Medicare to Cover Weight Loss Drugs Under Trump Proposal

Medicare will cover weight loss drugs Ozempic, Wegovy, Mounjaro, and Zepbound for weight management purposes starting in April 2026 for Medicaid and January 2027 for Medicare plans. The Trump administration proposal allows state Medicaid programs and Medicare Part D insurance plans to voluntarily cover these drugs. The experiment aims to start in 2026 and 2027, respectively.

The Trump administration has proposed a pilot program that could allow some Americans on Medicare and Medicaid to access popular and costly weight-loss medications, such as Ozempic, Wegovy, Mounjaro, and Zepbound. The plan, still in development, would permit state Medicaid programs and Medicare Part D plans to voluntarily cover GLP-1 drugs for weight management purposes [1].

The initiative, set to launch in April 2026 for Medicaid and January 2027 for Medicare, would run through the Center for Medicare and Medicaid Innovation (CMMI). This testing lab explores new payment models to improve care and reduce health care spending [1].

The proposal comes after the Trump administration rejected a Biden-era plan to provide coverage of GLP-1 drugs for weight loss under Medicare and Medicaid. However, the new pilot could move forward without requiring a formal public comment process [1].

While Medicare currently covers these drugs mainly for Type 2 diabetes, some private insurers already approve them for weight loss. The pilot would also include Eli Lilly’s GLP-1 drug Orforglipron, pending its expected approval in 2026 [1].

Covering these drugs is not without significant cost concerns. The Congressional Budget Office estimates Medicare could spend around $35 billion on GLP-1 coverage for obesity between 2026 and 2034. These medications typically cost $5,000 to $7,000 annually per patient [1].

The Trump administration is currently negotiating prices for 15 drugs for Medicare patients starting in 2027, including semaglutide, the weight-loss drug in Ozempic and Wegovy. These negotiations could have an impact on the costs and the rollout of the five-year program being considered by CMS [1].

The GLP-1 drugs can cost $1,000 or more a month without insurance coverage, although Novo Nordisk and Eli Lilly are selling their drugs directly to U.S. consumers at a cash price of $499 a month [1].

Federal Medicaid funds are expected to be cut drastically as a result of the Republican legislation known as the One Big Beautiful Bill, which was signed into law last month. The Congressional Budget Office estimated that the bill would reduce Medicaid spending by about $911 billion over a decade [1].

States will be feeling a lot of financial pressure. A voluntary approach may be less likely to produce broad participation [1].

References:
[1] https://www.morningstar.com/news/marketwatch/20250802225/weight-loss-drugs-may-be-covered-by-medicare-medicaid-under-experimental-program