Ryan wants to replace medicare with block grants with which the poor  obtain health insurance.

Can carriers charge less for health insurance than the Government?

No. the Govt doesn't have to earn a profit to provide an ROI for its shareholders.

Will carriers be able to provide health insurance at a loss because it will be offset by profit on the premiums from  the healthy young?

No Those healthy young won't be mandated to buy coverage. So they won't . So the carriers will have to price their elderly policies  to pay for themselves Plus a profit. See above.

Will those grants be sufficient to obtain insurance? 

If they  were there'd be no point in issuing them. Ryan's reason for issuing grants is to save the Gov't from the actual costs, which he expects to be higher.Repeat Ryan proposes to issue grants which won't cover the actual costs .

Will the elderly be able to exercise consumer choice?

Sure

Can they use that bargaining power to halt the rise of medical costs?

As individuals , certainly not. Try reading Kenneth Arrow's never rebutted  1963 analysis which explains why. Ryan probably has and has decided to ignore it because it suits him to lie.

So what will happen to medical costs?

They'll go up faster than under Obamacare under which the carriers will have bargaining clout.

So it's Ryan's intention to replace Medicare with a system that by definition will be inadequate to cover  the actual medical costs .Which patients will have no ability to lower ,never mind paying the  high cost of insurance to cover this high risk segment. Accordingly those underlying costs will increase at a faster rate than under Obamacare . The elderly rich will self insure. The elderly poor will die early after suffering pain they will not be able to afford to combat.

True?

Yup.

Why is Ryan proposing this?

He's evil or dumb.