Trump Administration Unveils GLP-1 Pilot
True to an earlier announcement, the Trump administration has taken the first step toward more expansive coverage of GLP-1 weight-loss drugs in Medicare and Medicaid. The president announced major deals with GLP-1 drug makers Eli Lilly and Novo Nordisk that both reduce net costs as well as set a proposed maximum $50 copay in Medicare for all coverage of GLP-1s.
The new step includes the creation of the Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth (BALANCE) Model. Under the model, the Centers for Medicare and Medicaid Services (CMS) negotiates directly with pharmaceutical manufacturers for lower net prices and standardized coverage terms. Negotiation areas include:
- Guaranteed net pricing and potential out-of-pocket limits for beneficiaries.
- Standardized coverage criteria.
- Evidence-based lifestyle support offerings.
Participation will be voluntary for manufacturers, states, and plans. More information will be released in early 2026. The BALANCE Model will launch in Medicaid as early as May 2026 and in Medicare Part D in January 2027. Manufacturers, states, and Part D plans need to apply by January 8, 2026.
In Medicare, the model may adjust capitated payment rates for obesity and increase the government reinsurance for drug fills. Final details will be announced ahead of the 2027 Part D bid process. It is anticipated that existing users of GLP-1s in Medicaid and Medicare for approved disease states will benefit, not just new users for obesity alone. Lower costs for drugs will be via a prescribed rebate from manufacturers to Part D plans.
To bridge to 2027 in Part D, there will be a new GLP-1 payment demonstration beginning in July 2026. This will operate outside of Part D and plans will not carry risk for eligible GLP-1 products furnished under the demonstration.
In other news, the Food and Drug Administration (FDA) has approved Novo Nordisk’s oral version of the Wegovy weight loss pill. The pill forms of the drugs appear to be somewhat less potent, but are more convenient and could broaden use. Trump also gained concessions on oral forms of GLP-1s. Eli Lilly will likely gain approval of its oral GLP-1 in the coming weeks.
Additional articles: https://www.cms.gov/newsroom/press-releases/cms-launches-voluntary-model-expand-access-life-changing-medicines-promote-healthier-living and https://thehill.com/policy/healthcare/5660548-fda-approves-wegovy-weight-loss/ and https://www.healthcaredive.com/news/novo-nordisk-oral-wegovy-fda-approve-glp-1/808626/
#glp1s #weightlossdrugs #branddrugmakers #drugpricing #medicare #partd #medicaid
https://www.beckerspayer.com/pharmacy/cms-kicks-off-glp-1-model-6-notes/
DPC and Concierge Have Grown Dramatically
A new study in Health Affairs finds that the number of concierge and direct primary care practices grew from 2018 to 2023 and there was a substantial shift away from independent ownership. The number of concierge and direct primary care practices grew by 83% and the number of clinicians participating in them by 78%.
Meanwhile, the share of independently owned practices dropped from 84% to 60%, while the number of corporate-affiliated practices grew by a whopping 576%. Corporate owners were defined in the study as for-profit groups that do not include hospitals and health systems.
The U.S. is projected to face a shortage of up to 86,000 primary care docs by 2036. Traditional independent primary care is swiftly becoming a thing of the past due to low rates, administrative burdens, and consumer dissatisfaction. Smaller practices with more personalized care are emerging. These include concierge practices and direct primary care (DPC) practices. Reimbursement can be self-pay and some insurance billing.
The trend could grow. The One Big Beautiful Bill Act (OBBBA) expands the use of Health Savings Accounts (HSAs) as well as direct primary care.
Will Insurers Rebound in 2026?
A perfect storm destroyed health plan company balance sheets in 2024 and much of 2025, but there is some optimism going into 2026 for insurers. While cost and regulatory pressures continue, health plan realignment seems to be paying dividends and analysts are projecting improved financials. We have already seen stunning turnarounds at both Humana and CVS Health, which were among the hardest hit in 2024 and 2025. Most plans have retrenched in either 2024 and 2025, including major contraction in Medicare Advantage (MA) and the Exchanges.
MA will recover due to a strong rate hike and commercial will remain the best margin driver. Medicaid and the Exchanges will remain challenging due to the One Big Beautiful Bill Act (OBBBA) reductions as well as state budget pressures. At the same time, credit ratings agencies still see the 2026 financial outlook as negative given some uncertainty of medical costs.
Additional articles: https://www.modernhealthcare.com/insurance/mh-cvs-aetna-oak-street-health-2025/
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#healthplans #margins #medicareadvantage #medicaid #commercial #exchanges
https://www.modernhealthcare.com/insurance/mh-cigna-unitedhealth-elevance-finances-2026
Paragon Examines CSR Appropriation
The House bill passed last week proposed to reappropriate the Cost-Sharing Reduction (CSR) subsidies. The premium subsidies (supporting those between 100% and 400% of the federal poverty level (FPL) and temporarily higher) were enhanced during the COVID pandemic and remain a bone of contention. But the lesser known CSRs (supporting additional assistance for those between 100% and 250% of FPL) were actually de-appropriated under Trump 45. Insurers were still required to offer the CSR plan benefits and thus massively increased premiums for Silver metal plans, known as Silver loading.
Appropriating dollars for CSRs would return to the intent and the Silver loading would end. This would have the effect of saving federal dollars as the budget is spending more on premium subsidies than it did for CSRs before Silver loading. The end of Silver loading reduces premiums and help affordability for those who do not receive subsidies once enhancements expire. This could save them on average $900 annually.
At the same time, removing the Silver loading hurts some enrollees over roughly 200% and below 400% of FPL. The move is good despite some who may drop coverage when their subsidy drops. Overall federal spending would be reduced by more than $30 billion over the next decade.
#exchanges
— Marc S. Ryan
