The Withdrawal of State Support for Weight-Loss Medications
While some American cities and states used to cover the cost of certain weight-loss drugs for low-income citizens and public employees, an increased demand has led to a reduction or even discontinuation of these benefits. The high cost of drugs like Ozempic and Wegovy have taken a toll on public spending, leading to this pullback.
The Debate Over Medication Coverage
Despite the financial reasoning behind this decision, some lawmakers and healthcare providers are protesting the move. They believe that this short-term financial solution may harm the health of Medicaid recipients in the long run. The fear is that these cities and states might end up paying more for obesity-related health issues if these drugs are not covered.
One expert in internal medicine who has studied the approval policies for these weight-loss drugs shares this viewpoint. "Access to these therapies is vital for patients," he says. "However, it's becoming increasingly difficult for payers to cover these medications for everyone who could potentially benefit."
The Obesity Crisis and Its Financial Toll
The adult obesity rate in the US was at 40% just a few years ago. By the end of 2025, 12% of adults reported using a weight-loss drug, a 6% increase from a year and a half earlier. These drugs have contributed to a decrease in the country's obesity rate, which fell to 37% in 2025.
However, this progress comes at a steep price. Spending on these weight-loss drugs surged from $13.7 billion to $71.7 billion within just a few years, marking a 500% increase.
State Medicaid Programs and Coverage Changes
By late 2025, sixteen state Medicaid programs covered these drugs for obesity, although most states cover them for diabetes. Early the following year, several states, including California, New Hampshire, Pennsylvania, South Carolina, and Michigan, made changes to their coverage. Some stopped covering these drugs for weight loss, while others only offered coverage to those classified as morbidly obese.
City health insurance plans are also making changes. New York City stopped covering these drugs for city employees in 2025. Boston is considering limiting coverage for city employees due to an insurance rate increase driven largely by the cost of these drugs.
This comes at a time when many states are struggling with budget issues due to a federal bill that will cut state Medicaid funding by $665 billion over the next ten years.
Impact of Coverage Reduction
Medicaid spending on these weight-loss drugs in Pennsylvania doubled to $1.3 billion in 2025. Following this surge, the state has cut some coverage due to an "unsustainable rise in costs."
The Medicaid program in Pennsylvania now only covers these drugs for people with diabetes or those who meet a narrower set of criteria, such as those with sleep apnea or a body mass index of at least 35.
One state representative, who is also a physician, criticized the state for "essentially allowing people to be much sicker than they should be before we allow them to have access to a medication which has been shown to be safe."
Case Study: The Impact on Individuals
One case that illustrates the impact of these changes involves a young woman with autism who struggled with weight issues because her brain does not signal when she is full. When she started taking a weight-loss drug as a Medicaid recipient, she lost nearly 30 pounds. However, when the state stopped covering the drug, her father could not afford the $400 monthly cost out of pocket. Her doctor prescribed a less expensive drug, but it has not been as effective, and she has regained weight.
A Potential Solution
In response to these issues, the same state representative has proposed a bill to create a subscription model for these drugs. This model would involve "value-based arrangements with drug manufacturers through supplemental rebate agreements," similar to an agreement made by Louisiana with a hepatitis C drug manufacturer. The deal would involve the state paying a flat fee for unlimited access to the medication for five years.
However, drug manufacturers may be hesitant to agree to such a deal, as demand for these drugs is already high.
The Future of Drug Prices
Some experts believe that the high cost of these drugs will eventually decrease as more competition enters the market.
Until then, Medicaid recipients will need to find alternative ways to access these drugs, which could include getting diagnosed with a qualifying condition like sleep apnea.
A Matter of Political Will
One state representative argues that the issue of covering these drugs is a matter of political will. "If all we are trying to accomplish is to save money on a single year budget basis, the state is doing that," the representative said. "But our goal should be more than that. It should be to keep people healthy."