Putting Medicare Consumers in Charge: Lesson from the FEHBP

In an unplanned natural experiment between two fundamentally different program designs, the federal government has operated two major health insurance programs side by side for nearly fifty years: Medicare and the Federal Employees Health Benefits Program (FEHBP). Until a recent government decision to place it in the same tax-preferred status as most private-insurer health insurance, the FEHBP consistently outperformed Medicare in cost control; it still outperforms Medicare in service, benefi…