I don’t know enough as I’d like about the Federal Employees Health Benefits Program (FEHBP). In particular, I’d like to learn more about how it is actually governed and run, in contrast to Medicare Advantage, and what the results are for costs.
I’ve just spent a half hour poking around and this is what I’ve found so far:
A questionable Wikipedia entry. Read it. It is very pro-FEHBP and anti-Medicare. It is misleading about Medicare in at least one place, saying there is no bargaining with providers by original Medicare. That’s true but ignores Medicare Advantage, which do bargain with providers (excluding PFFS plans) . I’m not saying the entry is factually wrong (I admit I don’t know enough to judge). I’m just saying it seems very one-sided.
Some info from Commonwealth. Here are a few bits from a longer Commonwealth paper on FEHBP:
Since 1969, FEHBP has experienced slightly lower premium growth per enrollee than private health insurance overall (10.6% vs. 11.0%) but higher growth than Medicare (8.9%). … In the last four years, Medicare has outperformed FEHBP by a far greater margin, with premiums growing at only about one-third the FEHBP rate. …
[T]he savings FEHBP achieves through competition have not been greater than savings from Medicare’s system. …Although FEHBP has operated with little government intervention, its spending is only about one-tenth that of the Medicare program. It seems unlikely that government policymakers will remain immune from plan and provider pressure if the stakes are raised to Medicare’s level.
Based on data comparisons over 28 years, the FEHBP ties Medicare in cost control without regard to benefit changes over time. Taking into consideration these benefit adjustments, FEHBP costs, as with private-sector insurance generally, have increased less than Medicare costs over most or all of the life of the Medicare program.
I’m sure I am missing some good documents on this topic. Do you know of any?
Later: This post has been edited to reflect corrections suggested in the comments.
