The soaring demand for Ozempic, initially approved for Type 2 diabetes, highlights a complex issue facing state Medicaid programs: coverage of GLP-1 drugs for weight loss. A photo depicting boxes of Ozempic on a pharmacy counter underscores the drug’s popularity, driven by its weight-loss benefits. Currently, thirteen states incorporate GLP-1 drugs into their Medicaid programs, with others actively considering similar initiatives.
Dr. Sarah Ro, a weight management physician with three decades of experience, emphasizes the significant health burden carried by many Medicaid patients struggling with obesity. These individuals, often described as “yo-yo dieters,” face numerous health complications despite persistent efforts to manage their weight. She sees GLP-1 drugs like Ozempic, Wegovy, and Zepbound as a potential solution. These medications mimic a gut hormone, regulating blood sugar and suppressing appetite.
However, the high cost of GLP-1s – ranging from $940 to $1,350 monthly before insurance – presents a significant barrier to access. This financial hurdle is prompting a debate among state Medicaid administrators about coverage for weight loss, balancing concerns about health equity with budgetary constraints. The long-term cost-effectiveness of such coverage remains a subject of ongoing research.
North Carolina’s decision last August to cover certain FDA-approved GLP-1s for obesity treatment, followed by South Carolina in November, exemplifies this evolving landscape. At least twelve other states have implemented similar coverage. Kody Kinsley, former North Carolina Department of Health and Human Services secretary, justified the decision based on both ethical considerations and potential long-term cost savings for the state’s Medicaid program, which spends approximately $1 billion annually on obesity-related expenses. He estimates the GLP-1 coverage will cost approximately $16 million annually, a sum he considers manageable compared to other expensive drug coverages. Kinsley argues that societal opposition to covering a drug often correlates with the stigmatization of the associated disease, but that obesity is a recognized medical condition requiring appropriate treatment.
A KFF survey reveals that half of the remaining states are considering GLP-1 coverage, but the high cost continues to be a major deterrent despite federal matching funds and manufacturer rebates. Medicaid spending on GLP-1s has risen dramatically from $597.3 million in 2019 to $3.9 billion in 2023, although separating the costs attributable to obesity versus diabetes remains challenging.
While some states anticipate long-term cost savings from reduced chronic illness, researcher John Cawley cautions that cost savings from GLP-1s for obesity treatment depend heavily on the patient’s initial BMI. Significant savings are more likely for individuals with a BMI of 40 or higher, but even then, may not fully offset the drug’s cost.
Dr. Ro underscores the socio-economic factors contributing to obesity in vulnerable communities, describing the prevalence of “obesogenic environments” characterized by limited access to healthy food and opportunities for exercise. In North Carolina, where 70% of residents are overweight or obese, and obesity rates are disproportionately high among minority groups, the need for accessible treatment options is particularly acute. This disproportionate impact is further highlighted by the fact that most Medicaid enrollees in the state are people of color.
The Biden administration’s November proposal to mandate GLP-1 coverage for weight loss under Medicaid and Medicare—estimated to cost the federal government $11 billion over ten years and states $3.8 billion—adds another layer to this complex issue. The incoming Trump administration’s decision on this proposal will significantly shape the future of GLP-1 access for millions. Despite these uncertainties, Dr. Ro emphasizes the potential life-saving benefits of GLP-1s for high-risk patients with severe comorbidities. The debate continues, balancing financial concerns with the imperative of equitable healthcare access and improved patient outcomes.