The Biden administration has recently revealed a proposal that could significantly expand access to costly anti-obesity medications for millions of senior citizens and individuals with lower incomes in the United States. According to a White House fact sheet, approximately 3.4 million Medicare beneficiaries and around 4 million Medicaid recipients are expected to benefit from this initiative, which could provide coverage for drugs that can cost uninsured individuals up to $1,000 per month. The proposal aims to reduce out-of-pocket expenses for some Medicare enrollees by as much as 95%, thereby alleviating the financial burden associated with these treatments.

"By allowing Americans and their healthcare providers to determine the most suitable course of action, this proposal empowers them to lead healthier lives without the stress of affording these medications, ultimately reducing the overall healthcare costs for our nation," stated the administration. Currently, Medicare is legally prohibited from covering weight loss drugs; however, the Centers for Medicare and Medicaid Services (CMS) is proposing a reinterpretation of the statute to permit coverage for obesity treatments as a chronic disease.

"The medical consensus today recognizes obesity as a chronic disease," said Chiquita Brooks-LaSure, the CMS administrator. "It is a severe condition that not only increases the risk of premature death but can also lead to other serious health complications, such as heart disease, stroke, and diabetes." In 2022, 22% of Medicare enrollees were diagnosed with obesity, more than double the number from a decade ago. Overall, around 40% of American adults are affected by obesity.

The proposed expansion of coverage, set to commence in 2026, will not include individuals who are merely overweight. The reinterpretation would also extend to the Medicaid program, ensuring that medications used to reduce excessive body weight and maintain long-term weight loss as part of obesity treatment cannot be excluded from coverage. The estimated cost of the Medicare coverage expansion over a decade is $25 billion, with no anticipated short-term impact on drug plan premiums, according to Meena Seshamani, director of the Center for Medicare.

Expanding Medicaid coverage is projected to cost the federal government $11 billion and states $3.8 billion over the same period, as reported by Dan Tsai, director of the Center for Medicaid and CHIP Services. However, the future of this proposal remains uncertain, as it cannot be finalized before President Joe Biden's term ends in January. The incoming administration's stance on expanding coverage for anti-obesity drugs is unclear, as Robert F. Kennedy Jr., President-elect Donald Trump's choice to lead the Department of Health and Human Services, has expressed disapproval of these medications in the past, advocating for providing better food options as a more cost-effective solution to obesity.

On the other hand, Dr. Mehmet Oz, who has been tapped by Trump to head the CMS, has publicly endorsed anti-obesity drugs on his talk show and social media platforms. "For those looking to shed a few pounds, Ozempic and other semaglutide medications can offer significant assistance," Oz stated on Instagram last year. "We must make it as easy as possible for individuals to achieve their health objectives, period."

The high cost of anti-obesity drugs, including GLP-1 medications like Wegovy and Zepbound, has been a barrier for many Americans seeking these treatments. The list price for a four-week supply of Wegovy, for instance, is approximately $1,350. The CMS paved the way for Medicare coverage of Wegovy in March after the US Food and Drug Administration approved it for adults with cardiovascular disease who are either obese or overweight. Several insurers providing Medicare Part D drug plans have since indicated they would cover the medication.

According to an analysis by KFF released in April, around 3.6 million Medicare enrollees with cardiovascular disease could become newly eligible for Wegovy, representing about a quarter of Medicare enrollees with obesity or overweight. Approximately 1.9 million of these individuals also have diabetes and may have already been eligible for Medicare coverage of other GLP-1 medications for diabetes, such as Ozempic.

The coverage expansion could result in an annual cost of nearly $3 billion for Medicare and potentially lead to higher Part D premiums for all beneficiaries, as found by the KFF analysis. A recent report from the Congressional Budget Office suggests that fully expanding GLP-1 coverage to Medicare enrollees with obesity or overweight would cost $35 billion over nine years, with minimal savings from improved health outcomes.

Currently, only 13 states cover GLP-1 medications for obesity treatment, with half of the states not currently covering these drugs expressing consideration of adding them, albeit with cost concerns. Job-based health insurance plans are not uniform in their coverage of anti-obesity medications, although larger employers are more likely to offer this benefit. According to KFF's annual Employer Health Benefits Survey, which includes firms with 200 or more employees, 18% of companies cover GLP-1 drugs primarily for weight loss, with about a quarter indicating they are very or somewhat likely to initiate coverage in the next year.