The Trump administration has announced a new voluntary payment initiative aimed at expanding access to GLP-1 drugs — medications commonly used to treat type 2 diabetes and promote weight loss — for select Medicare and Medicaid beneficiaries.
Called the BALANCE model (Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth), the initiative allows the Centers for Medicare and Medicaid Services (CMS) to negotiate directly with participating GLP-1 drug manufacturers to lower prices. Negotiations may cover guaranteed net pricing, caps on out-of-pocket costs for beneficiaries, standardized coverage across participating state Medicaid programs and Medicare Part D plans, and requirements to pair the drugs with broader lifestyle and nutrition programs.
Coverage of GLP-1 therapies currently varies. While many of these drugs are covered under Medicare Part D and some state Medicaid programs for conditions such as type 2 diabetes, Medicare has historically been barred from covering them solely for weight loss. Only 16 state Medicaid programs — excluding Arkansas — currently cover GLP-1 drugs for obesity treatment.
Participation in the BALANCE model is voluntary for state Medicaid agencies, Medicare Part D plans, and manufacturers. Drugmakers interested in joining must submit applications by January 8.
Experts have expressed mixed views on the initiative. Supporters argue it could expand weight-loss treatment options, while critics question whether the administration can negotiate prices lower than private insurance plans and whether state Medicaid agencies will participate given the long-term costs of chronic therapy.
Timeline and Next Steps
CMS plans to roll out the BALANCE model for participating state Medicaid programs on May 1, 2026, and for Medicare Part D plans on January 1, 2027. A short-term GLP-1 payment demonstration will begin this July for Medicare Part D participants, serving as a bridge to the full BALANCE model.
Further operational details, including eligibility requirements and benefit specifics, will be released by CMS at a later date.
Additional Measures to Reduce GLP-1 Costs
In November 2025, the administration struck agreements with Eli Lilly and Novo Nordisk to provide discounted pricing for GLP-1 drugs semaglutide (Ozempic, Wegovy) and tirzepatide (Mounjaro, Zepbound). Under these agreements, Medicare and participating state Medicaid programs can purchase the medications at reduced costs — approximately $245 per month — with beneficiaries’ out-of-pocket expenses capped at $50 per month. The drugs will also be sold at discounted rates via the upcoming TrumpRx online platform.
GLP-1 Drugs and Their Health Benefits
Originally developed for type 2 diabetes, GLP-1 therapies have proven highly effective for weight loss by regulating appetite and slowing digestion. Clinical trials indicate these medications can reduce body weight by 15–22% on average. They also improve blood glucose control, cardiovascular health, and other obesity-related conditions.
Obesity remains a significant public health challenge. In 2024, 39% of adults in Arkansas were classified as obese, while 23% of public school children were obese and 17% overweight.
The BALANCE model signals a major federal effort to increase access to GLP-1 therapies for both diabetes management and weight loss, though questions remain about participation and long-term cost implications.
