The Trump administration recently announced plans for a new voluntary payment model intended to increase access to GLP-1 drugs — a class of medications often used for weight loss and the treatment of diabetes and other chronic conditions — for certain Medicare and Medicaid beneficiaries.
How the Model Works
Under the BALANCE (Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth) model, the Centers for Medicare and Medicaid Services (CMS) will negotiate directly with participating GLP-1 drug manufacturers to lower prices. Negotiation areas can include guaranteed net pricing, out-of-pocket cost limits for beneficiaries, standardized coverage criteria across participating state Medicaid programs and Medicare Part D plans, and requirements to pair these therapies with broader lifestyle and nutrition interventions.
Coverage of GLP-1 drugs varies under the federal Medicare program and state Medicaid programs. While many GLP-1 drugs are currently covered by Medicare Part D and Medicaid when prescribed for certain conditions, such as type 2 diabetes, Medicare has been prohibited from covering the drugs solely for weight loss, and only 16 state Medicaid programs, not including Arkansas, cover GLP-1 therapies for obesity treatment.
Participation in the BALANCE model is voluntary for state Medicaid agencies, Medicare Part D plans, and drug manufacturers. Drug manufacturers seeking to participate in the model must respond to a request for applications by January 8.
Experts have had mixed reactions to the model. While some are optimistic that it will expand access to GLP-1 drugs for weight loss, others doubt the Trump administration will be able to negotiate lower prices than the insurance companies approved to offer Medicare Part D plans can and question how many state Medicaid agencies will choose to participate, given the long-term budget exposure associated with chronic use of high-cost drugs.
Rollout Timeline
The CMS Innovation Center plans to launch the BALANCE model for participating state Medicaid programs on May 1 and for participating Medicare Part D plans on January 1, 2027. CMS also plans to implement a GLP-1 payment demonstration model — a short-term initiative that will serve as a bridge to the BALANCE model — this July for participating Medicare Part D plans.
While the BALANCE announcement demonstrates the Trump administration’s intent to expand access to GLP-1 therapies, limited operational details are available at this time. CMS indicated that additional information, including eligibility rules and benefit details, will be released later.
The Trump administration has taken other actions aimed at lowering the cost of GLP-1 drugs. In November, the administration announced agreements with drug manufacturers Eli Lilly and Novo Nordisk to offer discounted pricing for two GLP-1 drugs — semaglutide (brand names Ozempic and Wegovy) and tirzepatide (brand names Mounjaro and Zepbound). Under these agreements, Medicare and state Medicaid programs will be able to purchase these drugs at reduced prices (around $245 per month), with Medicare beneficiaries’ out-of-pocket costs capped at $50 per month. The drugs will also be available at discounted prices through the direct-to-consumer online platform TrumpRx, which is expected to launch early this year.
More on GLP-1 Drugs and Weight Loss
GLP-1 drugs were initially developed to treat type 2 diabetes but have also been shown to be highly effective for weight loss. The drugs help to regulate an individual’s appetite by increasing feelings of fullness and slowing digestion. Large clinical trials have shown that newer GLP-1 therapies can lead to average loss of 15-22% of an individual’s body weight. GLP-1 therapies are also effective in improving cardiometabolic health, blood glucose control, blood pressure, and other obesity-associated health issues.
Thirty-nine percent of adults in Arkansas were obese in 2024. Among Arkansas public school children in 2024, 23% were classified as obese and 17% were classified as overweight.
In 2023, the Arkansas Division of Employee Benefits explored, but ultimately decided against, providing coverage of GLP-1 therapies for weight loss for Arkansas state and public school employees. Although approximately 40% of plan members were estimated to have obesity, the $83 million projected annual cost of the coverage was based on the assumption that only 10% of eligible members would utilize these therapies.
During Arkansas’s 2025 legislative session, Rep. Aaron Pilkington introduced House Bill 1332, which would have required Arkansas Medicaid to evaluate and document the cost of obesity-related conditions among enrollees and would have required health insurers to offer optional coverage for anti-obesity medications. The bill failed to advance out of a Senate committee.
For more, see our 2024 blog series discussing GLP-1 drugs and their use for weight loss.
