The Biden administration has proposed to permit Medicare and require Medicaid to cowl medication used to deal with weight problems by reinterpreting the statutory language that at the moment prohibits protection of medicine used for weight reduction below Medicare and permits however doesn’t require states to cowl these medication for weight reduction below Medicaid. This reinterpretation displays an evolution within the understanding of weight problems as a illness and weight reduction as conferring actual well being advantages in folks with weight problems reasonably than being merely for beauty functions. It additionally comes amidst excessive and rising demand for and use of a comparatively new class of extremely efficient, but additionally very costly, medication getting used to deal with weight problems, generally known as GLP-1s.
Beneath present legislation, folks on Medicare can get anti-obesity medication lined by Part D, Medicare’s outpatient drug profit, provided that they’re used for a medically accepted FDA-approved indication apart from weight problems, like diabetes or heart problems threat discount. State Medicaid applications additionally must cowl these medication for indications equivalent to diabetes or heart problems threat discount, however solely 13 states at the moment cowl these medication for weight problems therapy as nicely. These limitations on protection in Medicare and Medicaid imply that tens of millions of people that have weight problems and may profit from these medication could also be unable to entry them attributable to their excessive costs. However even with these protection limits in place, gross spending on these medication for authorised makes use of in Medicare and Medicaid has skyrocketed lately, totaling $4 billion in Medicaid in 2023 and near $6 billion in Medicare in 2022 for chosen GLP-1s.
The brand new Biden administration proposal would authorize Medicare and Medicaid protection of anti-obesity medicines for folks with weight problems however not people who find themselves obese. Whereas protection can be out there for Medicare and Medicaid enrollees with weight problems, Medicare Half D drug plans and state Medicaid applications may nonetheless apply utilization administration instruments equivalent to prior authorization, which may restrict entry. In keeping with the Facilities for Medicare & Medicaid Providers, the proposal would improve Medicare spending by $25 billion and Medicaid spending by $15 billion over 10 years (web of rebates) and would apply to round 3.4 million folks with Medicare and 4 million folks with Medicaid. As a result of Medicaid is collectively financed by the states and the federal authorities, CMS estimates the federal authorities would pay $11 billion and states would pay practically $4 billion.
Rising prescription drug prices are an ongoing concern for states, and state Medicaid applications reported the excessive price of weight problems medication as key motive for not increasing protection prior this proposal. The potential price to Medicare is decrease than some other estimates as a result of it assumes many individuals with weight problems can already get Medicare protection of those medication for different medically accepted indications, and CMS’s proposal wouldn’t apply to people who find themselves obese. Nonetheless, the mix of excessive demand, new makes use of, and excessive costs for these therapies is more likely to place large strain on Medicare spending, Half D plan prices, and premiums for Half D protection over time.
KFF evaluation has discovered most large employer firms at the moment don’t cowl GLP-1 medication for weight reduction and protection in ACA Marketplace plans stays restricted, but when finalized, the proposed change to Medicare and Medicaid protection may put strain on different payers to develop entry. If it turns into official protection coverage, this alteration would additionally raise the burden off lawmakers in Congress who’ve repeatedly launched legislation to authorize Medicare protection of anti-obesity medication however who might have been stymied by the potential price of doing so. However because the Biden administration prepares handy the reins over to the incoming Trump administration, a key query is whether or not the rule will probably be finalized as proposed below new management at CMS, modified in a roundabout way, or pulled again altogether.
