Medicaid Coverage for Weight Loss Medications: A Comprehensive Guide

Obesity is a significant public health concern, affecting nearly 40% of adults and 26% of children enrolled in Medicaid. This condition is linked to numerous comorbidities, including heart disease, type 2 diabetes, and certain types of cancer, leading to increased healthcare costs. Glucagon-like peptide-1 (GLP-1) drugs, initially developed for treating type 2 diabetes, have emerged as effective treatments for obesity, raising important questions about access, affordability, and coverage, particularly within Medicaid programs.

Understanding GLP-1 Drugs and Their Role in Weight Loss

GLP-1 drugs mimic a hormone in the intestinal tract to balance the body’s blood sugar levels. Newer forms of these drugs have gained widespread attention for their effectiveness as a treatment for obesity. While these drugs have provided new opportunities for obesity treatment, they have also raised questions about access to and affordability of these drugs. These medications have shown promise in aiding significant weight loss, prompting increased demand from both patients and healthcare providers. The Food and Drug Administration (FDA) has approved three GLP-1s for the treatment of obesity: Saxenda (liraglutide), Wegovy (semaglutide), and Zepbound (tirzepatide).

Medicaid's Role in Covering Obesity Drugs

States have the option to include or exclude weight-loss drugs from their Medicaid coverage. Under the Medicaid Drug Rebate Program, Medicaid programs must cover nearly all of a participating manufacturer’s Food and Drug Administration (FDA)-approved drugs for medically accepted indications. However, weight-loss drugs are included in a small group of drugs that can be excluded from coverage1. Though the statutory exception refers to agents used for “weight loss”, “obesity drugs” is used to refer to this group of medications in this analysis. As of August 2024, 13 state Medicaid programs cover GLP-1s for obesity treatment. Twelve states in KFF’s annual budget survey reported coverage of GLP-1s for obesity treatment under FFS as of July 1, 2024, and North Carolina reported adding coverage in August of 2024.

Coverage Criteria and Prior Authorization

Medicaid consumers in Pennsylvania prescribed medication for the treatment of obesity may be able to get these medications covered if they meet certain criteria. Medicaid coverage of these weight loss drugs is available to participants who meet the prior authorization criteria. In order for Medicaid to cover these new weight loss drugs, a person’s doctor must submit a prior authorization request detailing that the patient meets the coverage criteria. Generally, to get these drugs covered, adults over age 18 must have a body mass index (BMI) of 30 or higher (or 27 or higher with certain additional requirements), and they must have at least one weight-related health condition.

Dual Eligibles: Medicaid and Medicare Coverage

Importantly, this includes people who have both Medicaid and Medicare, known as “dual eligibles”. Typically, Medicaid does not provide drug coverage for dual eligibles. Dual eligibles must get their medications covered through Medicare Part D (Medicare’s prescription drug benefit). However, Medicaid can cover certain medications excluded from the Medicare Part D benefit. Medicare Part D coverage rules specifically exclude coverage of prescription medications used solely for weight loss. Another example of excluded Part D drugs that are covered by Medicaid for dual eligibles are over-the-counter medications.

Read also: Benefits of couples massage detailed

People who have diabetes or have used a diabetes drug in the previous 120 days have an additional requirement: they must try and fail treatment on one of the preferred diabetes treatment versions of the weight loss drugs, or another preferred diabetes drug in the same drug class (GLP-1 receptor agonists). The requirement to try and fail on one of the diabetes treatment drugs likely means people on both Medicare and Medicaid who have diabetes who are prescribed one of the above medications for obesity treatment/weight loss will need to seek coverage of a diabetes version of a weight loss drug through their Medicare Advantage Plan or Medicare Part D drug plan. Medicare plans do cover the diabetes drugs that have a weight loss version but may not cover all of these medications on their formulary (list of covered drugs).

The Right to Appeal

People have a right to appeal if Medicaid denies coverage for the new weight loss drugs after a doctor submits the prior authorization showing the patient meets the criteria.

State-Specific Coverage and Utilization Controls

As of July 1, 2024, twelve states in KFF’s annual budget survey reported coverage of GLP-1s for obesity treatment under FFS as of July 1, 2024, and North Carolina reported adding coverage in August of 2024. All 12 states that reported coverage of GLP-1s as of July 1, 2024 also reported that utilization control(s) applied, with the most common being prior authorization (11 of 12 states) and/or BMI requirements (11 of 12 states). Eleven of the 12 states reported covering all three GLP-1s currently approved for the treatment of obesity (Saxenda, Wegovy, or Zepbound). While the survey only asked about FFS coverage, MCO drug coverage must be consistent with the amount, duration, and scope of FFS coverage. MCOs, however, may apply differing utilization controls and medical necessity criteria unless the state’s MCO contract specifies otherwise.

North Carolina and South Carolina Coverage

Last August, North Carolina began covering some federal Food and Drug Administration-approved GLP-1s for obesity treatment among some populations. South Carolina began its coverage Nov. 1. The department expects the cost of covering GLP-1s to be about $16 million a year under the new policy.

