The U.S. federal government will start a five-year pilot program covering costly GLP-1 drugs through Medicare and Medicaid. Overall, the move marks a significant development in the country’s policy reforms for obesity treatment.
Medicare &, Medicaid to Cover GLP-1s
Starting in April 2026, state Medicaid programs may opt into coverage for drugs like Wegovy, Ozempic, Zepbound, and Mounjaro. Meanwhile, Medicare Part D plans can join the pilot beginning in January 2027. Correspondingly, the Centers for Medicare and Medicaid Services (CMS) will oversee the rollout.
Currently, Medicare covers these drugs only for diabetes or cardiovascular conditions—not for obesity alone. Moreover, just 13 states offer Medicaid coverage for obesity treatment with GLP-1s. In time, this program would expand access nationwide.
Costs Remain a Concern
Overall, GLP-1 medications cost between $5,000 and $7,000 per year, depending on brand and dosage. Therefore, Medicare coverage alone could cost $35 billion between 2026 and 2034, according to estimates cited by Reuters.
“In the aggregate, this is terrifying,” reacted David Rind, chief medical officer for the Institute for Clinical and Economic Review, speaking to Washington Post. “I just don’t know how our nation is going to pay for this.”
Consequently, private insurers have recently pulled back on coverage due to high costs. As a result, Medicaid and Medicare patients have faced limited access compared to those with employer-sponsored plans.
Medicare & Medicaid Program Structure
In particular, the pilot will include counseling and clinical oversight along with the drug regimen. According to CMS, this model aims to treat obesity more holistically—not just medicate it.
Notably, the program is voluntary, which means that states and Medicare Part D insurers can choose to participate. While this flexibility may limit early adoption, it nevertheless reduces upfront federal spending.
Equity and Health Outcomes
This Medicare & Medicaid coverage of GLP-1s could improve access for marginalized groups. Specifically, publicly insured patients, especially Black and Latino communities, have had significantly lower access to GLP-1s.
Overall, these medications have shown strong results. In fact, patients can lose up to 20% of body weight after regular use, according to clinical trials by Novo Nordisk and Eli Lilly.
“We believe that comprehensive coverage through government and commercial insurance plans is critical to affordable health care and treatment options,” remarked a spokesperson for Novo Nordisk.
Political Reversal
Earlier this year, the Trump administration withdrew a Biden-era proposal that would have expanded Medicare coverage for GLP-1s. Hence, the new pilot represents a sharp reversal. Moreover, it also signals increased recognition of obesity as a chronic disease, not merely a lifestyle issue.
Meanwhile, the administration has not said whether full-scale coverage will follow the pilot. Even so, stakeholders see this as a significant step.
Reactions to Medicare & Medicaid Coverage
Generally, pharmaceutical companies have welcomed the announcement. Shares of Eli Lilly and Novo Nordisk rose 3% and 2%, respectively, following the news.
Clearly, broader access through Medicare and Medicaid could boost prescription volumes nationwide.
What’s Next?
Soon, the CMS Innovation Center will begin accepting applications from state Medicaid programs next year. Next, Medicare plans will follow six months later.
Ultimately, this pilot could reshape obesity care for over 150 million publicly insured Americans.
Photo by David Trinks on Unsplash
