Speaker Nancy Pelosi and a number of other Democrat leaders continue to press for a public insurance plan (i.e., a government-run insurer) in health care reform.  They argue that a public plan is necessary to provide consumers with “choice” and to “keep insurance companies honest.” It’s hard to imagine that Ms. Pelosi and colleagues believe their own rhetoric.

For decades Federal employees and members of Congress have purchased their health insurance through the Federal Employees Health Benefits Program (FEHBP). Under this program, numerous private insurers compete for employees’ business subject to oversight by the federal Office of Personnel Management. The FEHBP is generally acknowledged to work very well, with high levels of employee satisfaction.

While a public plan would be useful if the the objective is to crowd out private health insurance and move towards a single-payer system, the FEHBP proves that a public plan is not needed to provide choice or keep insurance companies honest.

(A new book by Walton Francis, Putting Medicare Consumers in Charge: Lessons from the FEHBP (AEI Press, 2009), provides a user friendly description and history of the FEHBP and compares the program to Medicare.)