Medicare will keep covering popular glucagon-like peptide-1 drugs through the end of 2027, the Centers for Medicare and Medicaid Services (CMS) said on April 21.
The continuation of the bridge program will ensure that beneficiaries keep having access to the drugs, known as GLP-1s, officials said in a memorandum.
The bridge program was set to wrap up at the end of 2026.
Although the interim coverage of the program will remain in place, officials said they would not—at least for now—introduce a pilot program that would let Medicare directly negotiate with drugmakers to keep expenses down and involve Medicare insurers paying for GLP-1 drugs such as Wegovy.
The pilot program is being delayed “pending further evaluation and data collection,” officials wrote.
The pilot program, called the Better Approaches to Lifestyle and Nutrition for Comprehensive Health model, was announced in late 2025. Dr. Mehmet Oz, the CMS administrator, said at the time that the model would enable CMS to negotiate directly with pharmaceutical companies for lower prices and standard terms of coverage.
The model requires participation from insurance companies, though, and several expressed concerns or declined to join.
“We would like to find a path to yes on coverage over time, but there are some notable challenges and outstanding questions with the currently planned structure,” UnitedHealth Group CEO Bobby Hunter said during an investor call this week.
“We are still working through that process internally and look forward to continuing the dialogue with CMS.”
CVS Health, parent company of insurance company Aetna, said it would not be a program participant.
CMS is still moving forward with the Medicaid portion of the model, with applications open to states through July 31.
The extension of the bridge program for Medicare beyond its 2026 expiry eases uncertainty around reimbursement for weight-loss drugs and blunts any near-term impact on demand, but an indefinite delay clouds long-term visibility on permanent integration into Medicare prescription drug plans, analysts said.
“[In the longer term,] 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,” J.P. Morgan analyst Chris Schott said.
While the delay is not ideal, extending the bridge program through 2027 is an acceptable workaround, Citi analyst Geoff Meacham said, adding that insurers’ pushback has focused less on broad access to the treatments than on instability in Medicare Part D plans and uncertainty around utilization.
The delay would give health insurers time to observe real-world use of GLP-1 drugs without absorbing pricing risk and potentially encourage broader participation once the model goes live, Evercore analyst Elizabeth Anderson said.
Reuters contributed to this report.