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