Just anecdotally, I am working on a claim dispute for a Medicare Advantage client this week where the total medical provider bills were just under $500,000. The Medicare Advantage plan paid about $11,000 to satisfy those claims in full. By contrast, a typical self-funded employer health plan or heath insurance plan would probably have paid at least $200,000 or more for that treatment. Granted, this is an extreme example, but it is true that Medicare pays providers far far less across the board than traditional health care plans pay for the same service.
The MAOs get the full benefit of the incredible provider agreements the fed gov has in place for Medicare, but typically tack on additional benefits and services, and they are run by Humana, UHC, etc. - bottom-line oriented for-profit entities. I think the public largely underestimates or misunderstands the reason the health care industry hates Medicare so much - its because they make less money whenever a Medicare beneficiary walks in.
Anyone who believes the cost of health care in our country is crazy out of control should be a huge fan of Medicare for everyone.