Bridging the Gap: Understanding CMS’ Delay of the BALANCE Model and the Extension of the GLP-1 Bridge

The Trump administration has formally announced a delay of the Medicare Part D implementation of the Center for Medicare and Medicaid Innovation (CMMI) health model known as the Better Approaches to Lifestyle and Nutrition for Comprehensive Health or BALANCE model. Originally scheduled to launch on January 1, 2027, Medicare Part D of the BALANCE model will be put on hold until more data is collected on costs and health outcomes for the treatment of obesity in the US. In the meantime, CMS will extend the current Medicare GLP-1 Bridge program until December 31, 2027. The Medicare GLP-1 Bridge program was created to allow Medicare beneficiaries with serious obesity (with specified BMI and comorbidities) to obtain GLP-1s such as Wegovy and Zepbound with a fixed $50 monthly copay while the BALANCE Model Medicare Part D portion of the program was being developed. Under the current Medicare GLP-1 Bridge program, all Medicare Part D plans are required to cover GLP-1s for eligible beneficiaries. The terms of the current program will remain in place for the extended period of time.

Key Impacts

1. For Seniors: Direct access is preserved, but because the Bridge operates outside standard Part D, copays do not count toward the annual out-of-pocket maximum.
2. For Payers: They avoid immediate financial liability, as CMS will use a central processor to manage claims and payments.
3. For the Market: While the Part D model is paused, the Medicaid version of BALANCE is still moving forward, with implementation as early as May 2026.

The delay of the Medicare Part D portion of the BALANCE model will allow Medicare to gather information on costs and health results for obese individuals taking GLP-1s before deciding whether to allow these high cost medications to be included in the Medicare Part D formulary for all seniors.

Why It Matters

What is the BALANCE Model?

CMMI created the voluntary program, known as the Better Approaches to Lifestyle and Nutrition for Comprehensive Health (BALANCE) model for the “obesity coverage gap.”

In 2019, the first of the GLP-1s for obesity received FDA approval and several others have since followed. Most have received approval for treatment of related conditions such as heart disease or sleep apnea in the obese but pressure has mounted on CMS to cover these very expensive drugs for treatment of obesity in seniors. The fact that Medicare cannot cover weight-loss drugs by statute created a lot of pressure on CMS to allow coverage of these drugs for seniors.

The BALANCE Model. The program was created by the Center for Medicare and Medicaid Innovation (CMMI) in order to attempt to solve the so-called “obesity coverage gap” for individuals with obesity. Medicare Part D (PDPs) have historically not covered weight-loss drugs for a number of reasons. First, there has been a longstanding statutory prohibition on Medicare covering such treatments. At the same time, however, there have been a large number of individuals with obesity and related conditions for which GLP-1s (such as Wegovy and Zepbound) would be appropriate, treating conditions such as heart disease and sleep apnea, for example. As a result, there has been a great deal of interest in the development of a program that would allow obese individuals with related conditions to have access to weight-loss medications while they are still in Medicare Part D (through a PDP).

The Pivot: What is Changing?

This interim rule also announces that CMS will not implement the Part D component of the BALANCE model in 2028 instead of 2027 as previously planned. In the meantime, the Medicare GLP-1 Bridge program will be extended until December 31, 2027.

However, instead of pulling the plug on coverage of these medications for Medicare patients, the CMS has chosen to extend the Medicare GLP-1 Bridge program until the end of 2027. The Bridge program was originally intended to be a stop-gap measure until the Part D portion of the BALANCE model came online at the end of 2026.

1. BALANCE Delay: The voluntary model for Medicare Part D plans is delayed indefinitely from its 2027 start date. CMS cited feedback from insurers expressing concern about the lack of utilization data and potential instability in the Part D market.
2. GLP-1 Bridge Extension: To ensure beneficiaries aren’t left without options, the Medicare GLP-1 Bridge demonstration, originally a six-month stopgap for late 2026, has been extended through December 31, 2027.
3. Medicaid Proceeds: Interestingly, the delay does not apply to Medicaid. State Medicaid agencies can still opt into the BALANCE model as early as May 2026.

