Allowing Medicare to cover popular weight loss drugs such as Wegovy and Zepbound could increase federal spending by billions of dollars, according to a new report by the Congressional Budget Office (CBO).
The CBO said Tuesday that the total direct costs for covering a class of drugs known as GLP-1 treatments for weight loss would increase from $1.6 billion in 2026 to $7.1 billion in 2034, netting about $35 billion by 2034.
At the same time, savings from beneficiaries’ improved health would be small — less than $50 million in 2026 and climbing to only $1 billion in 2034.
GLP-1 drugs, which mimic a hormone that regulates appetite and blood sugar, have shown remarkable effectiveness in treating obesity and Type 2 diabetes.
Medicare already covers GLP-1 medications such as Ozempic and Mounjaro when used to treat diabetes — however, current law prohibits the government program from covering these treatments solely for weight loss.
In April, the Centers for Medicare and Medicaid Services (CMS) issued a guidance allowing Medicare plans to cover the drugs if they have been approved for an additional use that is already covered by Medicare.
This opened the door for Wegovy, a weight loss drug from Novo Nordisk, to receive Medicare coverage when it is prescribed to reduce heart health risks.
The Food and Drug Administration (FDA) expanded the approved use of Wegovy in March, after Novo Nordisk announced results from a clinical trial that found the drug cut the risk of serious heart events by 20%.
This past summer, a House committee voted to pass The Treat and Reduce Obesity Act of 2023, a bill that would broaden Medicare coverage of weight loss drugs, to a full House vote.
According to the CBO report, if coverage for the drugs were to be expanded in 2026, over 12.5 million Medicare beneficiaries would be eligible for the medications that year, however, only 2%, or 300,000, would actually use them.
The CBO said it expects that the cost of these drugs will fall over time and that the savings from improved health will grow. Still, covering these drugs would increase federal spending through at least 2044.