The Centers for Medicare and Medicaid Services (CMS) is one of the most powerful federal agencies you may never have heard much about — until you, or someone you love, needs it. Sitting within the U.S. Department of Health and Human Services (HHS), CMS oversees health coverage for more than 160 million Americans through Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the Health Insurance Marketplace. From drug pricing to hospital payments to eligibility rules, nearly every corner of the American healthcare system touches CMS in some way. And right now, the agency is in the middle of some of the most sweeping changes in years.
What Is the Centers for Medicare and Medicaid Services?
CMS was established in 1977 (originally called the Health Care Financing Administration) and renamed in 2001 to better reflect the breadth of its mission. Its core responsibility is administering federal health insurance programs and setting standards for the healthcare providers and plans that participate in them.
In practical terms, CMS:
- Runs the Medicare program, which primarily covers Americans aged 65 and older, as well as certain individuals with disabilities
- Partners with states to administer Medicaid, the joint federal-state health coverage program for low-income individuals and families
- Oversees CHIP, which provides low-cost health coverage to children in families that earn too much to qualify for Medicaid
- Regulates the Affordable Care Act (ACA) health insurance marketplaces
- Sets and enforces quality standards for hospitals, nursing homes, and other providers
- Leads drug pricing and reimbursement policy across federal health programs
Understanding what CMS does — and how it is changing — matters for patients, providers, employers, and anyone who pays taxes.
The Latest From CMS: Major Developments
Medicare Premiums and Cost Updates
In November 2025, CMS released updated cost figures for Medicare beneficiaries. The standard monthly premium for Medicare Part B is now $202.90, an increase of $17.90 from the previous year’s $185.00. The annual Part B deductible also rose to $283, up $26 from $257. For hospital stays, the Medicare Part A inpatient hospital deductible that beneficiaries pay if admitted to the hospital is $1,736, an increase of $60 from the prior year. Beneficiaries must also pay a coinsurance amount of $434 per day for the 61st through 90th day of a hospitalization in a benefit period.
These changes reflect projected increases in healthcare utilization and pricing — a pattern that has continued steadily year over year.
GLP-1 Weight Loss Drugs: CMS Is Opening the Door
One of the most closely watched developments is CMS’s push to make GLP-1 medications — drugs like semaglutide (sold as Wegovy and Ozempic) and tirzepatide (Mounjaro) — more accessible and affordable for Medicare and Medicaid beneficiaries.
For decades, Medicare was legally prohibited from covering medications prescribed purely for weight loss. That is beginning to change.
CMS will provide eligible Medicare beneficiaries access to certain GLP-1 medications for $50 per month beginning July 1, 2026, through December 31, 2027. This initiative, known as the Medicare GLP-1 Bridge, is a time-limited demonstration that allows qualifying Part D enrollees to access these treatments at a predictable cost while longer-term coverage structures are built out.
Building on that, CMS announced a new voluntary test of a model designed to enable Medicare Part D plans and state Medicaid agencies to cover GLP-1 medications used for weight management and metabolic health improvement, while helping control costs for patients and taxpayers. This model — the BALANCE Model (Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth) — goes further by pairing medication access with evidence-based lifestyle supports, including reduced-calorie diet guidance and physical activity programs, at no additional cost to the beneficiary.
Under the BALANCE model, CMS will negotiate directly with pharmaceutical manufacturers to secure lower prices and uniform coverage terms for GLP-1 medications, so Medicare and Medicaid beneficiaries get the same access and benefits regardless of where they are in the country. The model is set to launch in Medicaid programs as early as May 2026, and in Medicare Part D plans in January 2027.
CMS Administrator Dr. Mehmet Oz stated that the goal is to “democratize access to weight-loss medication, which has been out of reach for so many in need.”
Drug Pricing Reform: GLOBE, GUARD, and Most Favored Nations
The GLP-1 push is just one piece of a much larger CMS drug pricing strategy. In December 2025, CMS released its GLOBE (Global Benchmark for Efficient Drug Pricing) and GUARD (Guarding U.S. Medicare Against Rising Drug Costs) models — two drug pricing initiatives designed to incorporate most favored nation (MFN) pricing into the Medicare Parts B and D programs. If finalized, these models would require additional mandatory rebates from manufacturers of high-cost single-source drugs.
Earlier, CMS also introduced the GENEROUS Model (GENErating cost Reductions fOr U.S. Medicaid), a voluntary MFN framework for the Medicaid Drug Rebate Program. Major manufacturers, including Pfizer, Eli Lilly, GSK, Gilead Sciences, and Merck, have already announced deals with the administration to match MFN prices.
Together, these initiatives represent the administration’s most aggressive push yet to lower what Americans — particularly seniors — pay for prescription drugs.
Medicaid Work and Community Engagement Requirements
Among the most consequential policy changes underway is the introduction of Medicaid community engagement requirements under the Working Families Tax Cut (WFTC) legislation, signed into law on July 4, 2025.
The reforms — among the most significant Medicaid eligibility and financing changes in more than a decade — aim to connect able-bodied, working-age adults with work and community engagement opportunities, reduce improper enrollment, and strengthen the long-term sustainability of Medicaid and CHIP.
Under the new rules, community engagement requirements apply to adults aged 19 to 64 who are enrolled in Medicaid. Applicable individuals must demonstrate at least 80 hours per month of qualifying activity, such as employment, education, volunteer work, or participation in a work program. Exemptions exist for individuals who are medically frail, have significant mental health or substance use conditions, or are already meeting SNAP or TANF work requirements.
States must implement these requirements by January 1, 2027, but may choose to do so earlier. CMS is required to issue an Interim Final Rule by June 1, 2026 to formalize the operational details. To help states prepare, CMS will award $200 million across all states and Washington, D.C. to support systems development and operational changes needed for implementation.
