I assume a retired federal employee covered by Medicare has Medicare as primary payer. FEHB is a good program and provides good protection to millions of federal employees - active workers and retirees. But over a long period of time, premiums under FEHB have risen at the same rate as Medicare per person costs and private health insurance premiums. Medicare has an excellent record of achieving low administrative expenses, and offers substantial managed care plan options for those beneficiaries preferring care from those plans. Radical restructuring of Medicare to put beneficiaries financially at risk for premiums in excess of Medicare payment to plans may not work for a sicker, older population.
Most federal employees are younger and healthy.
Since plans have a strong incentive to avoid marketing to sicker, chronically ill patients or providing specialized care designed to meet their needs, they may not have an advantage over traditional Medicare. Older federal workers who held jobs in the private sector for part of their careers or were married to private sector workers also are eligible for Medicare. Some people say that's because Congress always keeps the best for itself, but the real reason lies in the contrast between the way benefits are changed over time in the two programs. Under current law every major new or changed Medicare benefit requires an act of Congress and a political fight. Senator Breaux wants the same system in Medicare.