The Centers for Medicare & Medicaid Services (CMS) on Wednesday announced a postponement of the Medicare Part D component of the Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth (BALANCE) model, moving implementation to 2027 to "allow data collection that would support a more effective potential implementation." The step follows reluctance from some health insurers to join the program under its current design.
To maintain access while the delay is in effect, CMS will operate a bridge program from July 1, 2026 through December 31, 2027. That program will allow beneficiaries to obtain obesity medicines at prices negotiated under the administration's agreement with Eli Lilly and Novo Nordisk.
Regulators said the extension of the bridge program eases immediate uncertainty about how these GLP-1 weight-loss drugs will be reimbursed and should blunt any short-term hit to demand. However, analysts cautioned that an indefinite postponement of the Medicare Part D pilot limits visibility on how and when obesity medications would be permanently incorporated into Medicare prescription drug plans.
J.P. Morgan analyst Chris Schott expressed a longer-term view, saying: "once this obesity benefit is established, we believe it will be practically and politically difficult to roll back as we look toward 2028 and beyond."
Insurer participation has been uneven. CVS Health confirmed it did not opt in to the BALANCE program before the April 20 deadline. UnitedHealth flagged "notable challenges and outstanding questions with the currently planned structure," citing concerns about the model's design.
Under the BALANCE framework, CMS would have the authority to negotiate guaranteed net prices and set standardized coverage terms, which could include limits on out-of-pocket costs for GLP-1 therapies. CMS said it will proceed with the Medicaid portion of the BALANCE Model, keeping state applications open through July 31, 2026.
Market analysts characterized the delay as imperfect but manageable. Citi analyst Geoff Meacham described the bridge program extension through 2027 as an "acceptable workaround," noting that insurers' objections concentrated less on broader access to the treatments and more on instability within Medicare Part D plans and uncertainty around utilization patterns.
Evercore's Elizabeth Anderson said the delay could allow insurers to observe real-world utilization of GLP-1 drugs without immediately taking on pricing risk, potentially making them more comfortable joining the program when it is eventually implemented.
Implications for markets and industry
- Pharmaceutical firms producing GLP-1 weight-loss medicines will retain near-term demand support due to the bridge program.
- Health insurers and pharmacy benefit managers will continue to weigh participation decisions as more utilization and pricing data become available.
- State Medicaid programs will proceed with applications for the Medicaid portion of BALANCE, per CMS guidance.