New Proposal Seeks to Expand Medicare, Medicaid Coverage for Antiobesity Drugs

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Medicare Part D and Medicaid would expand drug coverage to include new antiobesity medications, according to a proposal by the administration of President Joe Biden.

The US Centers for Medicare & Medicaid Services (CMS) announced the proposal for the contract year 2026 proposed rule for Medicare Advantage and Medicare Part D. The rule aims to hold the plans “more accountable for delivering high-quality coverage so that people with Medicare are connected to the care they need when they need it,” the announcement said.

Allowing the coverage would change a policy in place more than 20 years. The Medicare Modernization Act of 2003 prohibited coverage of all drugs for weight loss, according to the Committee for a Responsible Federal Budget.

The change could affect millions of beneficiaries and add billions of dollars to Medicare spending. But it was unclear exactly what would happen when Biden leaves office and former President Donald Trump returns to the White House. The administration published an official notice about the 2026 rule in the Federal Register with a comment period that runs to January 27, 2025 – a week after Trump’s inauguration.

Meanwhile, the president-elect has tapped Robert F. Kennedy Jr. to lead the US Department of Health and Human Services, Medicare’s governmental parent. News reports have cited Kennedy’s comments earlier this year opposing use of the drugs, such as Ozempic (semaglutide), a diabetes drug prescribed off label for weight loss.

The announcement

“In recognition of the prevailing medical consensus that obesity is a disease, CMS is proposing to reinterpret the statute to no longer exclude antiobesity medications for the treatment of obesity from coverage under Medicare Part D and to require Medicaid programs to cover these medications when used to treat obesity,” the CMS announcement said. “This proposal would provide more Americans access to these transformative medications, improving the health and quality of life for millions of people who have obesity.”

The announcement included statements from leaders at CMS and its parent, the US Department of Health and Human Services (HHS).

“Our loved ones with Medicare deserve care that puts their interests first. HHS is proposing to improve transparency, accountability, and consumer protections in Medicare Advantage and Part D plans so that everyone receives high-quality care,” HHS Secretary Xavier Becerra said in the statement. “To achieve that, we want to remove barriers that delay care or deny people services and medications they need to be healthy. In addition, we continue to promote competition for pharmacies and other health care businesses.”

Potential widespread use

An estimated 42% of the US population has obesity, “now widely recognized as a chronic disease” that increases risks of diabetes, cardiovascular disease, stroke, some cancers, and more, said a statement published by the White House.

Research has shown the new antiobesity drugs have life-saving health effects. They also are expensive, as much as $1000 a month for patients without insurance coverage, the White House statement said. Medicare coverage would cut those costs by as much as 95% for some enrollees.

The president’s statement said timing is a factor. New negotiated prices for the most-prescribed drugs will go into effect in 2026 for Medicare.

“The proposed rule would be implemented at the same time as a comprehensive agenda to lower the costs of drugs, including the drug price negotiation program and increased market competition,” the White House statement said. “We can lower drug prices and improve health outcomes for Americans.”

What is the cost?

This fall the Congressional Budget Office (CBO) published a report that mentioned the glucagon-like peptide-1 receptor agonist drugs (GLP-1 RAs) originally used to treat diabetes.

If Medicare paid for them, the exact cost is not known. CBO estimated expanded coverage would be $35 billion from 2026 to 2034. Direct federal costs for the drugs would jump from $1.6 billion in 2026 to $7.1 billion in 2034.

How much money would be saved through better health? “Relative to the direct costs of the medications, total savings from beneficiaries’ improved health would be small—less than $50 million in 2026 and rising to $1.0 billion in 2034,” said the CBO report, “How Would Authorizing Medicare to Cover Anti-Obesity Medications Affect the Federal Budget?”

CBO estimated more than 12.5 million Medicare beneficiaries would qualify for the new coverage in 2026, but just 300 000, or 2%, would use them. By 2034, the estimated number of qualifying beneficiaries would dip to 11.9 million, with an estimated 1.6 million beneficiaries, or 14%, using them.

“Beyond 2034, the policy’s net federal costs to the Medicare program would probably be lower on a per-user basis than in the first decade for two reasons. CBO expects that the cost of the drugs will fall over time and that the savings from improved health will grow over time. Nevertheless, the policy would still increase federal spending between 2026 and 2044,” the CBO report said. The CBO report included a disclaimer noting that cost and use estimates are variable based on rapidly evolving evidence about eligibility, use, price and clinical benefits.

This article originally appeared on our partner site, Medical Economics.

Reference: Biden-Harris administration announces Medicare advantage and Medicare part D prescription drug proposals that aim to improve care and access for enrollees. News release. US Centers for Medicare & Medicaid Services. November 26, 2024. Accessed November 27, 2024. https://www.cms.gov/newsroom/press-releases/biden-harris-administration-announces-medicare-advantage-and-medicare-part-d-prescription-drug