State Medicaid programs have historically not covered the new class of weight loss drugs for obesity, but recent data suggests that this may soon change. A new report from the Kaiser Family Foundation (KFF) indicates that half of the state Medicaid programs that currently do not cover these drugs are considering adding coverage in the near future.
While all state Medicaid programs cover GLP-1 agonists for type 2 diabetes, coverage for these drugs for obesity is less common. Currently, only 13 state Medicaid programs cover GLP-1s for obesity, with cost being a major barrier for most states that do not currently provide coverage.
According to Liz Williams, a senior policy analyst at KFF, there is growing interest among state Medicaid programs to cover obesity drugs. The report, which surveyed 49 state Medicaid programs and Washington, D.C., highlights an increase in spending on GLP-1 drugs in these programs starting in 2021.
The potential expansion of coverage under Medicaid comes at a time when private plans are tightening their coverage of these medications for obesity, and Medicare currently does not cover them for that indication. The report notes that net Medicaid spending on prescription drugs has increased significantly in recent years, with high-cost specialty drugs like GLP-1s contributing to this growth.
Among the states that currently cover GLP-1s for obesity, most cover all three approved drugs for that indication: Saxenda, Wegovy, and Zepbound. Some states have plans to expand coverage for obesity in the near future, while others only cover older drugs that are not GLP-1s.
The main challenge for state Medicaid officials considering adding coverage for obesity drugs is the high cost of these medications, which can exceed $900 per month. Some states require legislative approval to add coverage and would need to develop clinical criteria for prescribing these drugs.
Despite the costs, officials are also considering the potential cost savings in the long term if members who use these medications are able to avoid developing other health conditions. The report indicates that positive health outcomes are a factor in many states’ coverage decisions.
Many states that currently cover GLP-1s for obesity under Medicaid have specific criteria that patients must meet, such as body mass index requirements and progress toward weight loss goals. States are also navigating budget challenges, with over half of the states surveyed anticipating a Medicaid budget shortfall in the coming year due to declining enrollment and rising costs per enrollee.
Overall, the report highlights the evolving landscape of Medicaid coverage for obesity drugs and the complex financial considerations that state Medicaid programs face as they navigate the changing healthcare landscape. State Medicaid spending is expected to increase by 7% in fiscal year 2025, according to Medicaid officials who spoke to KFF. This increase comes at a time when national enrollment in Medicaid is projected to fall by about 4%. The shift in spending is a result of various factors, including changes in tax revenue and increased scrutiny on Medicaid investments by policymakers.
MaryBeth McEvoy, a Medicaid expert, highlighted the challenges that Medicaid programs are facing in the current landscape. She pointed out that the decrease in tax revenue has put pressure on Medicaid budgets, forcing programs to reevaluate their spending priorities. Additionally, policymakers are likely to be more cautious when allocating funds to Medicaid, which could impact the ability of programs to expand their services, cover individuals at higher income levels, or pursue innovative projects.
The implications of these changes are significant for Medicaid beneficiaries and providers alike. As state spending increases and enrollment declines, there may be a strain on resources and services provided through the Medicaid program. It is crucial for policymakers to carefully consider the impact of these shifts on the overall effectiveness and accessibility of Medicaid for those who rely on it for their healthcare needs.
In conclusion, the projected increase in state Medicaid spending and the decline in national enrollment present challenges for Medicaid programs across the country. It is essential for policymakers to address these issues and ensure that Medicaid remains a sustainable and effective healthcare option for those in need.
