Proposal for Medicaid, Medicare Coverage of Obesity Drugs Could Prove Difficult

Although the Biden administration will soon be replaced following inauguration day on January 20, 2025, it is leaving with some proposals to expand Medicare and Medicaid coverage, including expanding coverage to include weight loss drugs, such as semaglutide (Wegovy) and tirzepatide (Zepbound).¹ Though this proposal may not be possible to carry out before the New Year, the proposal introduces a conversation around the feasibility of such a move, both in terms of cost and the health of the population.

This policy directive from the Biden administration proposes avoiding the restriction on Medicare covering drugs for weight loss by defining obesity as a disease that has to be treated and whose related conditions could be prevented.

“The way we think about obesity is vastly changed from 30 years ago, 40 years ago,” said David Kim, PhD, assistant professor of medicine and public health sciences at the University of Chicago. “Back then they [thought] about this is more [for] the beauty, it’s not really therapeutic…. But now many organizations recognized obesity as a disease.”

Making weight loss drugs like semaglutide available through Medicaid and Medicare could cost more than it saves | Image credit: alones - stock.adobe.com

Anti-obesity medications are the most promising form of treatment available for not only reducing excessive weight but also improving secondary conditions, such as sleep apnea and cardiovascular disease, said Kim. However, these benefits have been primarily available for white people, leaving other populations at a disadvantage in terms of access.² Making the medication available on Medicaid and Medicare could improve health equity overall, he said.

“If Medicare didn’t cover this drug, which still costs $6000-$7000 per year, some people just buy out of pocket because they can afford it. It doesn’t mean that those who can benefit most from this type of drug are able to access those drugs,” said Kim.

With the changing of the administrations, it is unclear if this proposal would be picked up as a primary goal for the Trump administration. Kim noted that 1 of the stated goals of the new administration’s proposed appointments, Robert F. Kennedy Jr for HHS and Mehmet Oz, MD, for CMS, is the prevention of chronic disease, which obesity is now being defined as. Making weight loss drugs more easily accessible could be a popular policy to work toward in the new year. However, the overall position of the administration could conflict with any proposal to make weight loss drugs available to those on Medicaid and Medicare.

“Obviously the bigger agenda from the new administration is possibly to propose a tax cut, which creates the potential fiscal loss in the government budget system. So they’ll probably think about cutting down the cost somewhere else,” said Kim. “It’s more for me whether they’re going to put more emphasis on the fiscal and affordable impact vs…preventions of chronic disease.”

The primary concern with making weight loss drugs more accessible is how much it would cost the government to provide such a treatment to millions of Americans. According to NBC News, covering weight loss drugs would cost about $25 billion for Medicare and $11 billion for Medicaid over the course of 10 years.² Although there would be some cost saving from preventing further chronic conditions, these cost savings are not likely to cover the cost of providing the medication.

“The cost offset will increase over time because a lot of this potentially preventable obesity-related disease happens 5 years later, 10 years later, 15 years later,” said Kim. “But a lot of people are missing here is that in relative to the cost of medication itself. It will save money, but in order to save money you have to spend a lot.”

The Congressional Budget Office estimated³ that the federal government would pay approximately $5600 per user in 2026, decreasing to $4300 by 2034. The savings, however, would only start at $50 in 2026 and increase to $650 by 2034, which makes the cost savings of providing the weight loss drugs secondary to the cost that they would incur on the government. These costs have previously led insurance companies to drop coverage of weight loss drugs to make up the cost.⁴ The costs especially in older adults on Medicare may be misused as well, as there is still no major research done on the efficacy of weight loss drugs in those aged 60 years and older.

In a commentary previously published in The American Journal of Managed Care® (AJMC®),⁵ Kim and A. Mark Fendrick, MD, the co–editor in chief of AJMC and the director of the Center for Value-Based Insurance Design at the University of Michigan, argued that a more efficient approach to expand equitable access of obesity drugs could involve letting a patient take the medication for a year before transitioning them to a lifestyle course to maintain the weight loss. Kim believes that this would also be helpful when considering weight loss drugs covered by Medicaid and Medicare.

“I think that’s the kind of nice, more balanced approach to these issues about howe we are going to ensure access to this highly effective yet costly intervention while not breaking the bank,” said Kim. “We are sacrificing a little bit of regain of the weight loss but it will save a lot more money so that, I think, the more people can at least benefit from this initial weight loss space.”

As the new administration takes office in January, these questions will continue to come up should the Trump administration take the proposal seriously. Should the proposal be adopted, it is likely that effects would not be seen for several years.

References

1. Fact sheet: Biden-Harris administration takes latest step to lower prescription drug costs by proposing expanded coverage of anti-obesity medications for Americans with Medicare and Medicaid. News Release. White House; November 26, 2024. Accessed December 4, 2024. https://www.whitehouse.gov/briefing-room/statements-releases/2024/11/26/fact-sheet-biden-harris-administration-takes-latest-step-to-lower-prescription-drug-costs-by-proposing-expanded-coverage-of-anti-obesity-medications-for-americans-with-medicare-and-medicaid/
2. Lovelace Jr B, Bush E. Biden proposes weight loss drug coverage for people on Medicare and Medicaid. NBC News. Updated November 26, 2024. Accessed December 4, 2024. https://www.nbcnews.com/health/health-news/biden-proposes-requiring-medicare-medicaid-cover-weight-loss-drugs-rcna181756
3. How would authorizing Medicare to cover anti-obesity medications affect the federal budget? Congressional Budget Office. October 2024. Accessed December 4, 2024. https://www.cbo.gov/publication/60816
4. Klein HE. Rising costs lead insurers to drop weight loss drug coverage, further increasing patient burden. Am J Manag Care. 2024;30(Spec No.10):SP781-SP782. doi:10.37765/ajmc.2024.89614
5. Kim DD, Fendrick AM. An efficient approach to expand equitable access to antiobesity medications: deprescribing after weight loss plateau. Am J Manag Care. 2024;30(8):348-350. doi:10.37765/ajmc.2024.89586.