Insurers push back on Medicare and Medicaid coverage for GLP-1s
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Health plans are lobbying the Trump administration to scrap a proposal dating from the final days of the Biden administration that would require Medicare and Medicaid to cover anti-obesity drugs, including GLP-1s, for weight loss.
Why it matters: The final decision, expected in April, is an important barometer of which health care interests have President Trump's ear, since many providers, patients and drugmakers want Medicare to cover the products.
- Insurers who administer Medicare and Medicaid benefits argue they'd end up having to pass the added cost to consumers in the form of higher premiums.
The big picture: The Biden plan came amid surging demand for GLP-1s like Wegovy and Ozempic. It would reinterpret a long-standing Medicare prohibition on covering drugs for weight loss, making them more accessible to millions of Americans and potentially lowering the prevalence of obesity-related illnesses.
By the numbers: The annual cost of GLP-1s can be upwards of $11,000. The Centers for Medicare and Medicaid Services estimated its proposal would cost the federal government nearly $40 billion over 10 years.
- But obesity comes with its own costs: A 2023 paper from University of Southern California estimates that covering weight-loss drugs would save Medicare more than $175 billion over 10 years.
State of play: CMS received nearly 25,000 comments on the rule, many from individuals describing their own positive experiences with the drugs and urging policymakers to expand coverage.
- Medicare currently only covers GLP-1s for diabetes and heart disease. Congressional scorekeepers found in October that alone means Medicare already covers GLP-1s for half of seniors with obesity.
But insurers say the policy to expand coverage is rushed, too broad and may be illegal.
- AHIP, the largest trade association for health insurance companies, said last month that the proposal could "subvert congressional intent," hinting at the possibility of a lawsuit if CMS finalizes the policy.
- While targeted use of GLP-1s for obesity could be useful, blanket Medicare coverage is "a complete and total budget buster," said Ceci Connolly, CEO of the Alliance of Community Health Plans.
- "To be spending big, big bucks on something that still has so many unknowns really jeopardizes the limited dollars and resources that a plan has," she said.
The intrigue: Employers and insurers are often on the same page when it comes to coverage questions, but some employers see Medicare and Medicaid coverage of GLP-1s as a necessary investment.
- "Often, employers hire seniors and people with Medicaid who deal with obesity and its complications," John Falconetti, CEO of printing technology company Drummond Press, wrote in a letter to Medicare officials.
- "The loss in productivity and costs involved with treatment strain our economy, and expanded coverage through Medicare Part D and Medicaid will help individuals deal with this problem," he added.
Between the lines: Physicians want the policy to move ahead, but they're concerned about how it could affect seniors' insurance premiums.
- The American Medical Association wrote in its comment letter to CMS that the agency should make sure that covering anti-obesity medications doesn't raise beneficiaries' costs.
Where it stands: Health and Human Services Secretary Robert F. Kennedy Jr. said during his confirmation hearing that GLP-1s are "miracle drugs" but said he had concerns about the cost of covering the drugs for the federal government.
- "They have all kinds of bad side effects, about half the people on GLPs get off of them after two years and then there's problems when you get off them," he told senators.
