Home Health Medicare Coverage for Weight-Loss Medications: Impact on Premium Costs

Medicare Coverage for Weight-Loss Medications: Impact on Premium Costs

Some Medicare prescription plans will start paying for weight-loss medications for people with heart disease.

In Short

  • Medicare prescription plans will cover weight-loss medications for heart disease patients.
  • Experts warn of potential premium increases for medicare beneficiaries due to this coverage expansion.
  • The decision highlights ongoing debates about healthcare costs and accessibility.
  • Stay updated on the evolving landscape of medicare coverage and its financial implications for individuals and the healthcare sector.

TFD – Discover how Medicare’s decision to cover weight-loss medications for heart disease patients may impact premium costs. Get insights into the potential effects on Medicare recipients and the broader healthcare system. Stay informed about the evolving landscape of prescription drug coverage under Medicare.

Still life of Wegovy
Still life of Wegovy

Experts caution that many of the 65 million persons registered in the federal health insurance program may see an increase in their monthly premium costs as a result of Medicare’s recent decision to cover the weight-loss medication Wegovy for recipients who have a risk of heart disease.

It is unknown how much the price will increase. The number of millions who are eligible for the well-known drug, which costs about $1,300 per month, will determine how much the premium hike will be.

It is possible that premiums will increase as early as 2025, but at least one health policy expert believes that increases in 2026 or later are more plausible.

The director of Georgetown University’s O’Neill Institute for National and Global Health Law, Lawrence Gostin, expressed serious concerns about both Medicare funding and rising premiums over the next ten years. “As the medication must be taken continuously to be effective, we could be facing significant lifetime expenses.”

According to the Centers for Medicare and Medicaid Services, the medication will be covered by Medicare Part D, which provides coverage for prescription medications used at home. According to KFF, an independent organization that researches health policy matters, more than 50 million Medicare members utilized Part D coverage last year.

The CMS reports that the average monthly premium for Medicare Part D beneficiaries this year is $55.50. Patients are responsible for 25% copays after they reach a so-called coverage gap until they reach a plan-specific maximum amount out of pocket. Private insurance providers with agreements with the US government offer Part D coverage.

Wegovy will now be covered by a few Part D providers, including as Kaiser Permanente and CVS Health, for individuals who are at risk of heart disease. We have contacted all of the main insurance providers for comments.

Wegovy can only be recommended to patients with heart disease who are overweight or obese, according to CMS guidelines. If Wegovy is solely being used for weight loss, Medicare will not cover its costs.

How many Medicare recipients match such requirements is still unknown. Juliette Cubanski, KFF’s deputy head of the Medicare policy program, calculated that the number is probably “several million people.”

“When costs rise, the federal government’s contribution also rises, and beneficiary premiums typically follow suit,” the spokesperson stated.

It is improbable that monthly rates associated with Wegovy would increase in the upcoming year, according to Jeffrey Davis, the director of health policy at McDermott and Consulting, a company that offers data analytics and policy recommendations to the healthcare sector.

This is because, according to him, commercial insurance providers of Part D benefits have already started to lock in Medicare payment rates for the 2025 enrollment year.

Conversely, he added, insurers might still raise rates the next year if early estimates of Wegovy’s expenses prove to be larger than anticipated.

The diabetic medication Ozempic, which has the same active ingredient as Wegovy, boosted total Medicare spending from $2.6 billion in 2021 to $4.6 billion in 2022, making it the sixth most popular medicine in Medicare Part D. This information was revealed in an analysis released by KFF last month. In 2018, Medicare started to pay for Ozempic.

Davis did warn, though, that there is a far greater chance that Wegovy will result in a premium rise as early as the 2026 enrollment year.

“This medication is pricey,” Davis remarked. “Premiums may rise in the future if millions of people are covered.”

Cubanski said even a few dollars in higher premiums can be a big deal for people on Medicare who often are retired and have limited incomes.

Obstacles to reporting

According to Gretchen Jacobson, vice president of the Medicare program at the Commonwealth Fund, it’s significant to note that Medicare is allowing insurers that offer Part D coverage to set rules before they cover Wegovy. This practice may restrict access in the near term and could keep premiums low.

Those rules include step therapy, which requires patients to try lower-cost medications before they are allowed to try medications that cost more, Gretchen said.

For example, some commercial insurers may require patients to take an earlier weight-loss medicine before allowing a GLP-1 prescription to be written.

Medicare Part D beneficiaries may also be required by their insurers to obtain prior authorization from their plans before receiving prescription drugs.

Prior authorization is common for other costly heart medications, according to Dr. Amit Khera, a fellow at the American Heart Association. Patients and providers must frequently submit test results and medical records attesting to the patients’ compliance with the drug’s requirements, which can be a burdensome process.

According to Khera, “I believe the intention is to make sure the right patient receives the right medication, but in practice, it ends up just being an extremely laborious process that, in some ways, can restrict access.”

Cutting expenses

Gostin stated that although insurance companies are often criticized for restricting patient access, Novo Nordisk might also have some of the guilt for the exorbitant expenses.

He is not alone in holding this opinion; last month, Sen. Bernie Sanders, I-Vermont, the chair of the Health, Education, Labor and Pensions Committee, urged the manufacturer to reduce the drug’s price.

He referenced research from Yale that showed the production costs of Ozempic and Wegovy may be less than $5 per month, despite the fact that Novo Nordisk charges $1,000 per month for semaglutide, the active ingredient in Wegovy, in the United States.

Gostin stated, “I believe Bernie Sanders is right to call on them to do that, especially when it comes to selling to Medicare enrollees.”

According to Cubanski, semaglutide may be subject to Medicare drug pricing talks under the Inflation Reduction Act as early as next year, even if Novo Nordisk doesn’t cut the costs.

The agreed-upon prices would not become operative until 2027.

Davis added that it’s possible that insurers offering Part D coverage may bargain for greater rebates, which are savings that pharmaceutical companies give insurers in return for coverage and which could temporarily reduce costs.

Conclusion

Medicare’s decision to cover weight-loss medications for heart disease patients poses financial considerations for both the program and its beneficiaries. As discussions on healthcare costs continue, understanding the implications of coverage expansions is crucial. Stay engaged with developments in Medicare coverage to navigate the evolving landscape effectively and ensure access to essential prescription drugs.

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