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Health Affairs, Vol 18, Issue 4, 25-39
Copyright © 1999 by Project HOPE

Journal Article

Moving Medicare to the FEHBP model, or how to make an elephant fly

Transforming Medicare into a Federal Employees Health Benefits Program (FEHBP)-type program holds the promise of more choice, lower costs (in the long term), and higher quality--a fine concept that will collapse in its implementation unless at least three conditions are met. (1) Congress gets the regulatory structure right and then refrains from annual tinkering, (2) Congress does not set unrealistic expectations regarding "cost savings," especially if a prescription drug benefit is added, and (3) administrative agency staff have the requisite training and a "privatizing" orientation. Given Medicare's history and the "Medicare-industrial complex," none of those conditions is likely to be met.

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