Several U.S. states are reevaluating their coverage of GLP-1 medications used for weight loss due to tightening budgets and anticipated cuts in Medicaid funding. As of October 1, 2023, a total of 16 state Medicaid programs provided coverage for GLP-1s aimed at treating obesity, an increase from 13 the previous year, according to a survey conducted by KFF, a health policy research organization. Despite this growth, states such as North Carolina, California, New Hampshire, and South Carolina have announced plans to either discontinue coverage or impose stricter eligibility requirements beginning January 1, 2024.
Healthcare professionals and patient advocates argue that GLP-1 medications can lead to long-term savings by reducing the incidence of obesity-related diseases, such as heart disease and diabetes. Nevertheless, the financial burden of these drugs has led many states to conclude that they cannot sustain the costs associated with them. North Carolina Medicaid recently ended its coverage of GLP-1s for obesity, citing a lack of state funding.
Officials in California, New Hampshire, and South Carolina have indicated they will follow suit, while Michigan plans to limit coverage to individuals classified as “morbidly obese.” Other states, including Pennsylvania, Rhode Island, and Wisconsin, are also contemplating new restrictions on GLP-1 coverage.
According to Elizabeth Williams, a senior policy manager at KFF, the shift away from GLP-1 coverage among many states reflects significant budgetary challenges and increasing financial pressures. She noted, “After a number of years of robust revenue growth right after the pandemic, states are starting to see slowing revenues, increasing spending demands, and a lot of fiscal uncertainty due in part to recent federal actions.”
In April 2023, the Trump administration rescinded a proposal from the Biden administration that would have mandated state Medicaid programs to cover certain GLP-1 medications for obesity treatment. Earlier this month, President Trump announced agreements with manufacturers of GLP-1 drugs such as Wegovy and Zepbound to reduce prices for Medicaid, Medicare, and consumers. However, it remains unclear whether these agreements will ease the financial burden on state Medicaid programs.
The reassessment of GLP-1 coverage is not limited to Medicaid. Health plans for state employees are also evaluating their policies. North Carolina, for instance, ended GLP-1 coverage for state workers last year. West Virginia has canceled a 1,000-person pilot program aimed at testing the effectiveness of these medications.
GLP-1 medications, which are primarily prescribed to manage blood sugar levels in patients with Type 2 diabetes, are now increasingly recognized for their ability to suppress hunger signals and facilitate substantial weight loss. Popular medications like Ozempic, Wegovy, and Zepbound have seen a dramatic rise in prescriptions. Between 2019 and 2023, the number of outpatient Medicaid prescriptions for select GLP-1s surged from 755,300 to 3.8 million, resulting in a substantial increase in Medicaid spending from $597.3 million to $3.9 billion during the same period.
A study published in The BMJ highlighted the growing uptake of GLP-1 treatment among patients without diabetes, which rose from approximately 21,000 in 2019 to 174,000 in 2023—an increase of more than 700%. Currently, over two in five adults in the United States are classified as obese, according to the Centers for Disease Control and Prevention (CDC), which defines obesity as having a body mass index (BMI) of 30 or higher. The CDC estimates that obesity costs the U.S. healthcare system nearly $173 billion annually.
While some manufacturers have recently lowered the prices of GLP-1 medications to $500 or less per month for direct consumers, this remains unaffordable for many patients without insurance coverage. Dr. Jennifer McCauley, a weight management physician at UNC Health in North Carolina, expressed concern over the lack of Medicaid coverage for GLP-1s. “Now they’ve stopped coverage, so those people are now going back, regaining some of the weight, because they’re unable to obtain these medications, and also are suffering the health consequences of obesity,” McCauley stated.
Critics of widespread GLP-1 coverage argue that it may not be cost-effective, as many patients tend to regain weight after discontinuing treatment. In contrast, McCauley emphasized the “downstream effects of obesity are even higher,” highlighting that vulnerable populations may not have access to weight loss solutions without these drugs.
James Werner, a spokesperson for the North Carolina Department of Health and Human Services, attributed the change in coverage to insufficient state budget allocations for Medicaid. He indicated that GLP-1 coverage for weight loss “would be reconsidered if Medicaid is fully funded.”
To manage the expensive drugs, some states are tightening eligibility requirements for prescriptions. Colleen Becker, a project manager at the National Conference of State Legislatures, noted that states are striving to balance patient access with fiscal responsibility. Michigan and Pennsylvania are among those considering such measures.
Connecticut has opted to maintain coverage for weight-loss drugs for state employees but requires beneficiaries to attempt online weight-loss counseling prior to obtaining a prescription. In a different approach, North Dakota became the first state to require insurers on its Affordable Care Act marketplace to cover GLP-1 medications for weight loss after legislation mandating coverage for Medicaid failed. Deputy Insurance Commissioner John Arnold stated that the mandate would not significantly impact insurance premiums, as it targets individuals with a medical need for the drugs.
North Dakota House Speaker Robin Weisz expressed caution regarding the long-term effects of this policy, suggesting it may take time to evaluate its impact on insurance costs. Arnold added that other states might explore similar mandates for ACA insurers to cover GLP-1 medications, emphasizing the importance of addressing obesity-related comorbidities in controlling overall healthcare costs.