The High Stakes of Obesity Coverage

For one, as mentioned above, obesity is a very expensive disease to treat. While weight loss drugs may help to cut health care costs in the long run by preventing the need for diabetes treatment and avoiding heart disease and bypass surgery, there are many people for whom such drugs would be very cost effective. And at $10,000 or more per year for a single drug, such costs can add up very quickly. Even if a drug for obesity were to save $8,000 per year for every person taking it, for example, that would work out

Fiscal Sustainability

When treated with GLP-1s such as Wegovy, Semaglutide (Zepbound), tirzepatide (Trulicity), the obesity affected individual can expect to experience improved health, as GLP-1s have been proven in clinical studies to treat many serious and costly chronic diseases and in the long run may actually save the Medicare program (and other insurance companies) a lot of money in avoiding a lot of very expensive and preventable hospitalizations and avoid a lot of very expensive preventable obesity caused surgeries, such as bariatric surgeries. But the cost of the first year of these weight-loss medications is expected to be very expensive in the first year of use, for example, before weight loss has begun to occur or before other possible health improvements occur, so that these very expensive weight-loss drugs may be too expensive for most patients to afford for a couple of years. In the end, therefore, the biggest industry concern relating to this new approach to treating obesity in the Medicare population is likely to be the very high upfront cost of this new group of weight-loss drugs, a cost that may end up being too high for most patients in the first year or two of possible use, before potential weight loss and other health improvements actually occur, with resulting costs that could be so very expensive that they could possibly equal or even exceed the costs of treating obesity with current alternatives, such as with very expensive obesity caused bariatric surgeries and with expensive and frequent obesity caused hospitalizations, which are expected to be prevented by the use of GLP-1s.

According to recent analysis, in order to cover all Medicare beneficiaries with obesity for life with GLP-1s, it could cost between $25 billion and $35 billion over the next decade. Analysts within the federal government have apparently concluded that the potential cost of this very expensive medication for half the adult US population could potentially overwhelm the Medicare program and drive up the cost of all Medicare premiums for all seniors, thus the federal government is adopting a “measure twice, cut once” approach to the Part D aspect of the BALANCE Model.

The “Adverse Selection” Fear

The analysts concerned with the insurance companies’ adverse selection risks in the context of the BALANCE model were focused on two primary aspects: 1) that some plans would have opted to participate in the model and therefore include GLP-1s as Part D medications, and 2) that all patients using GLP-1s would have chosen the participating plans in order to receive the most cost effective medication. Such a situation could have “bankrupted” the participating plans while the rest of the plans could have taken advantage of the high margin priced products for obesity. Analysts were pleased that the use of the Bridge program to cover all patients using GLP-1s nationwide for up to 5 years will in the meantime negate these adverse selection concerns.

Clinical Eligibility: Who Qualifies?

The clinical criteria for clinical eligibility for obesity coverage in Medicare remains unchanged and will be used to gather data during the time that the drugs are covered under the “Bridge” program to determine whether the expected health benefits are actually achieved and to determine whether expected cost savings occur for treatment of related chronic diseases and their complications (e.g. heart disease, diabetes, strokes).

Who This Impacts

This will impact the entire healthcare system from your pharmacy to the corporate boardrooms of insurance companies.

1. Medicare Beneficiaries (Seniors and the Disabled)

A vast group of people is affected by this situation: the millions of seniors and disabled individuals with obesity-related diseases. While there are mixed feelings about this news, there is good and bad news for these people with obesity. The good news is that the Bridge program is going to be extended until 2027, creating a clear, nationwide pathway for the millions of seniors with obesity to get the obesity medications such as Wegovy and Zepbound on a $50 per month copay until 2027. But, the bad news is that the program is being operated outside of the Part D benefit. The $50 per month copay for these seniors does not count toward their True Out-of-Pocket (TrOOP) costs or toward their annual Part D plan deductible. In other words, these medications may actually cost these people with high costs of other expensive medications to take even more for these medications then they would pay for these very expensive medications if they were part of their Part D plan.

Note that GLP-1s are very expensive. So, for example, a Medicare beneficiary currently taking other expensive Part D medications would likely pay more for those medications under the terms of the Bridge program than they are paying currently for those medications. For instance, a beneficiary currently taking a Part D medication that costs him or her $500 per month would likely pay an additional $50 per month under the Bridge program for a GLP-1 that he or she has determined to be medically necessary and for which he or she has a $50 copayment, for a total of $550 per month. Such cost would not apply toward the beneficiary’s TrOOP or annual deductible.

2. Part D Plan Sponsors (Payers)

Other concerns that part D plans have would revolve around expected use of the drugs. The three largest part D plan sponsors pointed to expected use by current obese beneficiaries as a reason for concern regarding expected cost of GLP-1s. Some concern that only a few plans would offer GLP-1s as part of their BALANCE model and that these plans could be put at risk of bankruptcy by the large number of patients with obesity throughout the country using the plans to take GLP-1s while other plans would be very cost effective.

The delay of the BALANCE model until 2028 will hopefully prevent a “gold rush to enroll in plans that include GLP-1s”. Payers will have the opportunity to review the data from the drugs covered by the Bridge program for 2026 and 2027 and determine how best to cover these very expensive medications as part of their own risk pool. The Bridge program managed by CMS for the duration of the program will manage all payments for the covered GLP-1s on a nationwide basis and therefore remove risk from the payers for the duration of the program.

