Effectively, in my view, the answer is both. Others may disagree. But here is why I say so.
This is a link to the policy proposal Wyden and Ryan co-authored:
http://budget.house.gov/uploadedfiles/wydenryan.pdf
And this quote is from the bottom of page 7 and the top of page 9 of the proposal.
"As put forward by this proposal, the reformed Medicare program would allow future retirees (those who first become eligible by turning 65 on or after January 1, 2022) who choose the traditional fee-for-service Medicare plan to do so. Beginning in 2022, these seniors would also be given a choice of private plans competing alongside the traditional fee-for-service option on a newly created Medicare
Exchange. Medicare would provide a coverage-support payment either to pay for or offset the premium of the plan chosen by the senior, depending on the plan’s cost. The Medicare Exchange would provide seniors with a competitive marketplace where they could choose a plan the same way Members of Congress do. All plans, including the traditional fee-for-service option, would participate in an annual competitive bidding process to determine the dollar amount of the federal contribution seniors would use to purchase the coverage that best serves their medical needs. The second-least expensive approved plan or fee-for-service Medicare, whichever is least expensive, would establish the benchmark that determines the coverage-support amount for the plan chosen by the senior. If a senior chose a costlier plan than the benchmark, he or she would be responsible for paying the difference. Conversely, if that senior chose a plan that cost less than the benchmark, he or she would be given a rebate for the difference. Payments to plans would be risk- adjusted and geographically rated. Private health plans would be required to cover at least the actuarial equivalent of the benefit package provided by fee-for-service Medicare."
The language of this policy proposal (it was never a piece of legislation) makes it appear that fee-for-service Medicare would compete with other plans in the state exchanges.
Theoretically, seniors could stay on traditional fee-for-service Medicare, but its cost-growth restrictions would not make it more attractive than other plans, because, over time, it would pay for fewer and fewer services. Its primary function, as far as I can tell, would be to provide a "benchmark" that determined, on the basis of a cost-growth rate of the GDP+1% (far slower, mind you, then the long-established rate of health care cost inflation), how much private premium coverage support seniors now younger than 54 would be offered. In other words, what I see Ryan-Wyden doing is converting, by 2022, traditional Medicare into a largely private-plan premium support program from an independent fee-for-service government program. No real substantive changes from the ones Ryan proposed in his 2011 budget; I think he just inched up the private-plan premium coverage reimbursement by .5%.
Here, again, is the irony of it all in a nutshell. Ryan-Wyden essentially wants to convert Medicare into Obamacare for seniors. Wyden at least was consistent in his convictions by supporting this plan but voting for the ACA. Ryan, on the other hand, rails against the ACA for the general public, but thinks that, for seniors, the highest-risk, highest-cost pool of insured, the ACA framework is a good idea.