The first Medicare health plans announced they will cover the weight-loss drug, Wegovy for certain patients with heart disease. By law, Medicare is not allowed to cover drugs solely for weight loss. Elevance (operates many Blue Cross and Blue Shield health plans), Kaiser Permanente and CVS Health are the first Medicare plans to cover weight loss drugs for health reasons, according to the Wall Street Journal.
The decisions will ease the financial burden on people who had been paying more than $1,000 out of pocket each month because their health plan wouldn’t cover the medicines, and spur use among people who couldn’t afford the heavy cost or didn’t want to pay for it.
But the widening coverage could result in billions of dollars in additional drug spending by health insurers that have struggled to keep a lid on rising health costs. Wegovy lists for about $1,349 a month per patient.
Drugs like Wegovy are game-changing for many people with diabetes and excess weight that defies normal attempts to lose it. But what happens when a huge portion of the population could benefit from a drug and the price is high? The question is rhetorical. What happens is the cost of Medicare Part D premiums (and private insurance premiums) skyrocket and everyone pays. Medicare spending on diabetes drugs is skyrocketing according to the Kaiser Family Foundation (KFF):
Medicare shelled out $5.7 billion on Ozempic and other similar diabetes drugs in 2022, up from $57 million in 2018, according to a new KFF analysis.
The pricey medications, which include Mounjaro and Rybelsus, have become super popular for the treatment of diabetes and for weight loss.
Even with limited coverage for drugs that induce weight-loss, the costs to Medicare still rising. The drugs were first developed for diabetes but later discovered to induce weight loss. Ozempic is the diabetes version of semaglutide, while Wegovy is the same drug but approved for weight loss. More from KFF:
Ozempic ranked as the sixth top selling medication in Medicare Part D drug plans in 2022, up from 10th the prior year, according to KFF. Medicare spent $4.6 billion on it in 2022, compared with $2.6 billion the year before. The current list price for Ozempic is $969 for a four-week supply.
The drugs’ popularity and prices could end up raising costs for both the federal government and Medicare enrollees broadly.
Nearly half of older adults, age 51 and above, are overweight. Even that figure sounds too low. I suspect a significant portion of the remaining seniors not considered overweight may wonder if Wegovy isn’t right for them too. Watching what you eat can be a pain compared to a weekly injection that barely pierces the skin (Wegovy is a peptide and most peptides must be injected). More from KHN:
Although coverage of Wegovy and similar drugs could reduce other health care spending, these medications at their current prices would probably still cost the federal government more than they would save, according to a Congressional Budget Office analysis released last week.
Why the switch in drug coverage policy? Obesity is an underlying health risk in many chronic health conditions. The demand for weight-loss drugs is high but few people can afford $15,000 a year out of pocket for a weight-loss drug. They would rather their health plan pay for it. (I’m reminded of a quote I believe came from economist Thomas Sowell, saying if something is unaffordable individually, it cannot be more affordable if paid collectively.) More from WSJ:
CMS said Part D plans, which are administered by private insurers, might cover anti-obesity medications if the drugs receive approval for an additional use. Their use for weight-loss alone would still be excluded from coverage.
That new guidance applies to Wegovy because the Food and Drug Administration this month approved the weight-loss drug’s use reducing the risk of heart attacks and strokes in people with a history of heart disease, and who have a body-mass index above certain thresholds. A study showed Wegovy reduced cardiovascular risk by about 20% versus a placebo.
Most seniors are on a fixed income, living off Social Security, pensions and retirement savings, while a few supplement their incomes with jobs. As the cost for Medicare Part D premiums rise due to the latest, greatest drug, many will find themselves struggling to pay premiums. This happened a couple years ago when an Alzheimer’s drug was approved and that one drug’s price literally caused Medicare premiums to rise.
There is no overt rationing mechanism within Medicare that determines the cost/benefit of a drug therapy. This means that the Centers for Medicare and Medicaid Services cannot arbitrarily decide whether a new, hyper-expensive drug is worth the cost. It also means seniors themselves cannot decide between Medicare drug spending and other uses for their money, that they may need to live on in old age.
Wow, 600% increase in Medicare’s weight-loss Rx in 1 year. Next year, if this trend continues it will be $36 billion to make old fat women thinner without exercise. $1,000 a month is a high price for us taxpayers for each fat-old-woman. I assume women dominate this cost because I ran 6 Richard Simmons Anatomy Asylums in Metro Denver and in men’s minds they already look good, just ask one. We need Richard Simmons to write another book called “Never Take Shots” to his “Never Say Diet.”
Biden and Obama just celebrated Obamacare’s 14th year after passage. Grey-haired LIAR Obama said Insurance Companies can no longer cancel cancer patients. What a LIAR! Every single city, county, state, and Federal employee will have their health insurance canceled if they get ovarian cancer and become too sick to work. They can only keep the coverage for just a few months. Mariana, one of the 1st tax-free MSAs in Chicago in 1997, got ovarian cancer and it took her 4 years to die. A short 18-month COBRA isn’t enough. The 1st tax-free HSA was on his dead father’s COBRA, it was ending.
Devon, in 1984 Dorothy Wildman, owner of Chicago Health Clubs and Health and Tennis Corporation of America, sold all 80 Richard Simmons’s clubs because idiot Richard lipped off to her in front of all the Denver Richard Simmons’ 300 Denver employees. We sold all 6 Denver clubs and employees to an LA couple for a few million. She said, “I saved you, Ron,” and transferred me to Denver’s Holiday Clubs which she also owned. Her clubs in Texas were called the President Clubs and in some states, Jack LaLane.
I NEVER missed a week paying for my employer-based health insurance. When I switched clubs the paychecks looked the same except a different color. BUT, BUT, BUT, this was 1984, one year before Reagan gave us the COBRA Law where sick and dying employees can now keep their insurance for 18 months. My wife was pregnant and it was not covered. She was teaching 2 classes a day in Boulder and was off NORM because she didn’t gain NORMAL weight like non-exercising women. She was in Denver General 22 hours for birth and the bill was $22,000! She refused to take one shot for pain during delivery. We didn’t have insurance so the hospital screwed us and we paid. It took a lot of years. SEE, I know COBRA well.
Devon, I have NEVER heard you ONE time suggest that sick employees’ short COBRA is a sorry excuse for American health insurance. I told idiot Texan Chip Roy, “SMU teachers pay $340/month until they get sick then the COBRA is $3,004/month when they have no hair or income. The baldheaded Texan said, “When I got cancer in 2011 my COBRA was $1,800/month!” Then proceeded to travel all over Iowa with DeSantis and neither ever mentioned DEADLY Obamacare, just like you Devon. Texans are slow, right?