Future seniors could choose between traditional fee-for-service Medicare and the premium support system, which would offer them a fixed amount of money to buy private health insurance.
The premium support payment, which would be established through competitive bidding, would grow at a rate equal to economic growth plus 0.5 percentage points.
Such a system would limit federal spending on Medicare, whereas today there is no cap on what the government pays.
Ryan also wants to repeal major elements of Obama's health reform law, a move that would cut spending by an estimated $1.8 trillion. That's largely because he would repeal the new subsidies for Americans who buy their insurance on exchanges and he would repeal the expansion of Medicaid.
But Ryan wouldn't repeal all parts of the law. He has said that he would preserve the law's spending cuts to Medicare, saving more than $700 billion. But instead of using those savings to fund insurance subsidies he would apply them to deficit reduction.
Medicaid block grants: Ryan again proposes converting federal Medicaid funding for states into block grants and repealing the health reform law's expansion of the program to low-income, nonelderly adults.
Currently, spending on Medicaid is variable because of fluctuations in enrollment.
Block grants could increase the burden on states, but also give them more autonomy about how to set up their Medicaid programs. For example, a state could reduce how many people are eligible or increase enrollees' cost-sharing obligations.
Food stamp block grants: Ryan would also convert funding for food stamps to block grants to states and change the terms of eligibility by imposing time limits on participation and work requirements.
Currently, federal spending on food stamps varies because enrollment fluctuates.
Require federal workers to contribute more to savings: Federal civilian employees under Ryan's plan would have to contribute more money toward their retirement pension plans.
Matches the CBO on revenue: Ryan's budget would raise the same amount of revenue as projected by the CBO. Over 10 years, revenue would total $40.241 trillion.
Despite Republicans' lambasting of health reform for the taxes it raises to pay for insurance subsidies, Ryan's budget doesn't appear to explicitly repeal them.
Annual revenue would average 18.8% of GDP, slightly more than the 18.3% average over 40 years. In some years, revenue would go as high as 19.1%.
Reform the tax code: The Ryan budget calls on Congress to complete major tax reform by 2014.
Fellow Republican Dave Camp, chairman of the House Ways and Means Committee, in a letter last week itemized GOP priorities: simplify the tax code; reduce the number of individual income tax rates to two (10% and 25%); repeal the Alternative Minimum Tax; lower the top corporate tax rate to 25%; and change the rules for international taxation.
And, Camp added, "the committee will continue to oppose any and all efforts to increase tax revenues by any means other than economic growth."
--CNN's Deirdre Walsh contributed to this report.