A voluntary Medicaid demonstration project that would expand access for certain GLP-1s for weight loss doesn’t appear to have many takers. Currently, the only definite participant is the state of Indiana.

President Trump has offered state Medicaid agencies lower negotiated prices for certain drugs targeting obesity through a voluntary model called Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth or BALANCE. The demonstration project pairs lower prices of a number of glucagon-like peptide-1 receptor agonists medications with physical fitness coaching and nutrition counseling. According to the Trump administration, the lower prices are based on prices paid in other developed countries, an approach for benchmarking known as most favored nation pricing.

The goal of the BALANCE model is to improve prevention of chronic diseases such as type 2 diabetes, cardiovascular disease and obstructive sleep apnea by promoting weight loss and healthy lifestyle habits. The model was originally intended for both Medicaid and Medicare Part D (outpatient benefit) recipients. Medicaid is the state-federal government insurance program for low-resourced individuals and families. Medicare is a federal government payer for the elderly and certain disabled people.

Late last year, the President vowed better access to GLP-1 weight loss drugs in Medicaid. This would happen in part through implementation of BALANCE. But thus far only Indiana has publicly signed on with the administration’s BALANCE project. According to Politico , most states have said they will not participate.

It may be too much of a budget strain for states to cover GLP-1s for obesity, even at comparatively lower net prices. The demand for such products is so high and there’s a considerable potential for off-label use. Other factors play a role, too, including churn of enrollees in the Medicaid program. Recipients don’t stay on long enough for the potential long-term benefits to accrue to Medicaid. And given the changes happening in the Medicaid program, it’s possible that churn has accelerated in the past year, to the point where budget directors care little about long-term investment in Medicaid recipients with treatments such as GLP-1s.

The harsh reality for Medicaid enrollees is that access to GLP-1s has worsened in 2025 and this year. Among other states, California passed a budget for 2025-2026 that eliminated Medicaid coverage for GLP-1 agonists for weight loss. Moreover, due to cost concerns North Carolina and West Virginia have recently eliminated coverage of GLP-1s for obesity for state employees, too.

In addition, the Medicare Part D portion of the BALANCE model has been delayed until 2028 owing to insufficient participation from payers. However, some Medicare beneficiaries do now have access to certain GLP-1s for weight loss by way of a separate, temporary program called Bridge . Those who meet the eligibility requirements can get GLP-1s for a $50 co-payment per month.

The emerging issues surrounding BALANCE raise possible questions as to whether another pilot the administration is pursuing in Medicaid, the GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) model , could face similar challenges. The answer is probably not to the same extent. But it’s a big unknown at this point.

GENEROUS is scheduled to launch in January of 2027. It’s designed to reduce Medicaid spending on a broad set of high-cost prescription drugs by introducing an alternate set of supplemental rebates based on international prices.

The primary incentive for states to join the voluntary GENEROUS pilot is the ability to use MFN rebates on a drug-by-drug basis when they exceed their already existing state-negotiated supplemental rates. While these rebates tend to be steep, a large majority of branded drugs are likely to have international prices that are lower than the current net Medicaid prices.

Nonetheless, the Trump administration has extended the deadline for state participation in GENEROUS, which suggests a possible problem with takers there, too. It’s unknown at this time which states are participating.

Seventeen large drug manufacturers have signed voluntary agreements with the Trump administration to offer Medicaid discounts based presumably on MFN prices. STAT News reports this week that nine smaller-sized companies made pledges to “offer their drugs to state Medicaid programs at “most-favored nation” prices.”

But it takes more than just promises by pharmaceutical companies to make the purported MFN models work. The unit price savings may be offset by increases in net program spending if GENEROUS materially expands volume. This is analogous to the problems facing BALANCE.

Access to the models’ undisclosed net prices is conditioned on provision of broad coverage by state Medicaid agencies and the managed care plans that contract with them. This could mean that states are constrained in their ability to use formulary management tools such as prior authorization and step edits-management tools. In effect, states may have to trade away some control over utilization for the lower prices offered by the Trump administration. A state could be reluctant to accept a deal that looks attractive per prescription but creates an uncertain — and possibly very large — budgetary obligation.

Furthermore, the One Big Beautiful Bill legislation that President Trump signed last year includes cuts to Medicaid that could hurt chances of success of both the BALANCE and GENEROUS models. The law severely restricts how states pay for their share of Medicaid costs. To illustrate, states have long used healthcare provider taxes and certain special payment arrangements to fund their portion of the program. Yet the law limits these financing tools , effectively shifting hundreds of billions in costs to state budgets.

Moreover, states have very different rules around budgets constraints than the federal government. Unlike the federal government, states cannot run deficits. With less help from Washington, DC, states are likely to look for areas to cut spending such as Medicaid.