While Medicare doesn’t currently cover anti-obesity drugs, a new report from the Congressional Budget Office estimates that coverage could cost Medicare $35 billion from 2026 to 2034.
The office estimates that the annual costs would jump from $1.6 billion in 2026 to $7.1 billion in 2034. Conversely, potential health savings would be less than $50 million in 2026, rising to $1 billion by 2034. Medicare only covers the current GLP-1 drugs for diabetes and overweight or obese patients at high risk of cardiovascular events, although bills have been floated to change that.
The CBO analysis publicized Tuesday found that per patient, anti-obesity medications would cost the federal government $5,600 in 2026 and save it $50. By 2024, the costs could fall to $4,300, but the savings would only rise to $650.
The discrepancy between the costs and the potential health savings runs contrary to a core argument made on behalf of the pharmaceutical manufacturers, patients and some lawmakers: that obesity being associated with myriad other more debilitating health conditions should be cause for widening access to effective treatments.
But the congressional researchers found that, while health spending on Medicare with beneficiaries exceeds spending for those without, the amount spent is significantly higher for patients with severe obesity. Only 4% of Medicare beneficiaries have a BMI of 40 or higher, the bar for the most severe group.
Report authors also cautioned against comparing the relationship between spending and BMI at a certain time point, saying that losing weight does not inherently imply a reduction in spending. The CBO cautioned that there isn’t certainty that weight is the sole driver of the increase in spending, and there’s no guarantee that all the health-related issues linked to obesity are remedied by medication.
“Ascertaining the direct effects of weight loss on spending for health care services requires a different type of analysis,” the report added.
Lawmakers, led by Rep. Brad Wenstrup (R-OH), have tinkered with legislation that would require Medicare to cover more of these medications. The most recent version of the Treat and Reduce Obesity Act would cover treatment for people who had already been prescribed anti-obesity medication by a health plan for at least a year prior to joining Medicare. There hasn’t been any action on the legislation since it was voted out of committee in late June.
The new findings from the CBO place more specific estimates on previous conclusions that widening coverage, at the drugs’ current prices, would cost the government more than it would save. But the CBO previously acknowledged that the drugs’ prices are in flux, given semaglutide’s likely inclusion in future Medicare negotiations and generic entries within the next decade.