Paying for GLP-1s: Is it Time?

Is insurance coverage of pricey glucagon-like peptide 1 (GLP-1) receptor agonists for obesity about to increase dramatically?

Advocates of the anti-obesity medications are hopeful, especially if the proposed rule lifting the restriction on Medicare coverage of weight loss drugs is enacted. The comment period on the proposed rule closed on January 27, and more than 4000 comments were logged.

If finalized, the rule would greatly expand Medicare and Medicaid coverage for anti-obesity medications. It would allow Medicare and require Medicaid to cover the GLP-1 medications, as well as older anti-obesity medicines. The GLP-1s approved for weight loss, Wegovy (semaglutide) and Zepbound (tirzepatide), can cost $1000 a month or more without insurance.

The proposed rule reinterprets the current language, which prohibits Medicare coverage for weight loss drugs and permits, but doesn’t require, Medicaid coverage. If the rule becomes effective, about 3.4 million Medicare recipients would obtain access to the obesity medications and about 4 million Medicaid enrollees may gain access. Currently, 13 states cover GLP-1s for obesity under Medicaid.

Next, obesity experts said, they would expect broader coverage by private insurers, following a pattern they’ve seen with other medications and procedures after Medicare began to cover them.

“We are cautiously optimistic that the Trump administration is taking this seriously,” said Joe Nadglowski, president and CEO of the Obesity Action Coalition, a Tampa, Florida-based patient advocacy organization of more than 100,000 people.

The organization has been advocating for the coverage of obesity medications since the Obama administration. The Biden administration called for the change to the rule in November. Most of the 4000 submitted comments are positive, Nadglowski said.

Optimism Amid Unknowns

But exactly what will happen over the next few weeks is only speculation. Robert F. Kennedy Jr, Trump’s pick to head the Department of Health and Human Services, which oversees Centers for Medicare and Medicaid Services (CMS), has not yet been confirmed. Kennedy has been critical of the weight loss drugs in the past, suggesting Americans simply eat better to lose weight and maintain the loss. However, he seems to be softening that stance recently.

In Senate committee hearings on January 29 and 30, senators grilled Kennedy on his views on many areas, including GLP-1s. When asked about his stand on GLP-1 medications for obesity, Kennedy told Sen. Andrew Kim (D-New Jersey): “GLP-1 drugs, the class of drug, are miracle drugs, but I do not think they should be prescribed for 6-year-old kids,” calling that the standard of practice now. (The medications are not approved for children younger than 12 years.)

Asked if he would move forward with the CMS proposal to cover these medications for obesity by Medicare and Medicaid, Kennedy said he would work with the CMS administrator to “take a holistic look at the Medicare and Medicaid programs to ensure that they are working to keep Americans healthy.” On the use of anti-obesity medications, he said he would ensure that the United States Department of Health and Human Services programs and policies are “transparent, evidence-based, and informed by the strongest possible science.”

Another recent development is the addition of semaglutide (Wegovy, Ozempic, Rybelsus) as one of 15 additional drugs covered under Medicare Part D for price negotiations. Asked about his stance on that, Kennedy said he has no plans to change that as “Congress directs the spending of taxpayer dollars, including through Medicare payment and coverage policies.”

When Medicare Leads, Other Insurers Follow

“If Medicare and Medicaid start providing broader coverage, there will be pressure for other insurers to follow,” said Alison Sexton Ward, PhD, an economist at the University of Southern California’s Leonard D. Schaeffer Center in Los Angeles, who published a white paper citing the social benefits and medical cost savings from giving people broader access to the newer medications for weight loss. “I think there’s already pressure on insurers that will grow if Medicare starts to cover GLP-1s.”

Nadglowski agreed that Medicare coverage will affect others’ decisions. He cites the Medicare decision in 2006 to cover bariatric surgery; private insurers followed suit. Currently, he said, “Most Americans have coverage for behavioral counseling under the Affordable Care Act,” and about 70% have coverage for bariatric surgery.

Demand for the medications for weight loss is ongoing. According to a 2024 poll, 1 in 8 Americans reported they have taken a GLP-1 for diabetes, weight loss, or cardiovascular disease prevention. About 4 in 10 cited weight loss as the reason to take the medications.

Coverage is “a bumpy road,” Nadglowski said. “We are seeing increases in coverage overall, but it’s slow.” In a 2024 Mercer survey of 2194 employers, 44% of all large employers (with ≥ 500 employees) covered the drugs for weight loss, up from 41% the previous year. Of those employers with ≥ 20,000 employees, 64% covered, up from 56% in 2023.

Coverage is not always consistent, Nadglowski added. In North Carolina, for instance, Medicaid recipients who qualify for the medication obtained coverage August 1, but coverage for the weight-loss drugs was dropped earlier in 2024 for state employees due to costs.

Like others, Sexton Ward stressed that the medications are part of a multifaceted approach that also focuses on healthy food options and exercise. Noting Kennedy’s “Make America Healthy Again” movement, including his plan to target and reduce ultra processed and other unhealthy foods, she said allowing broader access to the obesity medicines could be used along with applying pressure to the food industry to make big changes.

Other insurers are closely watching the proceedings about the proposed rule, said Cristy Gallagher, associate director of research and policy at STOP Obesity Alliance at the Milken Institute School of Public Health at George Washington University in Washington, DC. They see the benefits and they know employees want access to the medications without the high prices, she said.

“In the long run, it will save on healthcare costs in the future,” she said. “But to get those costs down is not automatic. It will take time.”

Cost Concerns; Benefits Beyond Weight Loss

Exactly how much increased coverage by Medicare and Medicaid will cost is debated. Over the next 10 years, the proposal would increase Medicare spending by about $25 billion and Medicaid by about $15 billion, according to the federal Office of Health Policy. As the states and the federal government share Medicaid costs, the federal government would be expected to pay about $11 billion of that compared with about $4 billion by the states.

An earlier Congressional Budget Office report estimated higher costs, with authorization of anti-obesity medicine for Medicare increasing federal spending by $35 billion in the years 2026-2034.

But on the other side of the column, in Sexton Ward’s white paper, she estimated Medicare coverage of the medications could generate $4 trillion in social benefits over three decades.

Increased coverage will translate to benefits over time, agreed Kenneth E. Thorpe, PhD, a health policy expert and professor of health policy at Emory University Rollins School of Public Health, Atlanta. In his recent report, he found reduced healthcare spending linked to use of the medications.

As the percentage of weight loss increased, so did the savings on annual healthcare spending, he found. Thorpe found that in adults on Medicare with one or more comorbid conditions, who lost 5% of their weight were saving $1262 per year on healthcare costs. A 25% weight loss was estimated to save them an average of $5442.

The weight loss “does have an impact on reducing the likelihood of having a stroke, a heart attack, an emergency room visit, a clinic visit because you have uncontrolled hypertension, uncontrolled blood sugar levels, and so on,” Thorpe said. “So we know immediately it has effects.”

Research is accumulating on the medications’ long-term effects in reducing chronic disease, he said.

“Over the next year or so, prices are going to continue to go down,” Thorpe said, citing increased manufacturing of the medications and the coming competition, as new anti-obesity medications are in phase 3 trials.

Nadglowski, Sexton Ward, Thorpe and Gallagher had no disclosures.