States restrict Medicaid coverage for GLP-1 weight-loss drugs amid rising costs

US states have begun to restrict or eliminate Medicaid coverage for GLP-1 weight-loss drugs, including Ozempic and Wegovy, due to skyrocketing public spending. As of January this year, California, New Hampshire, Pennsylvania, and South Carolina have ceased coverage for weight loss, while Michigan has limited it to individuals classified as morbidly obese. Dr. Matthew Klebanoff, a professor of internal medicine, noted, "It’s just very challenging right now for payers to be able to afford covering these medications for everyone who could benefit."

The obesity rate among adults in the US was reported at 40% in August 2023, with a significant rise in GLP-1 drug usage. Spending on these medications surged from $13.7 billion in 2018 to $71.7 billion in 2023, a 500% increase. Pennsylvania's Medicaid program alone spent $1.3 billion on GLP-1 drugs in 2025, prompting state officials to consider cuts to ensure cost-effectiveness. State Representative Arvind Venkat stated, "We are 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."

The decision to cut coverage reflects a broader trend as states face budget constraints, particularly due to federal funding cuts under Donald Trump’s One Big Beautiful Bill Act, which will reduce state Medicaid funding by $665 billion over the next decade. Venkat has proposed a subscription model for GLP-1 drugs to manage costs, similar to a previous agreement in Louisiana for hepatitis C treatments, but drug manufacturers have shown little interest in such arrangements.

The current landscape suggests that while states may achieve short-term budget relief, the long-term health implications for Medicaid recipients could lead to increased healthcare costs associated with obesity-related conditions. As competition in the market potentially drives down prices, the challenge remains for states to balance fiscal responsibility with the health needs of their populations.

What to watch: The upcoming legislative discussions in Pennsylvania regarding the proposed subscription model for GLP-1 drugs will be pivotal in determining future access for Medicaid recipients.