Good news, there is no need this year for the Independent Payment Advisory Board to meet. IPAB is an entity created by Obamacare that is designated to make payment reforms to Medicare to bring down the rate of Medicare spending inflation to the general rate of growth in the economy. Congress can overrule IPAB’s recommendations if they come up with a seperate plan that saves as much or more than IPAB’s plan.
However IPAB is not needed when medical inflation for Medicare is beneath the rate of economic growth. And that is what is happening.
Prices for personal consumption expenditures (PCE) on health care goods and services rose just 1.1 percent over the twelve months ending in May 2013, the slowest rate of increase in nearly 50 years. The slowdown in PCE health care inflation has been widespread…
Data from the Bureau of Labor Statistics’ Employer Costs for Employee Compensation survey indicate that for private sector employers offering health insurance, the annualized growth rate of real (inflation-adjusted) costs for workers’ health insurance has slowed from 2.2 percent a year from 2006:Q4 to 2009:Q4 to 1.8 percent a year from 2009:Q4 to 2012:Q4
What this means, if it is a sustainable trend, is systemically, health care is going from a red alert, going to destroy the federal budget, apple pie and day/night doubleheaders to a medium size problem that needs consistent monitoring, tinkering and experimentation. CBO is figuring federal Medicare/Medicaid committments in 2020 are $200 billion less than what they projected a few years ago. As the saying goes, a few hundred billion here, a few hundred billion there, and sooner or later we’re talking about real money.