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Spending levels for people in the traditional Medicare program are expected to rise by 4.5% in 2021, the Centers for Medicare & Medicaid Services said in a memo sent this week.

Why it matters: This growth rate is the key number government actuaries use when figuring out how much to pay Medicare Advantage plans, Bob writes.

• A 4.5% rate “is a very strong starting point for reimbursement and a continued reflection of a MA-friendly Republican administration,” health care analysts at Barclays wrote to Wall Street investors.
• The early estimate also is almost always revised higher once final rates are released in April, meaning another large pay raise is in store for insurance companies that sell MA plans.

Go deeper: The war over Medicare Advantage audits heats up