The rapid rise in the use of GLP-1 receptor agonists, including popular medications such as Ozempic, Wegovy, Mounjaro, and Zepbound, has intensified a growing debate over the government’s role in subsidizing access to these life-changing treatments. Initially developed for Type 2 diabetes, these drugs have been proven highly effective in treating obesity, a condition that now affects over 40% of adults in the United States. However, with prices often exceeding $1,000 per month, many Americans, particularly those without comprehensive insurance, face barriers to accessing these treatments.
Currently, Medicare limits coverage of GLP-1s to individuals diagnosed with Type 2 diabetes or specific heart conditions, excluding prescriptions for obesity treatment. In contrast, Medicaid coverage for these medications varies significantly from state to state. While all state Medicaid programs provide coverage for GLP-1s prescribed for Type 2 diabetes, only 36 states offer coverage for those specifically approved for weight management, such as Wegovy, Zepbound, and Saxenda.
A recent study conducted by Real Chemistry sheds light on the growing financial burden of GLP-1 treatments under Medicaid. Using the company’s IRIS market intelligence platform, which aggregates data from over 300 million U.S. patients, the study analyzes the significant variations in coverage and costs across states, as well as the overall impact on Medicaid spending.
Explosive Growth in Medicaid Spending
Medicaid spending on GLP-1 medications has surged over the past five years. In January 2020, spending on Ozempic, a GLP-1 approved for Type 2 diabetes, was a modest $4.6 million. However, by January 2024, monthly spending on Wegovy, one of the leading GLP-1s for obesity, surpassed $51 million, with total Medicaid expenditures for these drugs reaching a staggering $192 million by October 2024.
This surge is driven by two key factors: the increasing number of Medicaid recipients using GLP-1s for obesity treatment and the expansion of state Medicaid programs to cover these medications. As of October 2024, total Medicaid spending on GLP-1s exceeded $500 million for obesity treatment alone, contributing to an overall expenditure of $3.5 billion in the past 12 months.
State-by-State Variations in Coverage
Medicaid coverage for GLP-1s varies widely across the United States. Fourteen states, including California, Michigan, and Pennsylvania, offer full coverage for all major GLP-1s, including those for both Type 2 diabetes and obesity. These states cover medications like Wegovy, Zepbound, and Saxenda in addition to Ozempic, Mounjaro, and Rybelsus.
Twenty-two states, including Texas, Arizona, and Washington, provide partial coverage for obesity-specific GLP-1s. These states typically cover at least one obesity-specific drug, such as Wegovy, while occasionally including Saxenda or Zepbound in their Medicaid programs.
However, in 14 states and the District of Columbia, Medicaid does not cover any GLP-1s for obesity. In these regions, beneficiaries with obesity can only access GLP-1s for Type 2 diabetes, such as Ozempic or Mounjaro, but are excluded from medications like Wegovy, Zepbound, and Saxenda.
Regional Spending Patterns
Nationally, Medicaid spent $3.5 billion on GLP-1 medications between November 2023 and October 2024, which equates to an average of $48 per enrollee. However, spending per state varies significantly, reflecting both the breadth of coverage and the size of the population.
California leads the nation in total Medicaid spending on GLP-1s, with expenditures surpassing $1.4 billion, or $118 per enrollee. This is a 235% increase year-over-year, driven by the state’s large population and comprehensive coverage of all major GLP-1s. Pennsylvania ranks second in total spending, with nearly $298 million in Medicaid expenditures, also reflecting a 232% year-over-year increase.
Kentucky stands out for having the highest per-enrollee spending at $162, despite covering only Wegovy for obesity treatment, alongside Type 2 diabetes drugs. In contrast, states like North Dakota and Wyoming, which do not provide any Medicaid coverage for obesity-specific GLP-1s, report the lowest levels of spending.
Indiana’s Medicaid Landscape
In Indiana, Medicaid spent over $53 million on GLP-1 medications over the past year, ranking the state 12th in the nation for total spending. This figure represents a 42% increase from the previous year. Indiana’s Medicaid program covers one of the three FDA-approved GLP-1s for obesity—Wegovy—while offering comprehensive coverage for all major GLP-1s prescribed for Type 2 diabetes.
The Path Forward
As the Biden administration continues to propose expanding Medicaid coverage for obesity treatments, the question of cost remains central. While GLP-1s offer a transformative solution for those struggling with obesity, the high cost of these medications remains a significant barrier for many, particularly those without insurance or with limited coverage. The debate over expanding access to these life-saving treatments is likely to continue as states and policymakers grapple with balancing costs and access to care.
For more detailed insights and a full breakdown of Medicaid coverage by state, visit the full study here.
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