Electronic Prior Authorization: Healthcare’s Paper Problem Gets a Fix
If you’ve ever waited days — or weeks — for an insurer to approve a medication or procedure, you know just how frustrating prior authorization can be. CMS is working to fix that at scale.
As of January 1, 2026, impacted payers across Medicare Advantage, Medicaid, CHIP, and Marketplace plans are required to send prior authorization decisions for medical items and services within defined timeframes using electronic, FHIR-based (Fast Healthcare Interoperability Resources) systems. This builds on the landmark 2024 CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F).
Most recently, CMS, through its Health Tech Ecosystem, is advancing its electronic prior authorization efforts through a newly established Electronic Prior Authorization Acceleration initiative. Twenty-nine healthcare organizations — including health systems, electronic health record developers, physician practices, networks, and digital health developers — have signed on as early adopters in this cross-sector effort.
The results are already showing. Leading health plans have reportedly eliminated 11% of prior authorizations across a range of medical services, representing 6.5 million fewer prior authorizations for patients. That number is expected to grow significantly as the 2027 full implementation deadline approaches.
ACA Exchange Oversight Tightened for 2027
CMS has also moved to strengthen oversight of the Affordable Care Act marketplaces. CMS issued a sweeping rule to strengthen oversight of the ACA Exchanges for plan year 2027 by lowering user fees, tightening eligibility verification, and expanding state control. The move is part of a broader effort to crack down on fraud in marketplace enrollment while keeping coverage costs manageable for consumers.
Quality Measures and the MAHA Framework
CMS released its 2025 Measures Under Consideration (MUC) List, which identifies metrics the agency is considering adopting for use across Medicare programs. This year’s list comprises 24 unique measures, with several addressing topics consistent with the Department of Health and Human Services’ Make America Healthy Again (MAHA) priority framework, such as chronic illness and nutrition. All 24 measures rely on data submissions using at least one digital source.
The MAHA alignment signals a growing emphasis on preventive care, nutrition-related chronic disease management, and data-driven quality improvement across CMS programs.
How CMS Affects You
Whether you are a Medicare beneficiary, a Medicaid enrollee, a healthcare provider, or simply a taxpayer, CMS decisions shape your day-to-day healthcare experience in concrete ways:
As a patient, CMS rules determine what treatments your insurance must cover, how quickly insurers must respond to prior authorization requests, how much you pay in premiums and deductibles, and which drugs are available at what price.
As a healthcare provider, CMS sets the reimbursement rates that drive revenue for hospitals, physicians, and skilled nursing facilities. Changes to hospital outpatient payment systems, ASC rates, and value-based care models all flow directly from CMS rulemaking.
As a taxpayer, CMS manages over $1 trillion in federal health spending annually. Its efforts to reduce fraud, streamline Medicaid eligibility, and lower drug costs are directly tied to the long-term fiscal health of programs like Medicare, which funds the healthcare of virtually every American who reaches retirement age.
FAQs
What does the Centers for Medicare and Medicaid Services do? CMS is the federal agency responsible for administering Medicare, Medicaid, CHIP, and the ACA health insurance marketplaces. It sets coverage standards, reimbursement rates, quality requirements, and eligibility rules for these programs.
Who is the current CMS Administrator? The current CMS Administrator is Dr. Mehmet Oz, appointed under the Trump administration. He has been at the center of major recent initiatives including the BALANCE Model for GLP-1 drug access and the broader Most Favored Nations drug pricing strategy.
How do I contact CMS? Beneficiaries can reach CMS by calling 1-800-MEDICARE (1-800-633-4227) for Medicare questions, or visiting CMS.gov. For Medicaid, contact your state’s Medicaid agency directly, as administration varies by state.
What is the difference between Medicare and Medicaid? Medicare is a federally administered program primarily for adults aged 65 and older and certain individuals with disabilities. Medicaid is a joint federal-state program for low-income individuals and families, with eligibility rules varying by state.
Will Medicare cover GLP-1 weight loss drugs? Yes, beginning July 1, 2026, eligible Medicare Part D enrollees will be able to access certain GLP-1 medications for $50 per month through the Medicare GLP-1 Bridge program. Longer-term coverage through the BALANCE Model is being developed separately.
What are Medicaid work requirements? Under new federal law signed in July 2025, certain Medicaid-enrolled adults aged 19 to 64 will be required to demonstrate at least 80 hours per month of qualifying work, education, or community service activities to maintain eligibility. States must implement these requirements by January 1, 2027.
What is prior authorization and how is CMS changing it? Prior authorization is the process by which a health insurer must approve certain medications or procedures before they are covered. CMS is requiring health plans across Medicare Advantage, Medicaid, and ACA marketplaces to implement electronic prior authorization systems, dramatically reducing wait times and administrative burden.
How are Medicare Part B premiums determined? Medicare Part B premiums are set annually by CMS based on projected healthcare costs. The standard monthly premium for Part B in the current benefit year is $202.90.
What is the BALANCE Model? The BALANCE Model (Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth) is a voluntary CMS innovation model designed to expand access to GLP-1 weight management medications for Medicare and Medicaid beneficiaries, paired with lifestyle support programs, through direct negotiations with drug manufacturers.
Where can I find official CMS updates? All official CMS news, press releases, and final rules are available at CMS.gov/newsroom. You can also sign up for CMS email updates directly through the site.
The Centers for Medicare and Medicaid Services is not a static bureaucracy — it is the engine driving some of the most consequential healthcare decisions in the country right now, from drug pricing battles with Big Pharma to the digital transformation of how your insurance approves care.
If you found this article helpful, drop a comment below with your questions about Medicare or Medicaid — and make sure to bookmark this page, because CMS policy is moving fast and we’ll be updating it as new developments unfold.