3. Healthcare Providers and Pharmacies

Pharmacies will process claims for patients in the Bridge program through a central processor designated by CMS as opposed to prior authorizations and claims processing through a patient’s insurance plan. In addition, Billing Instructions for pharmacies and providers will include new billing codes (BIN/PCN) for claims processed through the Bridge program. Also, providers and pharmacies will be required to adhere to very specific clinical criteria that have been established by CMS for patient eligibility of patients for the drugs included in the Bridge program as opposed to the various clinical criteria for patient eligibility that are required for individual drugs by the various insurance plans.

A new streamlined process will be established to approve and pay for claims for these very expensive drugs to ensure that a fast approval process is put in place to manage the distribution of these medications while also ensuring their appropriate use. There will be a central processor to manage the new claims process for the Bridge program drugs and health care providers and pharmacies will need to ensure that all required documentation is completed for each patient’s claims to be processed by the new processor. They will also need to become familiar with the BIN/PCN information that will be used for billing these new medications.

4. Pharmaceutical Manufacturers

Pharmaceutical Manufacturers. The pharmaceutical manufacturers of obesity medications will benefit from an extension of the Bridge program because the federal government will continue to buy large volumes of these very expensive medications. The net price that the manufacturers have agreed to for these weight loss drugs is approximately $245 per month for these very expensive medications for obesity treatments for this population. This is far below the typical list price for these same drugs for other indications and therefore is favorable to them.

What Changes

A New Timeline for Access

Next 2 Years. The extended life of the Bridge program helps to bring certainty to all stakeholders involved for the next 2 years until the balance model is released.

• May 1, 2026: The earliest date that State Medicaid agencies can begin participating in the BALANCE model.
• July 1, 2026: The Medicare GLP-1 Bridge officially launches. This is the date on which Medicare Part D beneficiaries who meet the BMI and comorbidity criteria can begin accessing Wegovy, Zepbound, and the recently approved Foundayo with a $50 copay.
• January 1, 2027: Originally, the start date for the BALANCE model in Medicare. This is now a “data collection” year. The Bridge program continues.
• December 31, 2027: The new expiration date for the GLP-1 Bridge.
• January 1, 2028: The earliest potential date for a permanent integration of GLP-1s into the standard Medicare Part D benefit (pending the results of the Bridge and BALANCE evaluations).

Technical Changes in Claim Processing

Payers are used to drugs being part of the Part D benefit and thus would typically have drug claim information that would count toward a beneficiary’s True Out-of-Pocket (TrOOP) costs for the year. The extended Bridge program drugs do not have claim information that would count towards a beneficiary’s TrOOP costs for the year. Also, drugs that are part of the Part D benefit would typically count toward a beneficiary’s annual deductible for the year. The extended Bridge program does not have drugs that count toward a beneficiary’s annual deductible for the year. Under the extended Bridge program, a beneficiary’s $50 copayment for these drugs would not count toward the beneficiary’s TrOOP costs for the year.

Under the extended Bridge program:

• The copay is fixed at $50 regardless of your “phase.”
• The claim does not go through your insurance’s pharmacy benefit manager (PBM).
• The pharmacist uses a special Medicare BIN/PCN to bill a central federal contractor.
• The $50 you pay does not help you reach your out-of-pocket maximum for the year.

Conclusion: A Measured Approach to a Medical Revolution

The delay of the BALANCE model is unprecedented in health care’s fast paced ‘revolution’. Extending the life of the Bridge program to 2027, CMS is attempting to strike a balance between the senior obese’s desperate need for these medications and the program’s financial solvency.

The extended duration of the program will give CMS time to gather data on how the expensive GLP-1s will be used by seniors with obesity and related comorbidities. This information will be critical in allowing CMS to develop a more informed strategy as to how to allow seniors with obesity access to effective weight loss drugs while protecting the solvency of the Medicare program. By gathering 18 months of data on the use of these expensive drugs for the treatment of obesity in seniors with related comorbidities, CMS will have a solid basis for developing a more informed strategy as to how to balance these two goals.

As weight loss drugs become available in July 2026, patients and their healthcare providers will find that prior authorization will be completed by a central processor and that documentation of the patient’s BMI and comorbidities in the patient’s medical records will be necessary. The new prior authorization process will likely be very different from what most patients are use to today.

References

1. https://www.cms.gov/medicare/coverage/prescription-drug-coverage/medicare-glp-1-bridge?utm\_source=costcurve.beehiiv.com&utm\_medium=newsletter&utm\_campaign=having-lost-its-balance-cms-is-now-walking-across-a-bridge-to-obesity-coverage-in-medicare&\_bhlid=44b17582d308b140832fd2aa02be21e06cee7b60
2. https://www.fiercehealthcare.com/payers/unitedhealthcare-aetna-tout-progress-standardize-prior-authorization-part-industry-wide