Medicare works for many reasons, one of them being that its volume of beneficiaries gives it better bargaining power when negotiating rates with providers. This feature keeps costs down for both the government and the beneficiary. Under the Ryan 2013 plan, private insurers would cherry pick the younger, healthier and less expensive beneficiaries. Leaving Medicare with a disproportianate share of the oldest, sickest and costliest beneficiaries would drive up costs for the program and set it on an unsustainable path.
Source: Alliance for Retired Americans