Biden Proposes Medicare, Medicaid Coverage for Anti-Obesity Drugs

Budget effects hard to forecast, CBO says

November 26, 2024

The Biden administration announced a new proposal today to expand coverage of anti-obesity medications for millions of Americans on Medicare and Medicaid.

If approved, the proposal would go into effect for 2026.

“This proposal would allow Americans and their doctors to determine the best path forward so they can lead healthier lives, without worrying about their ability to cover these drugs out-of-pocket, and ultimately reduce health care costs to our nation,” the announcement noted.

Here’s what you need to know:

• By the numbers:  The administration estimates the new proposal would expand access to about 3.4 million Medicare beneficiaries and about 4 million adult Medicaid enrollees. 
• Current rule:  Some Medicare beneficiaries already have access to anti-obesity medications related to type 2 diabetes and certain cardiovascular conditions. The proposal would reinterpret the law to allow coverage for obesity, as well.
  • States can authorize coverage for these drugs through Medicaid, but they are not among the commonly covered drugs.
• Process:  The proposal must advance through a public comment period and review. It also faces political uncertainty with a transition in leadership within federal health agencies.
• Cost considerations:  A report last month from the Congressional Budget Office (CBO) indicated fully expanding coverage for these drugs through Medicare would increase federal spending by about $35 billion from 2026 to 2034.
• Quotable:  “The budgetary effects of authorizing (anti-obesity medications) coverage in Medicare are highly uncertain,” the CBO report noted. “Estimates of costs and take-up rates are sensitive to the rapidly evolving evidence on the eligibility, use, price, and clinical benefits associated with those medications.”

A fact sheet and the proposal are available to review online.