Tests the hypothesis that the Federal Employees' Health Benefits Program (FEHBP) has fostered an environment of competing health plans, especially preferred provider organizations (PPOs), in rural areas. There is a strong relationship between the number of FEHBP plans and areas with high population counts and high population density. In many counties with low population counts (under 3,000), most PPOs are not contracting with the nearest primary care provider. The authors conclude that the FEHBP is not a perfect predictor of Medicare Advantage (MA) plan activity because the MA program does not use the FEHBP approach of certifying regional plans that must offer local access. However, the FEHBP experience indicates that plans are attracted to areas with high population counts and high population density.