17 of title 38, United States Code, or
                          “(vi) a health plan under section 2504(e) of
                      title 22, United States Code (relating to Peace
                      Corps volunteers).
                    “(B) Employer-sponsored plan.–Coverage under an
                eligible employer-sponsored plan.
                    “(C) Plans in the individual market.–Coverage
                under a health plan offered in the individual market
                within a State.
                    “(D) Grandfathered health plan.–Coverage under a
                grandfathered health plan.
                    “(E) Other coverage.–Such other health benefits
                coverage, such as a State health benefits risk pool, as
                the Secretary of Health and Human Services, in
                coordination with the Secretary, recognizes for purposes
                of this subsection.
            “(2) Eligible employer-sponsored plan.–The term `eligible
        employer-sponsored plan’ means, with respect to any
[[Page 124 STAT. 249]]
        employee, a group health plan or group health insurance coverage
        offered by an employer to the employee which is–
                    “(A) a governmental plan (within the meaning of
                section 2791(d)(8) of the Public Health Service Act), or
                    “(B) any other plan or coverage offered in the
                small or large group market within a State.
        Such term shall include a grandfathered health plan described in
        paragraph (1)(D) offered in a group market.
            “(3) Excepted benefits not treated as minimum essential
        coverage.–The term `minimum essential coverage’ shall not
        include health insurance coverage which consists of coverage of
        excepted benefits–
                    “(A) described in paragraph (1) of subsection (c)
                of section 2791 of the Public Health Service Act; or
                    “(B) described in paragraph (2), (3), or (4) of
                such subsection if the benefits are provided under a
                separate policy, certificate, or contract of insurance.
            “(4) Individuals residing outside united states or
        residents of territories.–Any applicable individual shall be
        treated as having minimum essential coverage for any month–
                    “(A) if such month occurs during any period
                described in subparagraph (A) or (B) of section
                911(d)(1) which is applicable to the individual, or
                    “(B) if such individual is a bona fide resident of
                any possession of the United States (as determined under
                section 937(a)) for such month.
            “(5) Insurance-related terms.–Any term used in this
        section which is also used in title I of the Patient Protection
        and Affordable Care Act shall have the same meaning as when used
        in such title.
    “(g) Administration and Procedure.–
            “(1) In general.–The penalty provided by this section
        shall be paid upon notice and demand by the Secretary, and
        except as provided in paragraph (2), shall be assessed and
        collected in the same manner as an assessable penalty under
        subchapter B of chapter 68.
            “(2) Special rules.–Notwithstanding any other provision of
                    “(A) Waiver of criminal penalties.–In the case of
                any failure by a taxpayer to timely pay any penalty
                imposed by this section, such taxpayer shall not be
                subject to any criminal prosecution or penalty with
                respect to such failure.
                    “(B) Limitations on liens and levies.–The
                Secretary shall not–
                          “(i) file notice of lien with respect to any
                      property of a taxpayer by reason of any failure to
                      pay the penalty imposed by this section, or
                         “(ii) levy on any such property with respect
                      to such failure.”.
    (c) Clerical Amendment.–The table of chapters for subtitle D of the
Internal Revenue Code of 1986 is amended by inserting after the item
relating to chapter 47 the following new item:
       “Chapter 48–Maintenance of Minimum Essential Coverage.”.
    (d) <<NOTE: 26 USC 5000A note.>>  Effective Date.–The amendments
made by this section shall apply to taxable years ending after December
31, 2013.
[[Page 124 STAT. 250]]