Competition Matters

The Federal Employees Health Benefits Program is a national model that to some extent resembles the [Affordable Care Act] exchanges. Both offer plans at the state level but are also overseen by the federal government. We examined the availability of plans and enrollment levels in the Federal Employees Health Benefits Program throughout the United States in 2010. We found that although plans were widely available, enrollment was concentrated in plans owned by just a few organizations, typically Blue Cross/Blue Shield plans. Enrollment was more concentrated in rural areas, which may reflect historical patterns of enrollment or lack of provider networks. Average biweekly premiums for an individual were lowest ($58.48) in counties where competition was extremely high, rising to $65.13 where competition was extremely low.

Health Affairs study on health programs.

Comments (4)

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  1. Alex says:

    Yep. Competition lowers prices. It’s a basic economic idea that so many people fail to grasp

  2. Brian Williams. says:

    If the FEHBP and exchanges in general are such a good idea for health care, why don’t they have similar exchanges for groceries, auto mechanics, or cell phone providers? Why does health care need a government-run exchange?

  3. brian says:

    People living in rural areas, especially need access to more plans and providers.

  4. Buster says:

    Since competition drives premiums down, why not let insurers compete across state lines? A national marketplace stands to do more for competition than having 50 different state bureaucracies.