WASHINGTON -- Months after they hammered Democrats for cutting Medicare, House Republicans are debating whether to relaunch their quest to privatize the health program for seniors.

House Budget Committee Chairman Paul Ryan, R-Wis., is testing support for his idea to replace Medicare with a fixed payment to buy a private medical plan from a menu of coverage options.
In all the "I hate the evil insurance company talk", this fact gets lost. The Medicare advantage plans offered by the selected insurance companies (selected by the gov) is one of the most successful blend of corporate power with government oversight there has ever been.

This is my area of occupation, so I can cut through all the extreme party rhetoric and tell you how it works.

Medicare guidelines tell the insurance companies what their Medicare plans have to cover. Basically every thing that Medicare covers. There are no pre-exsisting conditions in Medicare. Healthcare providers are paid the prevailing Medicare rate, set by the government. And sometimes even a little bit more, depending on the provider's negotiating power for their contracts.

The approved companies offer various types of Medicare plans (PPO, HMO, Private Fee For Service, etc) across state lines, so they have to compete with each other. The plans a lot of times offer extra benefits that regular Medicare doesn't like gym memberships, disease management programs, 24 nurse hotlines, and the like. Each year Medicare has to approve a plan's benefits before it is offered to seniors.

If a senior gets a plan from a certain company but doesn't like it, then the next enrollment period (once a year) they can either switch to another plan offered by that company in their area or switch to a completely different company.

It really is government controlled competition at it finest. It necessitates efficiency. Companies do alot more things better and more efficiently than government Medicare. They are also way, way better at finding and fighting fraud than the government is.