Manufacturers Support IPAB Repeal and Urge Health Care Reform to Address Costs

While manufacturers continue to seek broad-based relief from the onerous mandates and costs of the Affordable Care Act (ACA), Congress today will vote to repeal one provision of the ACA that ushered in an unelected and unaccountable board known as the Independent Payment Advisory Board (IPAB).  The National Association of Manufacturers (NAM) sent a key-vote letter in support of the IPAB repeal. The IPAB, specifically tasked to reduce Medicare costs, risked shifting even more costs to the private sector. For example, uncompensated care delivered by hospitals and physicians and uncollectable hospital debt are passed on to patients and employers who provide coverage. This leads to additional and unwarranted increases of manufacturers’ health care costs.

There are far better ways to control health care costs, achieve savings, reform inefficiencies and address long-term structural challenges that face Medicare programs. This is vitally important as health care spending is growing faster than both GDP growth and employee wages. If health care costs continue to increase at their current rates, the typical American family will spend half of their income on health care in 2030.

Unfortunately, we haven’t seen much discussion around health care expenses led by policymakers. Instead, a great deal of federal attention has been placed on the approximately 10 million Americans who receive insurance through ACA exchanges. However, a group recently convened by the Council for Affordable Health Coverage (CAHC) and American Action Forum (AAF) shed light on the importance of addressing key health care cost drivers like common chronic conditions, such as obesity and lack of consumer power, to appropriately price health service options like MRIs and knee replacements.

Manufacturers believe attention on health care costs is not only sorely needed but has also been missing from key policy discussions and debates over the past several years. Bending the health care cost curve is a goal that is shared by manufacturers around the country. The NAM is pleased that a thoughtful discussion is being led by the CAHC and AAF so that the health care community can better address expenses and other cost drivers by applying market-oriented and sound business principles. Old and prevalent models like fee for service are up for debate, and manufactures are ready to have a seat at the table as new health care payment models are discussed and deliberated.

Containing costs and the reducing the myriad challenges associated with providing health care to employees are top priorities for the NAM because 98 percent of NAM members provide health insurance to their employees. Manufacturers historically have led the business community in offering health benefits and are committed to continuing this tradition into the future. Congress should appreciate this kind of business community leadership and urge support for the right kinds of opportunities that will positively reshape and reform a complex but critical health care system.

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