CMS unveils BALANCE model to negotiate GLP-1 prices for Medicaid and Medicare
The voluntary model could expand Medicaid and Medicare coverage of GLP-1s for obesity at negotiated prices, but states, plans and manufacturers must choose to join and coverage is not guaranteed.
The Centers for Medicare & Medicaid Services on Dec. 23, 2025, announced a voluntary five-year program called BALANCE that would have the agency negotiate GLP-1 prices and coverage terms with drugmakers on behalf of state Medicaid agencies and Medicare Part D plans [1][2][3]. Medicaid coverage could begin as early as May 2026, and CMS says eligible Medicare beneficiaries would pay $50 for a month's supply of drugs such as Wegovy and Zepbound [1][2].
How the model works
BALANCE stands for Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth [2]. Under the model, CMS negotiates guaranteed net prices directly with manufacturers and sets standardized coverage criteria, and it may cap out-of-pocket costs [1][2]. Participation is voluntary for manufacturers, states and Part D plans [1][2]. Every Medicaid beneficiary who receives a GLP-1 for weight management through the model would also get a lifestyle support program, provided by the manufacturer at no cost, during and after treatment [2].
The listed drugs are all formulations of Mounjaro, Ozempic, Rybelsus and Wegovy, the KwikPen formulation of Zepbound, and Foundayo, for both currently covered indications such as type 2 diabetes and for weight management [2]. Mounjaro and Zepbound are tirzepatide; Ozempic, Wegovy and Rybelsus are semaglutide; Foundayo is orforglipron [2]. To qualify, a product must be approved by the FDA for weight management — or be expected to be by Jan. 1, 2027 — act as a GIP, GLP-1 or glucagon receptor agonist or a combination, and have clinical evidence of at least 9.5% average weight reduction at an FDA-approved dose in a randomized trial [2].
Timeline and prices
State Medicaid agencies can join the model beginning in May 2026 through Jan. 1, 2027 [2]. CMS will run a separate short-term Medicare GLP-1 Bridge from July 1, 2026, to Dec. 31, 2027, giving eligible Part D beneficiaries access to certain GLP-1 drugs at administration-negotiated prices [1][2].
The accounts differ on Medicare. Reuters reported the model would launch for Medicare in January 2027, and KFF described Part D implementation in January 2027 after the short-term demonstration [1][3]. CMS's own page refers to "potential implementation of BALANCE in Part D," asks what the impact is of the model "not launching in Medicare in 2027," and says the Bridge was extended through the end of 2027 [2]. A firm date for Part D participation has not been announced.
Prices build on a November 2025 agreement involving the Trump administration, Eli Lilly and Novo Nordisk: $149 per month to the government for the weight-loss pills the two companies are developing, and $245 per month for currently available injectable GLP-1s used for diabetes and other covered conditions [1].
Why it matters for patients
Coverage of GLP-1s for obesity is optional in Medicaid. As of January 2026, 13 state Medicaid programs covered the drugs for obesity under fee-for-service, down from 16 in a survey covering October 2025, after California, New Hampshire, Pennsylvania and South Carolina ended coverage and North Carolina reinstated it in December 2025 [3]. Because enrollment is voluntary, a state or plan that does not join BALANCE would see no change. CMS says patients would still face qualifications set in negotiations, including certain prior authorization requirements, and that the model "will not guarantee coverage for any individual" [2].
Medicare is generally prohibited by law from covering weight-loss drugs, which is why CMS is using a demonstration rather than a standard benefit [3]. Medicaid enrollees already pay little or no copay for prescriptions, so lower drug prices do not directly change their out-of-pocket costs [3]. KFF notes that how the new prices compare with what state Medicaid programs already pay, and whether long-term savings from obesity treatment appear, remain unclear [3].
What happens next
State Medicaid programs and manufacturers were asked to submit their intentions to participate by Jan. 8, 2026 [3]. Medicaid coverage could start in May 2026 [1][2]. The Medicare GLP-1 Bridge is set to run from July 1, 2026, through Dec. 31, 2027 [2]. CMS says more information on the Medicare payment demonstration will be available before it begins; which states, plans and manufacturers have agreed to take part has not been disclosed [2].
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