Here’s a very brief PDF summary of the Domenici-Rivlin Medicare proposal to the supercommittee.
Note, in particular, that the proposal is based on competitive bidding among Medicare-participating private plans and FFS Medicare (the public option). Above the bidding mechanism is an overall cap constrained to grow no higher than GDP+1%. The way I guess this would work is that competitive bidding sets the benchmark subsidy rate and a percentage of it is paid as premium support where that percentage is set so that overall spending is within the GDP+1% cap. This is a lot like the ACA exchanges, but with a public option.
Also note that the GDP+1% growth cap is established by averaging five years of GDP growth figures, addressing a concern I raised recently.
For more on the work of the Debt Reduction Task Force, headed up by Pete Domenici and Alice Rivlin, go here.