1st Medicare Health Plans to Start Paying for Weight-Loss Drug Wegovy

Elevance, which operates many Blue Cross and Blue Shield health plans, also said it would extend coverage to people insured by a commercial plan.

Some of the plans, including Kaiser Permanente’s, are making the coverage change effective immediately, while others, including those served by Elevance, will do so in the coming weeks.

The insurers’ moves open up reimbursement of the coveted but costly class of weight-loss drugs, which had previously been excluded from Medicare coverage by a U.S. law and which many private health plans had resisted reimbursing because of the expense.

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.

Other Medicare and commercial health plans might now feel pressure to follow suit and begin coverage. 

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.

The insurers’ decisions will ease the financial burden on people on Medicare who meet the criteria and would otherwise pay more than $1,000 out of pocket each month. PHOTO: HANNAH BEIER/REUTERS

For Novo and Eli Lilly, which makes the competing anti-obesity drug Zepbound, expanding Medicare coverage could mean billions of dollars in additional sales over time. In the near term, supply shortages could limit sales growth. 

The insurers’ decisions arose from new guidance issued last week by the Centers for Medicare and Medicaid Services, which administers Medicare for millions of people 65 and older, and younger people with certain disabilities and diseases. 

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.

A committee of outside advisers to Elevance Health’s CarelonRx unit, which manages pharmacy benefits, has approved the use of Wegovy to reduce the risk of major cardiovascular events, a spokesman told The Wall Street Journal.

Coverage for this new use will become available in the coming weeks to commercial plans and Medicare Part D plans served by CarelonRx. The company also is working with state-government agencies to determine Medicaid coverage of Wegovy, the spokesman said.

Another insurer, Kaiser Permanente, said its Medicare Part D plans will cover Wegovy for plan members with heart disease effective immediately but not for patients using it for weight loss alone. Kaiser Permanente is a not-for-profit health plan based in California with 12.5 million members.

CVS Health said Part D and Medicare Advantage plans offered by its Aetna insurance unit will provide Part D coverage of Wegovy consistent with the new CMS guidance.