New advisory board could help control Medicare costs

The cover of a booklet provided at an informational meeting on the Medicare drug prescription program in Sun City, Ariz.

STEVE CHIOTAKIS: Congress is set to vote today on the House Republican's long-term deficit reduction plan. That's the one that would transform Medicare into a voucher program.

But President Obama has his own recipe for Medicare savings. Which relies in part on a special Medicare board set up under the new health care law.

Marketplace's Nancy Marshall Genzer tells us what the board would do.


NANCY MARSHALL GENZER: The Independent Payment Advisory Board is supposed to be powerful. If Medicare costs rise above a set target, the board can recommend cuts to Congress. They'll go into effect automatically, unless Congress votes them down.

LEIGHTON KU: It was really designed to be, essentially a hammer.

Leighton Ku teaches health policy at George Washington University.

KU: Here's a board that will come up with some painful decisions that will bring costs down.

The board can't restrict benefits. Board members will be experts in health finance and management. It may seem a little weird to have outsiders telling Congress what to do.

But it makes sense to Boston University health economist Austin Frakt. He says the board shields Medicare from political pressures that can prevent cuts.

AUSTIN FRAKT: If we allow Congress to manage health care costs they just go up and up and up and up.

The board is scheduled to be up and running in 2013.

In Washington, I'm Nancy Marshall Genzer for Marketplace.

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