On November 6, President Donald Trump unveiled a new initiative called the GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) Model, developed in collaboration with pharmaceutical leaders Eli Lilly and Novo Nordisk.
This program marks a major shift in healthcare policy by extending GLP-1 medication coverage to Medicare and Medicaid beneficiaries — an exciting update for clients who are interested in weight loss or diabetes management medications.
Currently, individuals without insurance can expect to pay between $900 and $1,300 per month for popular GLP-1 drugs such as Ozempic®, Wegovy®, Mounjaro®, and Zepbound™. These costs have been especially challenging for Medicare beneficiaries who do not have type 2 diabetes.
Beginning in 2026, Medicare and Medicaid will launch a pilot program under the GENEROUS model to make these treatments significantly more affordable.
GLP-1 Medications Included in the Program
The program will initially include medications from Eli Lilly and Novo Nordisk, the companies behind the leading GLP-1 drugs: Ozempic®, Wegovy®, Mounjaro®, and Zepbound™.
Additionally, both manufacturers have indicated that new GLP-1 pill formulations currently under review by the Food and Drug Administration (FDA) could be added to the program by mid-2026, once approved.
When Will Beneficiaries Begin Saving?
The administration also plans to launch a new website, TrumpRx.gov, in early 2026. Through this platform, consumers will be able to purchase GLP-1 medications at discounted prices.
For Medicare beneficiaries receiving coverage through this program, savings are expected to take effect in the second half of 2026.
Because Medicaid programs are administered at the state level, timelines and pricing details may vary based on each state’s participation.
How the GENEROUS Model Expands Medicare Coverage
Under current Medicare rules, GLP-1 drugs are typically covered only for individuals with type 2 diabetes or cardiovascular disease. The GENEROUS model will expand eligibility to include beneficiaries with obesity or related health conditions — potentially impacting up to 10% of all Medicare enrollees.
Coverage will phase in gradually through a three-stage pilot under Medicare Part D:
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Phase 1: Individuals with a BMI over 27 who have prediabetes or cardiovascular disease
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Phase 2: Individuals with a BMI over 30 who have hypertension, kidney disease, or heart failure
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Phase 3: Individuals with a BMI over 35
Beneficiaries using weight-loss–specific medications like Wegovy® or Zepbound™ will qualify if they are obese or overweight with at least one related condition.
However, GLP-1 prescriptions for weight loss alone, without another qualifying health factor, will not be covered under the GENEROUS model.
Medicaid Participation and State Involvement
The administration also intends to extend the GENEROUS model to Medicaid to help reduce long-term health risks associated with obesity.
Each state Medicaid program must opt in to participate. States will need to submit a letter of intent and will later be invited to join a pricing agreement with manufacturers. These agreements will define drug costs, eligibility requirements, and other program details.
Because participation is optional, the availability of GLP-1 coverage will depend on which states decide to join the program.
Expected Drug Costs Under the New Model
The GENEROUS model introduces significant cost reductions for GLP-1 medications:
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Wegovy® and Zepbound™ (for weight loss): $350 per month at program launch, decreasing over two years
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Ozempic® and Mounjaro® (for type 2 diabetes): $245 per month, also decreasing over two years
Eligible Medicare beneficiaries covered under the new criteria or the phased Part D plan will pay approximately $50 per month — a dramatic improvement compared to current prices.
Why This Policy Matters
GLP-1 medications have been used since 2005 to successfully manage type 2 diabetes, helping patients lower blood sugar and A1C levels. In recent years, they’ve also become known for promoting safe and sustainable weight loss.
Despite their proven benefits, high costs have kept many Americans from accessing these treatments. The GENEROUS model represents a major step forward in making GLP-1 medications more affordable and accessible to those who need them most.
Research from the University of Colorado Boulder found that obesity increases the risk of death by 22% to 91%. Expanding access to GLP-1 treatments could improve public health outcomes nationwide and reduce the long-term costs associated with chronic conditions such as diabetes, hypertension, and heart disease.
How Agents Can Help Clients
If your clients have a Medicare Part D plan or may qualify for expanded coverage under the GENEROUS model, encourage them to speak with their healthcare provider about GLP-1 treatments.
Clients who are already taking these medications should know that their costs may drop significantly by mid to late 2026.
As more details become available about program rollout and pricing, we’ll continue to provide updates so you can keep your clients informed and prepared.
The Bottom Line
President Trump’s GENEROUS model could mark one of the biggest shifts in Medicare and Medicaid prescription coverage in years — making GLP-1 medications more accessible and affordable for millions of Americans.
By expanding treatment options for diabetes and obesity, this initiative aims to improve long-term health outcomes while lowering costs for both patients and the healthcare system as a whole.
Not affiliated with or endorsed by Medicare or any government agency.
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