White House Proposes Covering Obesity Drugs Under Medicare and Medicaid

WASHINGTON — The Biden administration on Tuesday proposed that Medicare and Medicaid begin covering the cost of widely popular obesity medications, though the plan will need buy-in from the incoming Trump administration to take effect.

The proposal is part of an annual policy update for all Medicare drug plans and private Medicare Advantage plans starting in 2026.

New obesity drugs, including Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, have been shown to improve patient’s overall health, but legislation passed by Congress 20 years ago currently prevents Medicare from covering drugs for “weight loss.”

As outlined in the Federal Register, the Centers for Medicare & Medicaid Services would reinterpret the statute to no longer exclude anti-obesity 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. 

“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 Department of Health and Human Services said in a press release.

The new interpretation of the statute would also mean that every state Medicaid program would be required to cover the drugs starting in 2026. 

In a written statement CMS Administrator Chiquita Brooks-LaSure said this and other proposed changes to the  Medicare Advantage and Part D prescription drug programs would ensure that both programs continue to “work” for program participants while holding plans accountable for providing high-quality health care.

“This proposed rule continues to build on this work by expanding access to anti-obesity medications for people with Medicare and Medicaid, further addressing prior authorization concerns in Medicare Advantage, and promoting informed choice and transparency by requiring Medicare Advantage plans to share provider directory information on [the] Medicare Plan Finder,”  Brooks-LaSure said.

The agency estimates that around 3.4 million more patients in Medicare would become eligible for obesity drugs, and around four million patients in Medicaid would gain coverage. 

That increase in coverage would cost the federal government about $25 billion when it comes to Medicare, and about $11 billion for Medicaid, over the next decade.

States, meanwhile, would pay close to $44 billion to cover their share of the Medicaid bill during that time period.

Medicare covers Americans 65 and older; Medicaid covers poor and disabled Americans.

The proposed rule also addresses increasing calls for reforms related to Medicare Advantage prior authorization, utilization management and coverage decisions. 

According to the Federal Register posting, the Centers for Medicare & Medicaid Services remains concerned about barriers to accessing care and high burden on the system. 

For example, data reported to the agency by Medicare Advantage plans indicate that, on average, these plans overturn 80% of their decisions to deny claims when those claims are appealed to the plan. 

The data also shows that less than 4% of denied claims are appealed in the first place, meaning many more denials could potentially be overturned by the plan if they were appealed. 

“Ultimately, what these and other data show is that Medicare Advantage  enrollees may not be getting access to the care they need,” the agency said. 

The proposed rule builds on CMS’ work to remove unnecessary barriers to care resulting from the inappropriate use of prior authorization and internal coverage criteria. 

The rule would also increase guardrails on the use of artificial intelligence to protect access to health services. 

Other proposed policies will promote competition on the things that matter to people enrolled in Medicare Advantage and Part D plans, further addressing misleading marketing practices, and enhancing consumer tools on Medicare.gov.

“Our loved ones with Medicare deserve care that puts their interests first,” said HHS Secretary Xavier Becerra in a written statement. “HHS is proposing to improve transparency, accountability and consumer protections in Medicare Advantage and Part D plans so that everyone receives high-quality care

 “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,” Becerra said.