Medicare doesn't have prescription drugs. All of these plans have prescription drugs. There are hundreds of nuances in which the FEHB program is better than Medicare because plans that don't have nuances don't keep customers. The HMO penetration has stopped and has been basically level at around 40 percent for the last decade. But the percent in managed care as a whole has gone from 40 percent to 99 percent.
People always choose the best combination of plan costs, features, and service.
Under the FEHB program, we charge one rate whether you're in Massachusetts or you're in Iowa. These would drive up costs, creating an adverse-selection problem. Employers would have similar concerns, says Astuto. So you get an adverse-selection issue. While the government could possibly act as go-between in any effort to expand the program, the OPM itself has its hands full.