President George W. Bush will propose sweeping changes to Medicare in his State of the Union address, and maybe to employer-provided health insurance too. He wants choice and markets to replace bureaucracy, and will use the existing Federal Employees Health Benefits program as a model for reform. Nothing would improve health insurance more; but beware: Congress will do its best to turn it into a bureaucratic replica of Medicare. I know. I ran FEHB and the politicians cannot resist meddling.

My very first crisis resulted from the previous administration's decision to set the rates for the private plans in the FEHB artificially low, so its 10 million employees and retirees did not have to pay higher premiums in an election year. A $30 million shortfall required a special appropriation from Congress to cover the deficiency or go to jail. How could this happen in a market plan that allows any company to offer insurance and any employee to pick any plan he or she desires? Well, the government checks the rates the private insurers charge to assure they are "fair." This allows it to dictate the rates and change them for political advantage. Congress will insist costs be fair [i.e. politically palatable] and will demand this in the president's plan too, even if he does not want it. FEHB provides a uniform payment to every employee to purchase insurance. One can purchase a no-frills plan completely covered by the payment or buy the Lexus and add his own funds to cover the balance - or something in between. This is the proper way to put the consumer in charge but politicians push to increase the payment so people can get better coverage at no cost, which busts budgets. If funding rules this out, they allow only one or a few no-frills plans so rich and poor get the same, even with little choice. Or they reimburse the rich doctors or hospitals less than the market to keep premiums lower for the poor. If the physician can bill the rich above the government reimbursement, however, the poor will still get lower benefits. So, they forbid the doctor to bill more than the government fee schedule. If all this ends up in the president's bill, Medicare will have been reinvented, with the same insolvency, physicians refusing to accept government-covered patients or going on strike, and growing lines to visit the doctor.

Well, it would still have private insurance companies - but will they be allowed to refuse coverage or to increase premiums for the ill and dying or is this "picking on the most vulnerable"? The politician's solution is "community rating," where all applicants pay the same premium. But this leads some companies to be burdened with higher claims. Should those with such "adverse selection" be subsidized by government? Or should the ill receive a larger government payment - but, then, what happened to the everyone-gets-the-same-payment rationale for the whole program? Or is this a separate welfare problem, with all of the problems being pushed to Medicaid?

What about the type of benefits? Should abortion, cloning, artificial insemination, psychological counseling for minor depression, be guaranteed, not allowed or left to insurers? What about drugs? They are the dynamic that is pushing reform so they almost certainly will be required of insurers. Then why not require every other medical specialty - who would politicians leave out?

What about "preventive care" for children and the young, which not being a medical loss covered by risk analysis, destroys the whole "insurance" nature of the program? But try explaining that to average citizens. Pretty soon the government is determining all the benefits, not the private companies.

The most rational plan for an efficient health market is to roll Medicare, Medicaid, employer-provided insurance, and the deductions for the self-employed together into one massive tax credit and refundable voucher and keep the government out, which is what the president wants. But once the costs appear on the government's books, politicians would worry too much was being spent and propose a cap on total government payments. To keep under the cap, expensive procedures would have to be rationed to the most deserving instead of those who will die or are less worthy.

All of a sudden, the Hillary Clinton health plan has been recreated - only this one could be even more universal. Yes, the current health-payment system is a mess and needs reform, and yes a uniform payment or tax credit to purchase private insurance is the best solution. Unless the president goes into battle willing to say no to Congress on some nice-sounding details, however, he could end up with a worse devil than Hillary's, with an equally destructive political firestorm in its wake.

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Donald Devine, former director Of the U.S. Office of Personnel Management, is a columnist and a Washington-based policy consultant and a Vice Chairman for the American Conservative Union.