Boxes of the diabetes drug Ozempic lie on the counter of a Los Angeles pharmacy. Drugs like Ozempic have gained popularity for treating obesity, prompting more than a dozen states to pay for them. But with severe budget pressures, several state Medicaid agencies are either suspending coverage altogether or limiting access to the therapy. (Photo: Mario Tama/Getty Images)
Some states are reconsidering the operate of GLP-1 weight loss drugs as they tighten budgets and prepare Medicaid programs for cuts in President Donald Trump’s sweeping tax and spending law.
From October 1 16 state Medicaid programs in the GLP-1 study for obesity treatment, up from 13 last year, according to a survey of Medicaid directors conducted by KFF, a health policy research group. However, some states have announced that they will discontinue coverage or limit the number of people who can qualify for it.
Many doctors and patient advocates say these drugs will save money in the long run by reducing the risk of obesity-related diseases such as heart disease and diabetes. But many states said they simply couldn’t afford them.
Medicaid in North Carolina ended GLP-1 coverage fight against obesity last month, citing a lack of state funding. California, New Hampshire and South Carolina have said they will end protections on January 1. Starting next year, Michigan Medicaid will limit coverage to people who are “morbidly obese.” Pennsylvania, Rhode Island and Wisconsin are also considering fresh restrictions.
According to Elizabeth Williams, a senior policy manager at KFF who focuses on Medicaid, in a KFF survey last year, about half of states said they were interested in using GLP-1 for weight loss. This year, most states are moving in the opposite direction.
This likely reflects recent state budget challenges and significant, significant insurance costs.
– Elizabeth Williams, KFF senior policy manager
“This likely reflects recent state budget challenges and the significant, significant costs associated with insurance,” Williams said. “After many years of strong revenue growth in the immediate aftermath of the pandemic, states are beginning to see slowing revenues, rising spending demands and significant fiscal uncertainty, in part due to recent federal actions.”
In April, the Trump administration scrapped a Biden-era proposal that would require state Medicaid programs to pay for some GLP-1 treatments for obesity. Earlier this month, Trump announced that his administration has reached agreements with makers Wegovy and Zepbound to lower drug prices for Medicaid, Medicare and consumers buying drugs directly, but it is unclear whether the agreements will reduce costs for states.
Health plans for state employees are also reevaluating their coverage of obesity medications. For example, North Carolina last year ended coverage of GLP-1 obesity care for state employees, and West Virginia canceled a 1,000-person pilot program.
GLP-1 drugs, which balance blood sugar levels, have long been prescribed to patients with type 2 diabetes and cardiovascular disease. All state Medicaid programs, which are funded jointly by states and the federal government, include GLP-1 for these uses.
But these drugs also reduce hunger signals and can support people lose significant weight. Drugs like Ozempic, Wegovy, and Zepbound have become extremely popular for this purpose.
Between 2019 and 2023, the number of Medicaid outpatient prescriptions for selected GLP-1 drugs used to treat diabetes and obesity increased from 755,300 to 3.8 million, according to KFF. During the same period, Medicaid spending on these drugs increased from $597.3 million to $3.9 billion.
AND study published last year The British Medical Association’s journal The BMJ found that the number of non-diabetic patients initiating GLP-1 treatment in the United States increased from approximately 21,000 in 2019 to 174,000 in 2023, an escalate of more than 700%.
More than 2 in 5 American adults According to the federal Centers for Disease Control and Prevention, he is obese. The CDC defines obesity as a body mass index – a calculated measure of body weight in relation to height – of 30 or more. According to the agency, obesity costs the U.S. health care system nearly $173 billion annually.
Recently, manufacturers of some GLP-1 they lowered their pricesselling them directly to consumers for $500 or less per month. However, many patients cannot afford to pay this much out of pocket.
Countries in financial difficulty
In North Carolina, Dr. Jennifer McCauley, a weight management physician at UNC Health, said GLP-1 coverage through Medicaid has been “extremely helpful for our patients.”
“Now they’ve stopped using the program, so these people are now coming back, gaining some of the weight back because they can’t afford these medications and they’re also suffering from obesity,” McCauley told Stateline.
Some critics of GLP-1’s broad coverage argue that this is not the case profitablebecause many patients regain the lost weight after stopping treatment. But McCauley said the “downstream impacts of obesity are even greater.”
“There are definitely vulnerable populations who probably wouldn’t be able to achieve weight loss without these medications.”
James Werner, a spokesman for the North Carolina Department of Health and Human Services, blamed the change in coverage on the fact that the state Legislature did not provide enough funding for Medicaid.
In an email to Stateline, Werner said that coverage of GLP1 for weight loss “will be reconsidered if Medicaid is fully funded.”
Some states are trying to maintain at least some coverage of high-cost drugs by tightening prescription eligibility criteria, according to Colleen Becker, project manager at the National Conference of State Legislatures, a policy research group.
“States are really looking at how to balance access and provide it to patients, but they are the ones managing their budgets and they need to manage it well,” Becker said.
Michigan and Pennsylvania are among the states considering such options. Meanwhile, Connecticut has decided to maintain its offer of weight-loss drugs to state employees but require beneficiaries to try online weight-loss advice before they can get a prescription.
Some future possibilities
One state, North Dakota, took a different approach to GLP-1 coverage after introducing legislation that would require the state to do so Medicaid a program to cover the drug failed. Instead, this year North Dakota became the first state to require insurers covered by the state’s Affordable Care Act marketplace to cover weight-loss drugs.
North Dakota Deputy Insurance Commissioner John Arnold said the insurance department calculated that the mandate would not result in a significant escalate in insurance premiums.
“It’s not like anyone can walk into a doctor’s office and say, ‘Hey, I want this taken care of,’” Arnold said. “These drugs are actually intended for people who have a medical need for the drugs, then they will be covered by insurance.”
According to North Dakota House Speaker Robin Weisz, the insurance department had to ask the Legislature for permission to make the change. He said insurers fear it will be “open season for anyone who can lose 20 to 30 pounds.”
He said it will take some time to see if the policy raises insurance premiums.
“If carriers come back in a few years and say, ‘Wow, this is how much we spent on this… we’ll take a close look at it,'” Weisz said. “But it’s definitely too early to tell at this stage.”
Arnold says other states may have the flexibility to consider having ACA insurers cover drug costs.
“Our biggest concern was to reduce the number of comorbidities and their long-term impact on the overall cost of insurance, because more comorbidities mean more claims,” Arnold said, referring to obesity-related diseases and conditions.
Stateline reporter Shalina Chatlani can be reached at: schatlani@stateline.org.
This story was originally produced by state linewhich is part of States Newsroom, a nonprofit news network that includes the Ohio Capital Journal and is supported by grants and a coalition of donors as a 501c(3) public charity.
