States Face Unprecedented Budget Pressures
As GLP-1 medications like Wegovy, Ozempic, and Zepbound gain popularity for both diabetes management and weight loss, state Medicaid programs are confronting unexpected financial strain. These revolutionary but expensive drugs are forcing states to make difficult coverage decisions as costs spiral upward at an alarming rate. Pennsylvania alone expects to spend $1.3 billion on these medications in 2025, contributing significantly to projected budget shortfalls.
“It is a medication that’s gotten a lot of hype and a lot of press, and has become very popular in its use and it is wildly expensive,” explains Dr. Val Arkoosh, Pennsylvania’s human services secretary.
Current Coverage Landscape
Medicaid spending on GLP-1 drugs has increased dramatically, jumping from $577.3 million in 2019 to $3.9 billion in 2023, with prescriptions increasing by over 400% during this period. Currently, at least 14 states provide Medicaid coverage for GLP-1 medications for obesity treatment. Each patient costs approximately $12,000 annually for these medications.
Public opinion appears somewhat supportive, with about half of Americans favoring Medicare and Medicaid coverage for weight-loss drugs for people with obesity, according to a recent AP-NORC poll. However, Medicare does not currently cover these medications, and the Trump administration recently halted a proposed rule by the Biden administration that would have expanded coverage.
States Implementing Restrictions
With budgets tightening, states are exploring various approaches to manage costs:
- Eligibility Requirements: Pennsylvania is considering requiring patients to meet specific BMI thresholds or try diet, exercise, and less expensive medications first.
- Program Terminations: West Virginia and North Carolina ended coverage programs for state employees in 2024 due to cost concerns.
- Complete Coverage Elimination: Connecticut is considering scrapping Medicaid coverage for weight loss entirely, instead requiring a Type 2 diabetes diagnosis for coverage starting June 14.
Jeffrey Beckham, Connecticut’s state budget director, notes: “It is very expensive. Other states are coming to that conclusion, as well as some private carriers.”
Potential Benefits Despite Costs
Advocates for coverage point to significant health improvements that could offset long-term costs. Tracy Zvenyach of Obesity Action emphasizes that patients who lose weight with these drugs may ultimately become healthier and less expensive to cover over time.
Obesity affects approximately 40% of U.S. adults according to the CDC and can lead to serious conditions like hypertension, Type 2 diabetes, and high cholesterol, increasing risks for strokes and heart attacks.
Patient Experiences
Dr. Adam Raphael Rom, a physician at Greater Philadelphia Health Action, has witnessed remarkable results among his Medicaid patients using GLP-1s for weight loss: “I had one patient tell me that it’s like, changed her relationship to food. I’ve had patients lose like 20, 40, 60 pounds.”
Patient testimonials highlight the life-changing impact of these medications:
Sarah Makowicki, a 42-year-old graduate student who combined GLP-1 drugs with weight-loss surgery, lost over 200 pounds: “I am a different person from what I was five years ago. Not only in my physical space, but also mentally.”
Sara Lamontagne experienced significant weight regain when her coverage was interrupted, going from 260 pounds to over 300 pounds—heavier than she had ever been. “It’s a horrible game to be played, to be going back and forth,” she explains.
Uncertainties and Future Considerations
Several unknowns complicate decision-making around coverage. Obesity experts note that as many as 1 in 5 people may not achieve the dramatic weight loss results seen in others. Additionally, the long-term treatment requirements remain unclear.
“Someone may have to be on treatment over the course of their lifetime,” Zvenyach acknowledges, “but we don’t know exactly what that regimen would look like.”
These decisions are particularly challenging as Medicaid budgets face additional pressures, including congressional Republicans considering cuts of up to $880 billion from Medicaid over the next decade.
Finding Balance
As states navigate these difficult financial waters, they’re attempting to balance patient needs with fiscal responsibility. Some, like Connecticut, are exploring alternatives such as covering less expensive FDA-approved oral medications for weight loss and providing nutrition counseling.
The ongoing debate reflects the complex intersection of healthcare innovation, patient access, and fiscal sustainability within public health insurance programs. As these medications continue to transform treatment possibilities for obesity and diabetes, policymakers face the challenge of making them accessible while preventing budgetary collapse.
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