Medicare Could Save $500 Million With Coverage Change

Anti-obesity medications are a hot topic in the medical world, and many Americans remain conflicted on how and when they should be covered by health insurance.

Despite the controversy around paying for weight loss drugs like Ozempic, a new Intensity report found covering the anti-obesity medications could in fact save Medicare around $500 million yearly.

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This is because the government-run insurance would end up saving money in treatments related to obesity, like heart disease and cancer, for example.

Additionally, Medicare anti-obesity medications would only range between 0.8 percent to 1.3 percent of Medicare Part D spending between 2024-2030, according to the report. That would amount to between $1.6 billion and $2.1 billion per year, but that's a significant chunk less than the 9 percent Medicare Part D spent covering cardiovascular treatments in 2021, the Intensity report found.

Obesity has been one of the leading causes of health complications and deaths in America for decades, and while there have always been some medications to assist with it, drugs like Ozempic and Mounjaro have changed the game for many Americans.

While drugs like Ozempic first arrived as an injectable option to manage blood sugar levels for patients with Type 2 diabetes, they've also been prescribed by doctors for general weight loss.

The drugs work because they contain a glucagon-like peptide 1 (GLP-1), which can help in regulating appetite and blood sugar and induces an artificial feeling of fullness.

"The publicity behind these products has generated positive and negative buzz in the mainstream, so it's easy to see why some would applaud the consideration of including more of these medications in the Medicare system, while others would be dismissive of them," Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, told Newsweek. "The reality is obesity is not just a health issue. It's an economic one."

Americans are invariably paying more in health care costs as obesity has become more prevalent across the United States, so covering the drugs under both private and public government insurance could go a long way to reducing costs over time.

In 2016, more than 650 million adults classified as obese, according to the World Health Organization. That marked a surge in obesity numbers by triple since 1975.

"Incorporating more medications that serve to help it in Medicare will ultimately lead to less money being spent across the board," Beene said. "It's a huge win for long term money savings and health improvement."

The costs savings could be major as Medicare is projected to run out of funding within the next decade, according to a recent Treasury Department's Social Security and Medicare Trustees Report.

By 2036, health care revenues are predicted to only cover 89 percent of estimated expenditures, dropping down to just 87 percent in 2048, the analysis found.

"Today's Trustees reports drive home the fact that the clock is ticking down on automatic cuts to Social Security and Medicare," Michael Peterson, CEO of the Peter G. Peterson Foundation, said in a statement at the time. "It's actually harmful to promise not to touch these essential programs, because failing to act will mean significant, immediate cuts that affect millions of Americans."

Correction 05/15/24 1:09 p.m. ET: Intensity's first news release specified the amount saved as $600M; this article has been corrected to reflect the report's estimated savings of $500M.