Paul Ryan has built the Republican response-budget (as in: the budget in response to the Administration’s budget) around Medicare.

It’s a 10 Year Plan, and its lynchpin is: making seniors pay more out of pocket until around 2024. (“If man is still allllliiiiive.“)

Here’s the key phrase: “Starting in 2024, we’ll offer eligible seniors a range of insurance plans from which they can choose—including traditional Medicare—and help them pay the premiums.”

This means that the bulk of the savings Ryan’s 10 Year Plan will realize will be because his budget strictly limits the payout to eligible seniors.

The U.S. News & World Report story correctly points out that Medicare payouts are “the single biggest strain on federal spending for the indefinite future.” According to the Congressional Budget Office, Medicare payouts are due to rise from $592 billion this year to nearly $1.1 trillion within a decade.

Ryan sees his 10 Year Plan as a way to keep costs under control through competition and more choices for patients — also known as How I Learned to Stop Worrying and Love the Free Market.

A breakdown of the Ryan Plan (courtesy of

1) Workers who turn 65 in 2024 or later would be able to choose between a variety of private health insurance plans, along with the traditional Medicare option. There’s a subsidy.

2) The subsidy would cover the cost of the second-least-expensive private plan or the Medicare option, whichever is less, in the first year.

3) After that, the subsidy increase would be based on a competitive bidding process, but the per capita hike would be no more than nominal GDP growth plus 0.5%. That currently works out to about 4.5% based on figures for 2012.

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