President Donald Trump’s first Medicare Advantage rule tabled decisions on plans' use of artificial intelligence and marketing oversight while dropping a proposal to cover obesity drugs.
In the Medicare Advantage and Part D final rule for 2026 issued Friday, the Centers for Medicare and Medicaid Services delayed final decisions on expanding what counts as Medicare marketing, setting stricter network adequacy requirements, and determining the role of artificial intelligence in prior authorization.
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The agency also opted not to implement a sweeping proposal from the previous administration to cover obesity drugs such as Ozempic under Medicare and Medicaid, which would have increased Medicare spending by $25 billion and Medicaid spending by $15 billion over a decade.
Medicare Advantage insurers had urged CMS to scrap the obesity drug coverage proposals and eliminate a health equity payment adjustment ahead of the final rule. Insurance companies had faced substantial pressure under President Joe Biden adminstration as CMS implemented numerous regulations that undercut Medicare Advantage profit margins.
"We are encouraged that the administration took a measured approach and declined to make major changes at this time," Mary Beth Donahue, president and CEO of Better Medicare Alliance, said in a news release.
Prior authorization and artificial intelligence
CMS finalized a key provision that holds Medicare Advantage insurers responsible for paying inpatient hospital admissions claims previously approved through the prior authorization process.
However, the agency opted not to solidify a proposal to set up guardrails on the use of artificial intelligence for prior authorizations.
CMS “does want to acknowledge the broad interest in regulation of AI and will continue to consider the extent to which it may be appropriate to engage in future rulemaking in this area,” the rule says.
Medicare Advantage marketing
CMS deferred a proposal to broaden the definition of marketing, which would have expanded its ability to crack down on misleading advertising. The proposal would have also mandated brokers provide customers with more information about their coverage options, such as eligibility standards for low-income subsidies and the Medicare Savings Programs.
Medicare Advantage and Part D networks
CMS also postponed a final decision on a proposal that would have increased insurers’ specificity in provider directories. Under the proposed rule, health insurance companies would have been required to provide the federal government with provider lists formatted so CMS could easily add that information to the Medicare Plan Finder.
The agency punted a proposal to require insurers update their network listings within 30 days of a provider joining or leaving, as well.
Under another proposal CMS delayed, Medicare Part D insurers would have had to notify pharmacies of their network status before open enrollment and allow them to leave without justification.
GLP-1s and Medicare, Medicaid
The agency dropped a key proposal to cover glucagon-like peptide-1 receptor agonists, also known as GLP-1s, which the Biden administration sought to cover as a treatment for obesity.
The proposal was a tricky one: demand for GLP-1s such as Ozempic and Wegovy is extremely high, but federal law prohibits covering weight loss medications. The Biden administration had proposed to redefine obesity as a chronic condition, which it argued would have made covering the medication permissible.
But the coverage would have increased Medicare and Medicaid spending by billions.
Ceci Connolly, president and CEO of the Alliance of Community Health Plans, said in a news release that the coverage decision “would have been irresponsible without further long-term efficacy and safety studies and economic analysis.”
“While these drugs offer hope for many, the excessive costs carry enormous consequences for consumers, taxpayers and employers,” Connolly said.
Health risk assessments, supplemental benefit limits and other final policies
CMS finalized a handful of provisions, including requiring integrated health risk assessments for enrollees dually eligibly for Medicare and Medicaid, rather than having plans conduct a separate health risk assessment under each payer for a single beneficiary.
It also set coverage limits for Special Supplemental Benefits for the Chronically Ill — banning coverage for things such as alcohol and tobacco.
The agency also codified a handful of informal guidances on the appeals process, including requirements that plans notify providers who appeal on an enrollee's behalf, as well as beneficiaries, when coverage decisions are made.
CMS implemented Part D coverage requirements included in the Inflation Reduction Act, as well, eliminating deductibles and tweaking cost-sharing requirements for insulin and vaccines as recommended by the Advisory Committee on Immunization Practices.
