is that no one can make money selling health insurance to elderly people. They get sick too often. Every year a bunch of them die after running up big medical bills. Just to keep a 75 year old person healthy costs a lot of money in doctor's visits, drugs and preventative maintenance.
The Ryan plan gives seniors a voucher to buy insurance on the open market. It is a massive government intervention in the health insurance product. It creates a market for an inherently unprofitable product.
Every insurance company is going to want to collect as many of these voucher checks as possible. Every senior is going to have one and it will be worth thousands of dollar. But once the insurance company has the customer, the only way to make money is to minimize the care that senior gets. The result will be empty shell insurance plans: the best thing about the plan is the advertisements. It turns out that all sorts of unexpected things are not covered, and that the reimbursement rates are low.
After a while, the insurance company will cancel your coverage. Even with the voucher, they will start losing money on some people. Those people will go on the traditional Medicare system. However, the health care costs of the people on Medicare will be rising very rapidly; after all, the sickest seniors are on it. Some bright young GOP congressperson will be being praised in DC for having the courage to "tackle the tough questions about runaway Medicare costs." A new privatization plan will be offered with even bigger checks to the insurance companies. In the meantime, traditional Medicare will be a cheap dumping ground for sick and poor elders, with low reimbursement rates for overcrowded doctors and lesser hospitals.
Once a person gets even sicker and needs constant care, then a person moves into Medicaid for long term nursing care. But Medicaid will have been shrunk so much that many of us face a future of being warehoused in low quality nursing homes.
Now it may be that many of these abuses by insurance companies will continue to be curbed, under Obamacare. But if GOP has the votes to pass the Ryan plan for Medicare, you can be sure that Obamacare will be gone too.