Local insurance companies would be much better at deciding how to pay doctors and hospitals to deliver quality care, he said.

Will the insurance company pay foreign hospitals and foreign doctors directly?

Under the House proposal, states could use the money to pay doctors and hospitals, rather than to buy insurance.

Insurers used to pay hospitals based on a semiprivate room rate.

Medicare spends $80 billion a year under the system used to pay most hospitals for inpatient care.

Months behind in paying doctors and hospitals, the company is struggling to catch up.

He has already proposed wiping out Federal rules that tell states how much they must pay hospitals.

They could use it to pay doctors and hospitals, to buy private health insurance or to expand Medicaid.

Many private plans would cost more than traditional Medicare because they pay doctors and hospitals more, the budget office said.

The proceeds, estimated at $650 million a year, are to be used to pay hospitals and doctors who care for people with no health insurance.