U.S. to Test Medicare, Medicaid Coverage for Obesity Drugs in Major Healthcare Shift
The U.S. is set to pilot Medicare and Medicaid coverage for obesity drugs, marking a major shift in chronic disease policy and expanding the role of preventive care. (Source: Sourcingcares)
Pilot Program Could Redefine Obesity Care Access
The United States government is preparing a five-year pilot program that could allow Medicare and Medicaid to cover high-cost, high-impact weight-loss drugs—marking a historic shift in federal healthcare policy. According to The Washington Post, internal documents from the Centers for Medicare and Medicaid Services (CMS) show plans to include Novo Nordisk’s Wegovy and Ozempic, along with Eli Lilly’s Zepbound and Mounjaro, in coverage.
These GLP-1 receptor agonists, which have demonstrated body weight reduction of 15% to 20% in clinical trials, are already widely used in the private sector. Their inclusion in public insurance could drastically expand access to obesity treatments for over 135 million Americans.
From Rejection to Reconsideration: A Policy Reversal
The proposed pilot comes after an earlier rejection of a Biden-era proposal to expand coverage for anti-obesity medications. If implemented, it would represent a dramatic policy reversal under the Trump administration’s CMS, which had previously emphasized cost containment over innovation in obesity care.
Medicaid’s pilot is expected to begin in April 2026, followed by Medicare in January 2027—offering potential national coverage for drugs that are currently off-limits for weight-loss use under Medicare regulations.
Balancing Cost and Public Health Impact
The annual cost of GLP-1-based weight-loss medications ranges from $5,000 to $7,000 per patient, raising budgetary concerns. While critics question the long-term financial burden on public insurance systems, advocates argue that improved obesity management could lower overall healthcare spending by preventing complications like diabetes, cardiovascular disease, and sleep apnea.
A growing body of clinical evidence supports the broader benefits of these medications, positioning them as preventive treatments rather than cosmetic solutions.
Market Reactions Signal Confidence in Pharma Sector
The pharmaceutical sector responded positively to the news. Shares of Eli Lilly rose more than 2%, and Novo Nordisk’s U.S.-listed shares gained 1.2%. Analysts predict significant upside for Eli Lilly, particularly with its experimental oral obesity drug, which is expected to be included in the pilot if approved.
Meanwhile, companies offering lower-cost compounded alternatives, such as Hims & Hers Health, saw declines amid fears that public insurance coverage of branded drugs would reduce demand for their offerings.
Potential Long-Term Shift in U.S. Healthcare Strategy
If successful, the pilot program could permanently transform how the U.S. healthcare system addresses obesity, a condition affecting over 40% of American adults. Currently, only 13 states provide limited Medicaid coverage for these drugs, and Medicare bans coverage for medications used solely for weight loss.
With over 70 million people enrolled in Medicaid and 65 million in Medicare, the shift could accelerate mainstream acceptance of obesity care as a critical public health investment, not merely an individual lifestyle issue.
While CMS has declined to comment on the pilot’s status, momentum is building. Industry players and policymakers alike are closely watching the outcome, recognizing that this may be a defining moment for the future of chronic disease management in the United States.
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