The Biden administration is proposing to cover drugs like Ozempic, which is used to treat heart disease, diabetes and obesity, under Medicare and Medicaid. (Photo illustration by Mario Tama/Getty Images)

WASHINGTON — The Biden administration announced Tuesday it’s reinterpreting federal law to allow Medicare and Medicaid patients access to anti-obesity medications to reduce their weight over the long term.

The Centers for Medicare and Medicaid’s proposed rule, which the Trump administration would need to finalize before it would take effect, is expected to cost $25 billion for Medicare combined with $11 billion in federal spending and $3.8 billion in state spending for Medicaid coverage throughout the next decade. 

CMS is encouraging states to submit comments to the proposed rule explaining when they could implement the Medicaid provision, since that health care program includes cost sharing between federal and state governments.

Medicare is the federal health insurance program for people 65 and older and some younger people with certain disabilities or conditions. Medicaid provides health care to some low-income individuals.

“People with obesity deserve to have affordable access to medical treatment and support, including anti-obesity medications for this disease; just as a person with type two diabetes can access these medications to get healthy,” CMS Administrator Chiquita Brooks-LaSure said on a call with reporters. “That’s why we’re proposing to revise our interpretation of the law and provide coverage of anti-obesity medications for the treatment of obesity.”

Brooks-LaSure said CMS was reinterpreting the law to view obesity as a chronic condition, which the agency believes provides a pathway for Medicare and Medicaid to cover anti-obesity medications.

“The medical community today agrees that obesity is a chronic disease,” Brooks-LaSure said. “It is a serious condition that increases the risk of premature death and can lead to other serious health issues, such as heart disease, stroke and diabetes.”

More than 40% of Americans have obesity and CMS data shows 22% of Medicare recipients were diagnosed with obesity during 2022, double the number from 10 years ago, she said.

CMS wrote in a fact sheet about the proposed rule that since creation of the Medicare Part D program, which provides prescription drug coverage, the agency has “interpreted the statutory exclusion of ‘agents when used for weight loss’ to mean that a drug, when used for weight loss, is excluded from the definition of a covered Part D drug.”

Trump and RFK Jr.

President-elect Donald Trump hadn’t commented on the proposal as of late Tuesday morning, but his planned nominee for Health and Human Services secretary, Robert F. Kennedy Jr., has repeatedly criticized newer weight loss drugs like Ozempic.

Kennedy was skeptical of studies showing the benefits of weight loss drugs during an appearance on Fox News last month, arguing the federal government would spend less money if it provided healthy meals to all Americans instead of coverage for weight loss drugs. 

“If we spent about one-fifth of that giving good food, three meals a day, to every man, woman and child in our country, we could solve the obesity and diabetes epidemic overnight,” Kennedy said.

CMS expects that about 3.4 million people in the Medicare program would become eligible for anti-obesity medication coverage under the proposed rule that would take effect in 2026 if Trump decides to finalize it.

Dan Tsai, CMS deputy administrator and director for the Center for Medicaid and CHIP Services, said during the call the agency hopes states submit comments in the weeks and months ahead detailing “when states would be required to implement this provision.”

“We note in the rule that the rule reinterprets the Medicaid statute, which means this would govern all Medicaid programs,” Tsai said. “But we specifically invite comment on a range of implications and timing for states.”

Cost differs in CBO report

The total cost of the program during the next decade that CMS provided on the call for Medicare was somewhat different from a cost estimate the Congressional Budget Office released last month. CBO is a government agency that provides nonpartisan budget information to Congress.

CBO projected it would cost the federal government $35 billion between 2026 and 2034 to cover anti-obesity medications for Medicare patients.

“Relative to the direct costs of the medications, total savings from beneficiaries’ improved health would be small—less than $50 million in 2026 and rising to $1.0 billion in 2034,” CBO wrote in the analysis.

The report explained that Medicare currently covers “some obesity-related services, including screening, behavioral counseling, and bariatric surgery (a procedure performed on the stomach or intestines to induce weight loss).”

While Medicare does cover anti-obesity medications for recipients with diabetes or cardiovascular disease, CBO wrote, Medicare “is prohibited by law from covering medications for weight management as part of the standard prescription drug benefit.”

The CBO report didn’t include a cost estimate for Medicaid, but noted that weight management drug coverage within that program is optional.

“According to one study, of the 47 states with publicly available lists of preferred drugs, nine had Medicaid programs that covered Wegovy in the first quarter of 2023.”

The National Governors Association and National Conference of State Legislatures both declined to comment on the proposed rule and its effect on state Medicaid programs.