Biden proposes coverage requirements for weight loss drugs for Medicare and Medicaid

The Biden administration plans to require Medicare and Medicaid to offer coverage of weight-loss drugs to people seeking obesity treatment.

The new rule, proposed by the administration on Tuesday, would dramatically expand access to anti-obesity drugs such as Ozempic and Wegovy from Novo Nordisk and Mounjaro and Zepbound from Eli Lilly.

Medicare has been barred from paying for weight loss drugs unless they are used to treat conditions such as diabetes or to manage an increased risk of heart disease. States can decide whether to cover obesity drugs under Medicaid, but the majority do not.

The Biden administration is proposing to reinterpret the law barring coverage by classifying obesity drugs as treatments for a “chronic disease” rather than as weight-loss drugs.

“The medical community today agrees that obesity is a chronic disease,” Centers for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure said on a call with reporters Tuesday. “These drugs are the beginning of a revolution in the way weight is controlled.”

The change will dramatically reduce the outgoing costs of the drugs. Today, a month’s supply of weight-loss drugs can cost $1,000 or more, according to an estimate by a White House official.

The federal government will pick up the bulk of those costs, about $25 billion for Medicare and $11 billion for Medicaid over 10 years, government officials said Tuesday. States must pay about $3.8 billion.

They do not expect it to increase deductibles.

“The Inflation Reduction Act has made historic strides in reducing prescription costs for our nation’s seniors and those on Medicare, including a $2,000 out-of-pocket cap and IRA premium stabilization policies,” said CMS Deputy Administrator Dr. Meena Seshamani. the call.

The proposal still requires a 60-day public comment period before it can take effect, leaving it up to the incoming Trump administration to finalize it.

Larry Levitt, executive vice president for health policy at KFF, a nonprofit group that researches health policy issues, said it’s “an open question” whether the incoming Trump administration will follow through, given that Robert F. Kennedy Jr. have not been so keen on the class of drugs.

President-elect Donald Trump this month tapped Kennedy to lead the Department of Health and Human Services.

“RFK Jr. has expressed skepticism about these drugs, but Dr. Oz has praised them,” Levitt said, referring to Mehmet Oz, Trump’s pick to lead CMS. “Ultimately, this decision will likely be made by the White House, which may be hesitant to stand in the way of coverage that is likely to be very popular with many seniors.”

More than 40% of Americans are considered obese. Obesity, a chronic disease, puts people at risk of heart disease, diabetes, breathing problems, stroke and certain cancers, according to the Centers for Disease Control and Prevention.

The new rule would expand access to the drugs for 3.4 million Americans using Medicare and another 4 million people enrolled in Medicaid, the White House official said.

About 72 million Americans were enrolled in Medicaid in July, according to CMS. Almost 68 million are enrolled in Medicare.

Another 154 million Americans get health insurance through their jobs, according to KFF.

Research suggests that there are significant differences in who receives weight loss medications. Health analytics firm PurpleLab found racial differences in who is able to get semaglutide, the ingredient in Ozempic and Wegovy.

About 85% of semaglutide prescriptions were dispensed to white people in 2023, the company’s data found. When insurance doesn’t cover the drug, its high cost becomes a barrier for many low- and middle-income Americans, doctors have said.

Expanding coverage to patients dependent on Medicare and Medicaid may reduce some disparities.

“Our Medicare and Medicaid populations are some of the most vulnerable, and they don’t have access to any anti-obesity medications,” said Dr. Laure DeMattia, a bariatric medicine specialist in Norman, Oklahoma, told NBC News in March.

On the call Tuesday, officials said people may not be able to access the care they need. Government data shows that Medicare Advantage plans reverse 80% of their decision to deny claims when those claims are appealed. However, fewer than 4% of rejected claims are appealed.

The problem is also quickly becoming a workplace issue as the drugs’ popularity increases and employers balance program costs and the needs of their workers.

Survey results published last month in Health Affairs showed that less than a fifth of large companies in the United States offered health insurance plans that covered weight loss drugs.

Lawmakers, notably Sen. Bernie Sanders, I-Vt., have said that because of the high cost of the drugs, it could “bankrupt” the health care system if the federal government provided coverage. Earlier this year, the Senate Committee on Health, Education, Labor and Pensions, chaired by Sanders, grilled Novo Nordisk’s CEO over the price of Ozempic and Wegovy.

In a statement following the Biden administration’s announcement, Sanders said, “The good news is that HHS recognizes that vital anti-obesity medications like Wegovy and Zepbound should be made available to all Americans, regardless of income.”

Sanders added, “The bad news is that unless Medicare requires Novo Nordisk and Eli Lilly to significantly lower the prices of these anti-obesity drugs, Medicare premiums for all seniors will skyrocket.”

Outside experts weren’t so sure.

“Will it break the bank? I don’t think so,” said Dr. Susan Spratt, an endocrinologist and senior medical director in the Population Health Management Office at Duke Health in North Carolina. “If we reduce dialysis, stroke, heart attack, sleep apnea, blindness, disability, the cost of overall care should go down.”

Weight loss medications such as Wegovy are injectable medications of semaglutide. The drugs work because they mimic a hormone called GLP-1, which helps control blood sugar, regulate people’s metabolism and help them feel full.

Drugmakers are working on dozens more GLP-1 drugs, studying their long-term effects and exploring how they might help other conditions.

Studies have suggested that these types of drugs can help people reduce alcohol consumption and reduce sleep apnea, among other things.