Is Ryan’s Medicare Plan Similar To Employer Sponsored Coverage?

Over on Ezra Klein’s blog, Austin Frakt of the indispensable Incidental Economist argues that after comparing Rep. Paul Ryan’s (R-WI) Medicare plan to Medicare Part D and the Federal Employees Health Benefits Program (FEHBP), Republicans finally stumbled upon an analogy that actually works: employer-sponsored health insurance. The quote came from Rep. Eric Cantor (R-VA) speaking Sunday on CBS’s Face The Nation:

HARRY SMITH (overlapping): But the– but the question becomes, is it– is the voucher the answer? Is that the only answer? Because, if I understand it correctly, I get a voucher and then I have to go out on the marketplace and hope I’m going to get the insurance I need. And if that’s the– that’s the case, you’re talking about medical rationing. You’re talking about going to insurance companies to– to get what you hope you– you deserve.

REPRESENTATIVE ERIC CANTOR: Well, Harry, I’m– the– the– the reforms that we put forward would apply to everyone fifty-four and younger. And again, what it does is it reforms the program to ensure its still there. And it is much like what most people have with their employer plans. That they are by the employer given the benefit but then choose from a variety of plans out there that best fit their family’s needs. So it’s an attempt to try and personalize the– the Medicare program to allow seniors to choose much like they have with the Medicare Part D program–

As Frakt points out, Cantor is right in the sense that like Ryan’s premium support vouchers, the employee contribution to health care has “increased much faster than inflation or wages.” “[P]remiums are consuming a larger portion of workers’ resources. For many, they’re becoming unaffordable. That’s exactly what will happen to beneficiaries under the Republican plan for Medicare,” he writes.

All this is true, but I would also argue that employees are currently much better off than seniors who become eligible for Ryan’s vouchers. Even as their share is increasing, employees aren’t going up against insurers all by themselves. They’re part of a group health care plan which — if the employer is large enough — can help defray increases, spread risk and cost, and shield the policy holder from other insidious practices that insurers often deploy against the individual consumer.