Federal health management authorities contemplate potential reversal in insurance coverage for GLP-1 treatments pertaining to obesity, as per recent reports
Medicare Part D and Medicaid Shift Towards Covering Weight Loss Drugs
In a significant change of policy, Medicare Part D is moving towards covering GLP-1 drugs like Ozempic and Wegovy for weight management and obesity. This shift comes after the Trump administration had explicitly declined to cover these drugs for weight loss.
Under the Trump administration, which lasted up until April 2023, Medicare and Medicaid did not cover GLP-1 drugs for weight loss. This decision was primarily due to concerns about the high costs, inconsistent medication adherence, and insufficient long-term evidence that GLP-1-induced weight loss translated to sufficient Medicare savings to justify the expense.
In contrast, the Biden administration, towards the end of its term, proposed a rule to allow Medicare coverage of GLP-1 weight loss drugs. The aim was to extend access to about 7 million Americans and to empower Medicare to negotiate prices for drugs like Wegovy starting in 2027. However, this was reversed by the new Health and Human Services Secretary Robert F. Kennedy Jr., who has expressed skepticism about the drugs' cost and prefers traditional interventions like diet and exercise before federal coverage.
As of early August 2025, the issue remains subject to cost-benefit assessments by the Centers for Medicare and Medicaid Services (CMS) and political considerations. However, 13 states have opted to cover GLP-1s for weight loss, aligning with a new proposal encouraging broader coverage under Medicare and Medicaid.
The CMS is reportedly conducting a cost-benefit review for all drug coverages, but has not commented on the specifics of the proposed program. If implemented, the proposal would be a five-year pilot program. A CMS spokesperson noted that the agency "may consider future policy options" for anti-obesity drugs pending further review.
Individual state Medicaid and Medicare Part D plans can voluntarily opt to cover Novo Nordisk's semaglutide brands Ozempic and Wegovy or Eli Lilly's tirzepatide drugs Mounjaro and Zepbound. Zepbound was approved for sleep apnea in December 2024 and granted CMS coverage weeks later. Novo Nordisk snagged Medicare coverage for Wegovy for the reduction of the risk of heart attack, stroke, and other related cardiovascular issues in patients who have preexisting heart disease in March 2024.
The proposed program, if it led to wider changes in coverage, could be a "game changer" for patients, according to former CMS administrator Chiquita Brooks-LaSure. Eli Lilly blasted CMS's decision to leave obesity coverage out of its final ruling in May. Lilly and Novo Nordisk have taken a similar approach to circumvent CMS's refusal to cover drugs for obesity by tacking on additional indications.
The Trump administration scrapped a previous proposal from the Biden administration to include anti-obesity medications in Medicare Part D coverage earlier this year. The fact sheet for the Biden administration's previous proposal stated that the inclusion of GLP-1 drugs under Medicare Part D would recognize obesity as a chronic disease based on changes in medical consensus. The information about the proposed program was viewed by The Washington Post.
- The proposal to allow Medicare coverage of GLP-1 weight loss drugs under certain conditions is currently being evaluated by the Centers for Medicare and Medicaid Services (CMS), with the potential to be a five-year pilot program.
- In contrast to Medicare, 13 states have already opted to cover GLP-1 drugs for health-and-wellness purposes, including weight management, aligning with a new proposal encouraging broader coverage under Medicaid.
- As the cost-benefit analysis and political considerations continue, pharmaceutical companies like Eli Lilly and Novo Nordisk are taking proactive steps to ensure their semaglutide and tirzepatide drugs are covered, by obtaining approvals for additional indications, such as sleep apnea and heart disease prevention.
