Washington, D.C. — A Trump administration plan to expand access to GLP-1 weight loss drugs for Medicare and Medicaid patients has hit a wall — and the fallout is being passed directly to federal taxpayers.
The administration had designed a pilot program called BALANCE — short for Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth — to test whether covering obesity medications like Wegovy and Zepbound would improve health outcomes and reduce long-term costs. The structure required health insurers to sign up and share the financial burden. They largely refused.
According to industry reports, the program needed at least 80% insurer participation to proceed as planned. It fell short. UnitedHealth noted “notable challenges and outstanding questions” with the model’s structure on its first-quarter earnings call. CVS Health declined outright. The opt-in deadline passed earlier this week without enough takers to move forward.
Rather than abandon the initiative entirely, the Centers for Medicare & Medicaid Services pivoted. The agency announced it will extend the Medicare GLP-1 Bridge — a transitional program set to begin in July 2026 — through December 2027, with the federal government covering drug costs directly instead of routing payments through insurance plans.
What Changed, and What It Costs
Under the original BALANCE framework, drug manufacturers Eli Lilly and Novo Nordisk had agreed to sell their obesity drugs at $245 per month in Medicare and Medicaid — a steep discount from retail. Medicare beneficiaries were to pay $50 per month. The program was built to generate utilization data that would eventually justify broader Part D coverage of weight-loss medications.
That timeline is now pushed to at least 2028. CMS says it will use the extended period to collect data and share it with Part D plan sponsors ahead of any potential rollout of the full BALANCE program.
For nursing home residents, this matters more than it might appear. Obesity and metabolic disease are common among older adults and drive directly the kind of chronic conditions that fuel the already strained dynamic between Medicare payors and nursing home operators — heart disease, type 2 diabetes, and mobility limitations that push patients into skilled nursing facilities and drive up the cost of their care once there.
Why Insurers Said No
The hesitation wasn’t irrational. Under the BALANCE model, Part D plan sponsors would have been responsible for the gap between the negotiated drug price and the government’s benchmark — a difference some projected could reach into the hundreds of millions collectively. For companies already under CMS pressure over overpayments and prior authorization denials, adding an open-ended new financial commitment wasn’t a trade they were willing to make without stronger data.
The extension means Lilly and Novo Nordisk continue to benefit from government-backed coverage of their blockbuster drugs through at least the end of next year — without the broader insurer network that was originally envisioned. For patients who’ve been prescribed the drugs, the Bridge provides access, but the $50 monthly co-pay won’t count toward their Medicare deductible or out-of-pocket maximum under the transitional structure.
What Comes Next
CMS hasn’t announced a revised launch date for the full BALANCE program. The agency is collecting participation data from the Bridge period and plans to share it with insurers before asking them to commit again.
Whether that data is persuasive enough to bring large Part D plans back to the table remains an open question. If insurers stay out, the administration faces a harder choice: let the program expire after 2027, or push for a statutory change that removes Medicare’s longstanding prohibition on weight-loss drug coverage altogether.
Either way, the gap between what Medicare promises and what older Americans can actually count on keeps growing — and the facilities caring for the nation’s sickest patients are left watching to see how it plays out.
