The Centers for Medicare and Medicaid Services (CMS) is proposing a new rule that would recognize obesity as a chronic disease. This would allow Medicare and Medicaid to cover medications that treat obesity, potentially affecting millions of people. It would take effect in 2026, but the chances that it would survive under the incoming Trump administration are in doubt.
Medicare and Medicaid provide limited coverage for obesity drugs now. Medicare Part D does not cover medications used specifically for weight loss or obesity treatment. It can only cover them if they’re prescribed for other approved conditions, such as Type 2 diabetes or heart disease.
Medicaid coverage varies by state, but many states also exclude weight loss drugs unless they’re treating a related medical issue.
The out-of-pocket price for one month of Ozempic is over $900. Investopedia research of nine insurance companies that cover Ozempic under Medicare Part D for a prescribed condition found that a year’s supply costs an average of $539. Those consumers are already saving an estimated $10,000 a year, and if the rule change goes through, many more would be eligible for such savings.
More than two in five adults have obesity. Among Medicare beneficiaries, 22% had a diagnosis of obesity in 2022. It’s linked to chronic diseases like diabetes and heart disease, and accounts for more than $217 billion in medical expenditures.
The new rule could benefit some of these Americans, but it would also cost billions. CMS expects the rule would increase Part D spending by $24.8 billion and Medicaid spending by $14.8 billion over 10 years.
While the rule would affect people with obesity, it would not extend coverage to people classified as overweight. (Someone is considered overweight if they have a body mass index (BMI) of 25 to 29.9. They’re considered obese if their BMI is 30 or higher.) People who are overweight would still need to have another condition to get coverage for anti-obesity drugs.
Shares of Eli Lilly and Novo Nordisk rose after the proposed rule was announced. Eli Lilly manufactures weight loss drugs Mounjaro and Zepbound, while Novo Nordisk manufactures Wegovy and Ozempic.
The proposed rule is under review and is open for comments until Jan. 27, 2025, so the incoming Trump administration will have the final say on whether it becomes policy. Robert F. Kennedy Jr., who is nominated to lead the Department of Health and Human Services under the new president, has said Ozempic would not “make America healthy again.”
In an October interview on Fox News, Kennedy made misleading claims that the European Union is investigating Ozempic for suicidal ideation. He estimated that the cost of making Ozempic available to all overweight Americans would be $3 trillion and said he favors dietary and behavioral changes instead.
“If we spend about one-fifth of that giving good food, three meals a day, to every man, woman and child in our country, we could solve the obesity and diabetes epidemic overnight for a tiny fraction of the cost,” he said.
A bill that would require Medicare Part D to cover drugs to treat obesity and for weight loss management for overweight people has received bipartisan support, but has yet to be brought to a vote in the House of Representatives or Senate.
Meanwhile, Dr. Mehmet Oz, who Trump has nominated to run CMS, has praised Ozempic as a “game changer,” and toted a cinder block on his show to demonstrate how much weight patients could lose.
Trump himself has had little to say about Ozempic, Medicare, or Medicaid, said Sheila Lynch-Afryl, a senior legal analyst for Wolters Kluwer.
“His overarching principle seems to be saving money and reining in spending, so part of me would be surprised if he actually approved this,” she said.
The new administration can immediately quash the proposed rule, Lynch-Afryl said. A good example is Section 1557 of the Affordable Care Act, which includes the law’s rules on nondiscrimination. Guidance on implementing the section when it comes to protections for transgender people has veered back and forth, depending on who was in office.
“Every new administration rescinds rules that have been finalized,” Lynch-Afryl said. “And this rule isn’t even finalized, it’s just proposed.”
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