Paul Ryan Medicare Controversy: What Does It Mean For You?

Democrats say GOP vice presidential candidate's plan will end the program.
3:00 | 08/14/12

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Transcript for Paul Ryan Medicare Controversy: What Does It Mean For You?
about tonight is medicare, and paul ryan's controversial plan to change the program. Republicans called the change a life line for medicare. Democrats say it will end medicare as we know it. So we asked abc's jon karl or a reality check on the plan and what it would change for each of us. Reporter: The first thing you need to know about the ryan plan is this, it does not apply to anybody who is now 55 years old or older. Today's seniors stay in the current system. For everyone else, when you hit the biggest change, instead of automatically getting government health coverage when you turn 65, you'll have to go out and shop for your own insurance. To start, the amount would be pegged to cost of medicare, now approximately $15,000 a year. Wealthy seniors get a smaller amount, the poor and sick, a larger amount. You choose from a menu of private but government-approved health plans. One of your options would also be traditional government-run medicare. The prices of those plans would vary. More coverage costs more money. For any plan that costs over $15,000, you pay the difference. If your plan costs less, you get cash back. For example, if the plan you choose costs $14,000, you get a check in the mail for $1,000. The amount you get to buy health insurance will rise slightly each year at a rate just over inflation. Will that be enough for to you pay for health insurance? Only if health care costs stop rising as fast as they've been rising. Ryan believes costs will come down because insurance companies will have to compete to get your medicare dollars. That's possible. But there's no guarantee. Jonathan karl, abc news, washington.

This transcript has been automatically generated and may not be 100% accurate.

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