Signs Point To Possible Future Medicare Coverage Of Obesity Meds

Forbes

05-08-2025

Signs are pointing in the direction of a near future in which Medicare beneficiaries will have at least some access to weight loss drugs. It's a two-pronged approach, though both pathways are independent of each other. First, there's a renewed bipartisan effort in Congress to lift the prohibition on coverage of obesity medications in Medicare. Second, the Trump administration announced the launch of a pilot project which could provide better access to obesity drugs. All things considered, however, getting the federal government program to pay for weight loss medications still won't be easy.
Roughly 40% of adult Americans are considered obese. Obesity increases the risk of developing conditions such as diabetes, heart disease, osteoarthritis and some cancers. Rates of obesity have been steadily rising since 1980. Medications known as glucagon-like peptide-1 agonists, or GLP-1s, have become popular as weight loss therapeutics. Taken in accordance with the instructions on the label and an appropriate diet and exercise regimen, GLP-1s are effective at lowering a person's weight.
But Medicare doesn't allow coverage of weight loss medications that are strictly being used for obesity. It can only pay for them if they're prescribed for a related condition, such as diabetes or heart disease. Lawmakers have resubmitted different versions of a bill to permit such coverage numerous times since 2013. Senator Bill Cassidy (R-LA) reintroduced the Treat and Reduce Obesity Act this summer to 'combat the obesity crisis in the United States by providing regular screenings. The bill would also prevent diseases associated with obesity through expanded coverage of new healthcare specialists and chronic weight management medications for Medicare recipients.' However, it's this last item which would lift the 20-year prohibition on coverage that's been a limiting factor that has prevented previous versions of the legislation from passage.
The cost of reimbursing these medications has often been cited as a stumbling block. The nonpartisan Congressional Budget Office, for instance, published projections late last year that estimated it would cost Medicare a cumulative $35 billion from 2026-2034 to cover anti-obesity medications. While CBO included savings from improved health, these were not nearly sufficient to offset the costs of the medications.
Part of the problem is that patients who are treated with GLP-1s discontinue such treatments at a relatively high rate. One study, for example, found that approximately 53% of patients with overweight or obesity taking semaglutide-based followed for up to a year didn't persist on treatment past two months. The cost estimates used by the Centers for Medicare and Medicaid Services assume that a relatively high percentage of patients will stop taking them shortly after beginning their regimen.
And so, there are still questions about whether this latest reintroduction of TROA will be successful. Moreover, even if the proposed legislation were to pass, enactment wouldn't happen until at least two years after passage.
Another route is possible, via a regulatory pathway initiated by the executive branch. At the end of its tenure, the Biden administration proposed a regulatory change that would permit coverage of obesity drugs with some restrictions. Upon taking office, the Trump administration nixed the proposal. Nevertheless, it now intends to pursue a demonstration project under authority granted by the Affordable Care Act to experiment with models that seek to improve quality of care and lower costs.
Under a Center for Medicare and Medicaid Innovation initiative, state Medicaid programs and Medicare outpatient drug (Part D) plans could soon voluntarily choose to cover obesity drugs for weight management, the Washington Post reported, citing documents from the Centers for Medicare and Medicaid. A Medicaid experiment would commence in Apr. 2026; Medicare in Jan. 2027.
Timing for the Medicare portion of the planned model coincides with implementation of a maximum fair price for Wegovy in 2027. Together with Ozempic, another semaglutide-based product, Wegovy was selected for Medicare price negotiation earlier this year under an Inflation Reduction Act provision. Presumably, this would provide the federal government with an even lower net price than is currently attainable.
Nonetheless, challenges lie ahead. The plan has not been finalized. Nor have any details been divulged. Without information on how prescription drug plans or Medicare Advantage insurers would be incentivized to sign up, it's unclear who would be interested in adding coverage.
Aside from government-initiated changes, it's possible that certain commercial insurers and perhaps even some Medicaid payers will decide to revisit their coverage decisions if net costs decrease sufficiently, combined with more data showing the benefits of weight loss drugs when taken consistently and in conjunction with an appropriate nutrition regimen and physical activity. There's encouraging data in this regard which was posted in late June by the pharmacy benefits manager Prime Therapeutics. Recent initiators on high potency Wegovy and Zepbound—who started treatment in 2024—appear to be staying on their medications longer. The year-over-year persistence analysis found one-year persistence nearly doubling from 33.2% in 2021 to 62.7% in 2024. This in turn could confer improved, sustained benefits, in which case there would likely be less weight rebound upon discontinuation. But more research is needed to confirm the observed trend.
Another thing that could galvanize payers towards targeted coverage is if they adopt an evidence-based approach that differentiates sub-populations by risk. All or nothing reimbursement makes little sense for insurers in both the commercial and public sectors. At current prices, most cost-effectiveness analyses fail to show cost savings except for when applied to high-risk groups, such as people with established cardiovascular disease, chronic kidney disease or severe obesity. A differentiated approach to access could also help mitigate costs for Medicare which in turn could serve as an impetus to pass legislation.