Biden proposes insurance requirements for weight-loss drugs for Medicare and Medicaid

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

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

Medicare is not allowed to cover weight loss medications unless they are used to treat conditions such as diabetes or to treat an increased risk of heart disease. States can choose whether to cover obesity medications under Medicaid, but the majority do not.

The Biden administration is proposing to reinterpret the insurance ban law by classifying obesity drugs as a treatment for a “chronic disease” rather than a weight-loss medication.

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

The change would dramatically reduce out-of-pocket costs for the medication. A White House official estimates that a month’s supply of weight-loss medications can now cost $1,000 or more.

The majority of those costs will be covered by the federal government, about $25 billion for Medicare and $11 billion for Medicaid over 10 years, administration officials said Tuesday. States will have to pay about $3.8 billion.

They do not assume that this will increase the deductible premiums.

“The Inflation Reduction Act has made historic progress in reducing prescription costs for our nation’s seniors and Medicare recipients, including a $2,000 out-of-pocket cap and IRA premium stabilization guidelines,” said Dr. Meena Seshamani, deputy administrator of the CMS, made 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 whether to finalize it.

Larry Levitt, executive vice president for health policy at KFF, a nonprofit group that researches health policy issues, said it is “an open question” whether the new Trump administration will follow through since Robert F. Kennedy Jr. did not I’m so excited about the class of drugs.

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

“RFK Jr. has expressed skepticism about these drugs, but Dr. Oz praised her,” Levitt said, referring to Mehmet Oz, Trump’s pick to head the CMS. “Ultimately, this decision will likely be made by the White House, which may be reluctant 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 you at risk for heart disease, diabetes, breathing problems, stroke and some 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.

According to the CMS, about 72 million Americans were enrolled in Medicaid as of July. Nearly 68 million are enrolled in Medicare.

According to KFF, an additional 154 million Americans receive health insurance through their work.

Research suggests that there are significant differences in the use of weight loss medications. Health analytics firm PurpleLab found racial disparities in who can receive semaglutide, the ingredient in Ozempic and Wegovy.

According to the company’s data, about 85% of semaglutide prescriptions in 2023 were dispensed to white people. When insurance doesn’t cover the drug, the high cost poses a barrier for many low- and middle-income Americans, doctors say.

Expanding coverage to patients who rely on Medicare and Medicaid could reduce some disparities.

“Our Medicare and Medicaid populations are among the most vulnerable populations and lack access to obesity medications,” said Dr. Laure DeMattia, a bariatric medicine specialist in Norman, Oklahoma, told NBC News in March.

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

As the drugs’ popularity increases and employers balance program costs with the needs of their employees, the issue is increasingly becoming a workplace issue.

Survey results published last month in Health Affairs found that fewer than a fifth of large companies in the United States offered health insurance that covered weight-loss medications.

Lawmakers, particularly Sen. Bernie Sanders, I-Vt., have said that the high cost of the drugs could lead to a “bankruptcy” of the health care system if the federal government were to cover the costs. Earlier this year, the Sanders-led Senate Committee on Health, Education, Labor and Pensions criticized the CEO of Novo Nordisk 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 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 reduce the prices of these obesity drugs, Medicare premiums for all seniors would 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 at the Population Health Management Office at Duke Health in North Carolina. “If we reduce dialysis, strokes, heart attacks, sleep apnea, blindness and disabilities, the cost of overall care should go down.”

Weight loss medications like Wegovy are injectable semaglutide medications. The drugs work because they mimic a hormone called GLP-1, which helps control blood sugar, regulate metabolism and promote satiety.

Drugmakers are working on dozens of other GLP-1 drugs, studying their long-term effects and researching how they might help other diseases.

Studies have shown that this type of medication could help reduce alcohol consumption and reduce sleep apnea, among other things.