The Financial Implications of Covering Obesity Drugs

Expanding Medicaid coverage of these drugs could increase access for the almost 40% of adults and 26% of children with obesity in Medicaid. At the same time, expanded coverage could also increase Medicaid drug spending and put pressure on overall state budgets. In the longer term, however, reduced obesity rates among Medicaid enrollees could also result in reduced Medicaid spending on chronic diseases associated with obesity, such as heart disease, type 2 diabetes, and types of cancer.

Read also: How digestive health affects weight loss

The number of Medicaid prescriptions and gross spending on GLP-1s have increased rapidly in recent years, with both nearly doubling from 2022 to 2023. Overall, from 2019 to 2023, the number of GLP-1 prescriptions increased by more than 400%, while gross spending increased by over 500%. Spending per prescription before rebates reached more than $900 per prescription in 2023. Those prices and spending numbers do not account for rebates, and states are likely receiving substantial rebates on these brand drugs. While rebate data for specific drugs is not publicly available, Medicaid and CHIP Payment and Access Commission (MACPAC) analysis of FY 2020 data found statutory rebates accounted for 61.6% of gross Medicaid spending on brand drugs. Also, amid growing criticism of the cost of their drugs, Novo Nordisk, the company that creates Ozempic and Wegovy, has said that rebates and other fees (across all payers) account for about 40% of the cost of the two drugs. Medicaid spending on GLP-1s for all conditions increased from $597.3 million for about 755,000 prescriptions in 2019, to $3.9 billion for 3.8 million prescriptions in 2023, according to KFF.

Factors Influencing Coverage Decisions

Many state Medicaid programs are considering covering obesity drugs in the future but are concerned about the cost implications. KFF’s annual budget survey found that, among those states that do not currently cover obesity drugs, half reported they were considering adding coverage, with a few states reporting plans to add or expand coverage in FY 2025 or later. When asked about the key factors contributing to their obesity medication coverage decision, almost two-thirds of responding states mentioned cost, though states are also weighing a number of other factors including the need for legislative action, adherence concerns, clinical criteria development, and potential side effects. Conversely, 4 in 10 states noted that positive health outcomes and longer-term savings on chronic diseases associated with obesity were key factors in their decision to cover or consider covering in the future along with increasing enrollee access and health equity, recommendations from providers, and ability to negotiate supplemental rebate agreements.

Cost Containment Strategies

States are likely considering various cost containment strategies for these drugs and may even be re-evaluating their broader approach to obesity treatment, including the use of obesity medications along with other treatments such as nutritional counseling or behavioral therapy.

Obesity Treatment Coverage Analysis

The STOP Obesity Alliance partnered with the Obesity Action Coalition to analyze how states are covering the treatment of obesity in their Medicaid programs. The review of Medicaid coverage included the elements of comprehensive obesity care: nutrition counseling (NC), intensive behavioral therapy (IBT), obesity medications (OM), and metabolic and bariatric surgery (MBS). This study is a review of how states’ policies cover the treatment of obesity in Medicaid programs. The review of Medicaid coverage included the elements of comprehensive obesity care: nutrition counseling, intensive behavioral therapy, obesity medications, and metabolic and bariatric surgery. The top Managed Care Organization (MCO) and Fee for Service (FFS) plans for each state’s Medicaid program were reviewed for this study.

Methodology

We contracted with LEVERAGE, a solutions and consulting firm, to extract the state Medicaid coverage data for plan year 2023. For each state, the appropriate source materials and documents necessary to determine coverage and coverage criteria were identified. Medical Necessity Criteria - i.e., BMI levels, specified co-morbid conditions, and definition of surgical complications. The extracted data were explored to determine the level of coverage provided for each treatment category. The detail provided by LEVERAGE allowed us to categorize the data based on whether a benefit was covered or not covered, covered with limitations, and/or covered with restrictions. For purposes of this study, limitations and restrictions describe the barriers to access covered treatments. We defined a limitation to treatment as a criterion that must be met at the patient level, usually a clinical parameter or provider decision to access a treatment.

Read also: Weight Loss Meds & BCBS

Scoring Approach

We developed a novel scoring approach to analyze the level of obesity treatment coverage. Each obesity treatment category was assigned a value according to the level of coverage provided. Each state was then assigned a final value based on the categories assessed and the total score.

Findings

Few states were explicit about NC for obesity treatment unless it was tied to metabolic and bariatric surgery requirements. Few states were explicit about this coverage; therefore, fee schedules were used to interpret coverage where necessary. The medications covered for obesity were reviewed from the state Fee for Service and the top Managed Care Organization Prescription Drug List. The obesity medications (OM) considered were the new generation medications, including Saxenda and Wegovy, and the older generation medications, including Contrave, Qysmia, Phentermine, Benzphetamine, Diethylpropion, and Phendimetrazine. Xenical, Orlistat and Alli are older generation medications that are now available over the counter.

