Paul Ryan (photo courtesy of Creative Commons).

Ryan is working with Oregon Senator Ron Wyden to develop a framework that would preserve the government-run health program along with a variety of private plans. Medicare growth would be capped so that spending would not increase more than the growth of the economy, The New York Times reported.

According to the Times, the proposal would make major structural changes in Medicare and limit the government's open-ended financial commitment to the program:

Under the proposal, known as premium support, Medicare would subsidize premiums charged by private insurers that care for beneficiaries under contract with the government.

Congress would establish an insurance exchange for Medicare beneficiaries. Private plans would compete with the traditional Medicare program and would have to provide benefits of the same or greater value. The federal contribution in each region would be based on the cost of the second-cheapest option, whether that was a private plan or traditional Medicare.

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