Obesity drugs would be covered by Medicare and Medicaid under Biden proposal

The Biden administration, in one of its last major policy directives, proposed Tuesday that Medicare and Medicaid cover obesity medications, a costly and probably popular move that the Trump administration would need to endorse to become official.

The proposal would extend access of the drugs to millions of Americans who aren’t covered now.

The new obesity drugs, including Wegovy from Novo Nordisk and Zepbound from Eli Lilly, have been shown to improve health in numerous ways, but legislation passed 20 years ago prevents Medicare from covering drugs for “weight loss.”

The new proposal sidesteps that restriction, specifying that the drugs would be covered to treat the disease of obesity and prevent its related conditions.

“We don’t want to see people having to wait until they have these additional diseases before they get treatment,” said Chiquita Brooks-LaSure, the administrator of the Centers for Medicare and Medicaid Services, or CMS, noting the growing medical consensus that obesity is a chronic health condition.

The classification would also mean that every state Medicaid program would be required to cover the drugs. Currently, only a handful do.

CMS estimates that around 3.4 million more patients in Medicare would become eligible for obesity drugs and around 4 million patients in Medicaid would gain coverage, costing the programs billions of dollars. Medicare mostly covers Americans 65 and older; Medicaid mostly covers poor and disabled Americans.

The proposal is part of an annual policy update for all Medicare drug plans and private Medicare Advantage plans starting in 2026. In a conference call with reporters Tuesday, Daniel Tsai, the top Medicaid official, said Medicaid coverage could start sooner than 2026.

But this big change will depend on the endorsement of the incoming administration.

Many of President-elect Donald Trump’s recent appointments have expressed a desire to rein in federal spending. And Trump has nominated two figures to key health posts who have differing views about the value of the new drugs, known as GLP-1s.

Robert F. Kennedy Jr., his choice to lead the Department of Health and Human Services, has suggested that obesity should be tackled through healthy eating, not drugs.

“If we just gave good food, three meals a day, to every man, woman and child in our country, we could solve the obesity and diabetes epidemic overnight,” Kennedy said on Fox News before the election.

Dr. Mehmet Oz, Trump’s choice to lead CMS, has been more enthusiastic; he featured patients who took the drugs on his old television talk show. Oz’s portfolio would include Medicare and Medicaid policy, but he would report to Kennedy.

Given Kennedy’s skepticism and the new drugs’ potentially large cost, Trump officials might not have proposed a coverage requirement. But they may now face pressure to approve it.

Jackson Hammond, a senior policy analyst at the Paragon Health Institute, a research group staffed with many former Trump health officials, said he thought the policy rested on shaky legal ground and should not be enacted without Congress’ endorsement. “The law is clear that Medicare cannot cover weight loss medication, regardless of whether obesity is a disease,” he said. He also noted the costliness of the change.

Sen. Bernie Sanders, I-Vt., chair of the Senate Health Education, Labor and Pensions Committee, whose office has been investigating the high cost of obesity drugs, also expressed concern about the cost of the policy. “Unless Medicare demands that Novo Nordisk and Eli Lilly substantially reduce the prices for these anti-obesity drugs, Medicare premiums for all seniors would skyrocket,” he said in a statement.

But some Republicans seem enthusiastic. Jim Justice, the West Virginia governor who was just elected to the Senate, said in a news conference Tuesday that he strongly supported the move. He noted he had lost 30 pounds taking Ozempic. “I would be a proponent of doing everything we can to be able to expand these drugs” to everybody, he said.

Demand for the drugs is strong, and some Medicare beneficiaries are already taking them, even paying full price themselves. A recent survey from KFF, a health policy group, found that 61% of Americans support Medicare coverage for these drugs. The Biden administration’s proposal will set off a public comment period, in which doctors and patients will share their views on the decision with government officials.

Evidence about the health benefits of GLP-1s has been mounting. They have been shown not only to help people lose weight but also to reduce the severity of diseases associated with obesity, including diabetes, high blood pressure, cardiovascular disease, sleep apnea, fatty liver disease and arthritis.

Some people who take the drugs experience serious side effects, like persistent nausea, that make them stop. Others are uncomfortable with needles — the drugs are taken as a weekly injection — or simply don’t want to take drugs to lose weight. But many physicians and researchers are excited about their potential to improve public health.

CMS estimates that coverage will cost the federal government about $25 billion for Medicare and $11 billion for Medicaid over a decade; states would pay around $4 billion for their share of the Medicaid bill, according to Brooks-LaSure. (CMS estimates total Medicare drug spending over the period at $2.1 trillion.)

That price for Medicare is lower than a recent estimate from the Congressional Budget Office and one published by researchers in the policy journal Health Affairs, in part because it is measuring a more narrow population who would get coverage through the change. There have been no major studies of the cost of Medicaid coverage.

Stock prices of both Novo Nordisk and Eli Lilly rose Tuesday after the announcement.

While the sticker price for the medications tops $1,200 a month, most insurers are able to negotiate significant discounts. With more obesity drugs in the pipeline, economists think prices will continue to fall as competition increases. Medicare will also be able to negotiate on the price for Wegovy starting next year, under legislation passed during the Biden administration that allows the program to lower the prices of popular drugs.

The cost of the change would also be blunted by the growing evidence that the drugs treat other diseases. Medicare and Medicaid already cover the drugs for certain patients with diabetes and cardiac disease, and will add other ailments over time as the Food and Drug Administration approves their use.

Brooks-LaSure said that even though the share of Medicare patients who have obesity but no other qualifying disease is relatively modest, adding a blanket coverage rule will make it easier for all eligible people who want the drugs to get them.

“Everybody deserves access,” she said. “The more friction there is in the system — the more hoops you have to meet, all these characteristics — the harder it is for people to get the care they need.”

If the change becomes final, it will mean patients with government insurance will have much broader access to the treatments than those with commercial insurance. A recent survey from KFF found that a minority of employer health plans cover drugs for obesity.

But Medicare is often a leader in coverage decisions.

This article originally appeared in The New York Times.

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