Coverage Definitions

“Covered” - The state will cover medication for the specific purpose of treating obesity (not to treat Type 2 diabetes with obesity as a secondary condition). “Covered” - MBS is covered, and if a BMI value for coverage is available, it follows the American Society for Metabolic and Bariatric Surgery guidelines. Each state was assigned a final value. The final values reflect whether overall obesity treatment in the state was covered, covered with limitations, covered with restrictions, or not covered. The state covers nutrition counseling. The state covers intensive behavioral therapy. Few states were explicit about this coverage. The state will cover obesity medications for the specific purpose of treating obesity (not to treat Type 2 diabetes with obesity as a secondary condition). There are no limitations or restrictions to coverage, and the state offers both new generation (Saxenda and Wegovy) and older generation (Contrave, Qysmia, Phentermine, etc.) medications. The drugs covered for obesity were reviewed from the state fee for service (FFS) and the managed care organization (MCO) Prescription Drug List (PDL) of the MCO with the greatest number of enrollees. There are restrictions on coverage based on age. The patient must achieve a specific amount of weight loss for the medication to be renewed. The state includes coverage for metabolic and bariatric surgery (MBS). There are restrictions on coverage based on age, i.e. only 18-64y is covered, <21y is not covered, or >65y is not covered. The criteria that must be met for a repeat bariatric and metabolic surgery to be approved includes a requirement that the patient (and/or provider) provide proof of compliance with all previously prescribed postoperative nutrition and exercise programs. A patient could be excluded from coverage if there is a history of substance use disorder (SUD) now or in past; some states exclude patients with a SUD within a certain time, i.e.

Factors Influencing Access to Obesity Treatment

Residents struggle with losing weight not only due to a diet of unhealthy foods, but also because of generational genetics, a dearth of grocery stores with healthy foods, and busy schedules with multiple jobs and a lack of child care. And some of the state’s most popular foods are high-fat, high-sugar dishes such as pork shoulder slathered in sugary and smoky barbecue sauce, peach cobbler, fried shrimp and fried green tomatoes. There, 70% of residents are either overweight or obese. Obesity is linked to several comorbidities, such as diabetes and heart failure. That rate rises across demographic groups.

Broader Policy and Legislative Considerations

ACG expects continued interest in GLP-1 medications from both the administration and Congress. To date, HHS leadership have sent mixed signals on the issue. HHS Secretary Robert F. In addition, the United States Preventive Services Task Force (USPSTF) is developing a draft recommendation statement on whether weight-loss interventions affect health outcomes such as cardiovascular disease.

Proposed Federal Rule

In late November, the Biden administration proposed a new rule to require Medicaid and Medicare programs to cover GLP-1s for weight loss. The Biden administration estimates that the change would cost the federal government about $11 billion over the course of 10 years for Medicaid.

Congressional Budget Office (CBO) Analysis

In October 2024, the Congressional Budget Office (CBO) analyzed the impact of the proposed change to cover anti-obesity medications. The CBO also cited challenges in their analysis, including (1) the rapid evolution of real-world clinical data on GLP-1 impact and effectiveness and (2) the difficulty of assessing whether weight-loss alone would reverse the weight-related chronic conditions, as well as any associated cost savings.

Expert Perspectives

Over her three-decade career, weight management physician Dr. Sarah Ro has seen hundreds of patients. “They have a tremendous amount of disease burden,” said Ro, medical director of the University of North Carolina Physicians Network weight management program, which serves patients from marginalized communities at clinics across the state.

“GLP-1s are not the answer for everybody,” Ro told Stateline.

Data and Methodology

Number of Prescriptions and Gross Spending Data

This analysis uses 2019 through 2023 State Drug Utilization Data (SDUD) (downloaded in October 2024). The SDUD is publicly available data provided as part of the Medicaid Drug Rebate Program (MDRP), and provides information on the number of prescriptions, Medicaid spending before rebates, and cost-sharing for rebate-eligible Medicaid outpatient drugs by NDC, quarter, managed care or fee-for-service, and state. It also provides this data summarized for the whole country. The data do not include information on the number of days supplied in each prescription. CMS has suppressed SDUD cells with fewer than 11 prescriptions, citing the Federal Privacy Act and the HIPAA Privacy Rule.

Identifying GLP-1s

GLP-1 agonists included in the analysis were approved for treatment of obesity, Saxenda (liraglutide), Wegovy (semaglutide), Zepbound (tirzepatide) and corresponding formulations that may potentially be used off-label for treatment of obesity, Mounjaro (tirzepatide), Ozempic (semaglutide), Rybelsus (semaglutide), Victoza (liraglutide), mirroring another recent KFF analysis. The SDUD are updated quarterly; a new quarter of data is typically released, and the prior five years of data are also updated.

From Medicaid data publicly available, there is no way yet to disentangle how much of the growing use of GLP-1s is related to treatment for diabetes versus obesity, or a combination of both. In addition, the popularity and increased demand for GLP-1s has led to drug shortages, sometimes causing people to switch products or ration doses or sometimes leaving individuals without access to needed prescriptions.

tags: #medicaid #coverage #for #weight #loss #medication