More than 40% of American adults are obese, costing the health care system $173 billion a year. Related conditions, including heart disease, stroke, type 2 diabetes and some cancers, are among the leading causes of preventable death in the U.S. While drugmakers have developed effective medications for weight loss, they’re not covered by Medicare.
Should the government help foot the bill?
When Medicare’s prescription-drug program was created two decades ago, it was prohibited by law from covering weight-loss drugs, which were seen as largely cosmetic. Congress also worried about health risks after several popular diet pills were taken off the market. The obesity narrative has shifted in recent years to reduce stigma, and newer drugs appear to be safer. The American Medical Association recognized obesity as a disease in 2013.
One result is that pressure is now mounting on Congress to allow Medicare to cover weight-loss drugs, such as Novo Nordisk A/S’s Wegovy. Even at $900 or more a month out of pocket, demand has been surging.
That high price has become a sticking point for insurers. Weight-loss drugs are lifelong medications. And even as more competitors enter the market, manufacturers have little incentive to reduce prices. A typical employer’s drug spending could rise by more than 50% if just half of eligible employees took Wegovy, according to one estimate. For Medicare, covering semaglutide for every eligible beneficiary could cost $268 billion a year, surpassing total excess health care spending associated with obesity for people of all ages.
The potential for wider savings remains unclear. It’s possible that private insurers and employers will bear the brunt of costs — thereby raising premiums — while Medicare ultimately benefits from lower spending on other obesity-related conditions. A second challenge is the lack of research on long-term health effects, particularly for older adults.
Further study is clearly needed, but given the scale of potential health benefits, some coverage is a good idea. Unlike the diet pills of previous decades, the latest class of drugs mimic the body’s natural hormonal response to suppress appetite and have been safely used for years to treat diabetes. Lower prices, meanwhile, may not be far off.
A prudent first step, then, would be offering coverage to a subset of Medicare beneficiaries — for example, adopting qualifications similar to those for bariatric surgery and in line with other countries such as the U.K., including a body-mass index above 35 and one or more obesity-related conditions. President Joe Biden’s administration also has the authority, under two programs, to test out new payment and treatment models for the Medicare population before committing to wider coverage.
