Choice and competition work in health care. Unfortunately, most of us aren't lucky enough to have access to a market driven and shaped by them.

This year employer health-care costs have risen 7.7 percent, according to a Kaiser Family Foundation survey, more than twice the rate of inflation or workers' wage growth. This is lower than it's been in recent years (costs rose almost 14 percent in 2003). But health costs are still high -- and likely will go even higher next year.

Some of your fellow citizens are luckier. This month, millions of federal workers and retirees, including members of Congress, get to pick and choose their health plans for 2007. According to the Office of Personnel Management, which runs the civil service, their insurance premiums will rise, on average, just 1.8 percent. About 63 percent of them will see no premium hike at all.

These Americans are enrolled in the Federal Employee Health Benefits Program (FEHBP), a consumer-driven system in which many different carriers offer a choice of 284 private plans nationwide. FEHBP plans include a variety of benefit packages, including health-savings accounts. The bottom line: Feds get high quality care at competitive prices. No wonder they're highly satisfied.

The FEHBP isn't the only example where intense competition works. Another, paradoxically, is Medicare. The overall cost of the new Medicare drug benefit is a serious problem, but at least drugs are being delivered to seniors through competitive private health plans. The result: lower drug prices. When the drug benefit was enacted, the projected average monthly premium was $37. Now, intense competition among competing plans has brought this under $24 per month, nearly a 40 percent reduction, accompanied by growing patient satisfaction. That's what choice and competition can deliver.

Most of us have never been near a competitive health-care system. You get insurance through employers or through highly regulated health-insurance markets overseen by state officials. You get what they give you.

Sure, if you work for a big company with a large, tax-free benefits package, you typically get a choice of health plans, usually three or four options designed by the same insurance company, often having the same network of doctors and other health professionals. So competition is very limited. Alain Enthoven, a nationally recognized health policy expert at Stanford University, estimates that only 23 percent of Americans has a choice of insurance carriers, with different networks or delivery systems.

If you work for a small company, you often get a choice of one health plan -- or none. In fact, about 80 percent of all firms offer only one choice of health plan. True, you could buy a different plan on your own. But there's the rub. Unlike the plan you get through your employer, you must pay for it with after-tax dollars. The loss of this tax break alone could add up to 50 percent to the cost of an equivalent benefit package that you would have gotten from your employer. Few can afford that.

Some members have come up with innovative ideas to introduce competition into the health-care system.

The first idea is fairness in the tax code. Sens. Mel Martinez, R-Fla., and Tom Coburn, R-Okla., are sponsoring the Tax Equity and Affordability Act, a bill to provide an income-tested, individual health-care tax credit for individuals and families who do not or cannot get health insurance through their jobs. Providing tax relief to families (worth up to $4,000 annually) would enable them to buy the health plans of their choice -- plans that would have to compete directly for their dollars. That's what private plans must do in the FEHBP.

The second idea is breaking down barriers to competition across state lines. Sen. Jim DeMint, R-S.C., and Rep. John Shadegg, R-Ariz., have introduced the Health Care Choice Act. Their idea: If you don't like the health plans in your state, you should be free to buy a better and more affordable health insurance policy from another state. That way, Americans could enjoy a national market in health insurance, just as they enjoy a national market for other goods and services. Again, today, only federal workers and retirees have anything like a national market for health insurance.

It's an open secret on Capitol Hill, of course, that big insurance companies and their congressional friends strongly oppose that kind of competition. After the November elections, perhaps Congress will get serious and put the common good of millions of Americans over the special interest of a few who fear a genuine free market in health care.

Robert E. Moffit, Ph.D., is director of the Center for Health Policy Studies at The Heritage Foundation (heritage.org).