CMS Extends Medicare’s Short-Term Bridge Program for GLP-1 Obesity Drug Coverage

Juliette Cubanski

The Centers for Medicare & Medicaid Services (CMS) has announced that its temporary program to cover GLP-1 drugs for obesity in Medicare, called the BALANCE model, will not launch as scheduled on January 1, 2027. Instead, CMS is extending the duration of a separate short-term program, called the Medicare GLP-1 Bridge, which was originally scheduled to run from July-December 2026 but will now run through the end of 2027. Under the Bridge program, eligible beneficiaries can get Medicare coverage of GLP-1s for obesity for a $50 copay.

Extending the short-term GLP-1 Bridge program is good news for eligible Medicare beneficiaries because it provides the certainty of obesity drug coverage at a $50 copay for a longer duration, but federal spending will also rise by some unknown amount since CMS hasn’t disclosed the projected cost. The cost to Medicare of covering obesity drugs under Part D has been estimated at between $25 billion and $35 billion over 10 years, which could have been a driving factor in the reluctance or unwillingness of major Part D plan sponsors to participate in the BALANCE model as it was originally designed.

While CMS sought robust participation of Part D plan sponsors in the BALANCE model, which was voluntary for plans, interest appears to have fallen short of the targeted level. Although GLP-1 drug manufacturers agreed to a $245 net price, a substantial discount off prevailing list prices, savings to plans from a lower price may have been insufficient to offset higher costs associated with an uptake in GLP-1 use for obesity treatment. Plans would also have been at some financial risk if their actual costs for covering GLP-1s were higher than they expected. Higher costs for Part D plans under the BALANCE model would have translated to higher federal spending and increased Part D premiums for enrollees, always a tough sell but especially so when the cost of health care, including prescription drugs, ranks as a top concern for many Americans.

Implementation of the BALANCE model in Medicare faces an uncertain future. CMS could opt to revise the financial incentives to make participation more appealing to Part D plan sponsors, such as by negotiating an even lower net price with manufacturers or taking other steps to shift financial risk associated with GLP-1 coverage away from plans. While CMS’s approach to Medicare obesity drug coverage after the short-term Bridge program ends is unknown, a financially sustainable solution for how to cover GLP-1 drugs for obesity remains elusive.