The first comments from Sen. Grassley about 75% going to beneficiary and 25% going to the Federal Gov’t is correct, but this refers to the difference between the MA carrier’s bid for A&B services and the Benchmark. For example, if the benchmark is 118% of Medicare and you bid 102% for A&B services, the difference (18%) by statute, gets split between the Medicare Beneficiary who gets 12% and the Federal Government gets the balance. Thus, the Insurance company gets 102% for A & B plus 12% for additional benefits (Cap on MOOP, lower cost sharing, value adds, etc.) for a total of 114% of FFS Medicare.
The insurance company makes money by delivering A & B services for WAY less than 102% of A&B and they can attract Medicare Beneficiaries by using the 12% as sweeteners which go to the Medicare Beneficiary.
So, in reality, it depends on how you look at it!
I think Mr. Grassley blew a perfect opportunity to elaborate more on Medicare Advantage and put it in words people could understand. If you watched the exchange when the president corrected the 75/25 split it was amazing but, he skimmed over it after that and missed a great opportunity. It would have been an ideal time to express why the extra is worth it. What the studies have shown about better outcomes, care, cost-savings in the end, ect. Another opportunity shot in the rear!