Aug 2, 2023 - Health

Medicare could save billions covering obesity meds: study

illustration of price tag hanging on bag of medicine

Illustration: Sarah Grillo/Axios

Medicare coverage of obesity drugs could save taxpayers as much as $245 billion over a decade by reducing demand for hospital care and skilled nursing, according to new research from the USC Schaeffer Center for Health Policy and Economics.

Why it matters: The study attempts to put a price tag on the public health benefits from expanding coverage as a new class of obesity drugs hits the market.

  • Medicare and most private insurers have a moratorium on covering obesity drugs due to concerns over safety and their effectiveness. There also are worries over how broad coverage could weigh on Medicare's finances.

What they found: Medicare coverage of weight-loss therapies would save the program $175 billion to $245 billion, depending on whether private insurance also covers the treatments.

  • More than 60% of savings would be in Medicare Part A through reduced hospital inpatient care and skilled nursing care.
  • Reducing obesity rates would also decrease the incidence of related conditions like heart disease and diabetes that each independently raise medical spending.

Catch up quick: Five Food and Drug Administration-approved drugs are currently on the market and can help reduce body weight by as much as 16%, with a sixth expected later this year.

  • Just 1% of Americans eligible for treatment have access to them because of coverage limits, USC Schaeffer says.
  • Bariatric surgery is another option for some patients, but only about 1% of those eligible opt for it due to potential risks and out-of-pocket costs.

Related: The potential downsides of new blockbuster obesity drugs

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