InvestNot yet confirmed elsewhere1 publisher2 min readPublished
Medicaid GLP-1 spending has risen since 2019 although only 13 state programs cover obesity use
KFF counts 13 state Medicaid programs covering GLP-1s for obesity under fee-for-service as of January 2026. Medicaid prescriptions and gross spending on the drugs have risen substantially since 2019, so public use is growing even where obesity coverage is thin.
The Investor · Invest desk
What happened
- KFF says some state Medicaid programs are restricting GLP-1 coverage despite recognizing the drugs work, as tighter budgets and federal cuts in the 2025 reconciliation law force a re-evaluation.
- The Trump administration decided not to proceed with a Biden proposal that would have required Medicaid to cover obesity drugs and allowed Medicare to do so.
- In November 2025 the administration announced a deal with Eli Lilly and Novo Nordisk to lower GLP-1 costs for Medicare, Medicaid and buyers using the TrumpRx website.
- In December 2025 it introduced BALANCE, a five-year CMS Innovation Center model that would negotiate lower GLP-1 prices to widen obesity drug access in Medicaid and Medicare.
Why it matters
- exposure Almost four in ten adult enrollees have obesity, and KFF says that unless Medicaid covers the drugs they are unlikely to get them, since even TrumpRx prices likely stay out of reach at Medicaid incomes.
- decision A state weighing coverage pays now for savings that can take many years to arrive, and enrollees who change coverage take those savings out of Medicaid. Long-term savings can therefore sit outside the budget decision.
- contradiction KFF's page headline says programs dropped the drugs for obesity this year, but the brief's key takeaways report only the January 2026 count, so there is no baseline for sizing any drop.
- constraint The federal price cuts cannot yet be scored against state budgets: KFF says it is unclear how the new costs compare with the net prices Medicaid programs pay now.
The angle runs two things together: the drug and the indication. Obesity coverage is optional for states, while coverage for diabetes, cardiovascular disease and sleep apnea is required [6]. A state that drops the obesity indication removes one channel of demand and leaves the others running by statute (that is our inference from KFF's description of the exception; KFF does not size the split). KFF attributes the growth in prescriptions and spending in part to higher use of Ozempic and Wegovy as well as Mounjaro and Zepbound [7]. A state can trim the optional indication while those products keep adding volume under the required ones.
In our view, some states are declining to extend the optional obesity indication while public-payer demand for these drugs continues under the required ones. The reason KFF gives for the restriction is cost [3]. The counter-thesis is that 13 covering programs is already the remnant of a larger group, that more states follow as the federal cuts bite, and that Medicaid volume turns down once the optional channel closes. We rate that possible and unproven, because KFF gives only the January 2026 count.
Two other outcomes would also fit the evidence. The federal deal and the BALANCE model could pull states back in if the negotiated prices land below what states pay today [4][5]. Or states could keep restricting at any federal price because the 2025 cuts leave them less to spend [3]. Either leaves prescription counts rising, so coverage counts and prescription counts need to be tracked separately.
We would be wrong if the next KFF count shows fewer than 13 fee-for-service programs covering the drugs for obesity and Medicaid prescriptions fall over the same period. A shorter coverage list alone would only confirm the restriction KFF already describes.
What to watch
- KFF's next count of fee-for-service programs covering GLP-1s for obesity, against the 13 reported for January 2026.
- Medicaid GLP-1 prescription counts in the next data release; a decline would break the view that public use is still growing.
- Whether BALANCE's negotiated prices change any state's decision to cover or restrict the drugs for obesity.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence58
- Adoption
- Insufficient
- Hype gap+25
- Incentives
- Insufficient
- Confidence55
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
As of January 2026, 13 state Medicaid programs covered GLP-1s for obesity treatment under fee-for-service.
- [2]
The number of Medicaid prescriptions and gross spending on GLP-1s have both increased substantially since 2019.
- [3]
Some state Medicaid programs are restricting GLP-1 coverage despite recognizing their effectiveness at treating obesity, because of cost; states face tighter budgets, due in part to federal Medicaid cuts in the 2025 reconciliation law, and are re-evaluating obesity drug coverage.
- [4]
In November 2025 the Trump administration announced a deal with Eli Lilly and Novo Nordisk to lower the cost of their GLP-1s for Medicare, Medicaid, and people buying directly from the manufacturers through the TrumpRx website.
- [5]
In December 2025 the administration introduced the BALANCE model, a five-year CMS Innovation Center model that intends to expand access to obesity drugs in Medicaid and Medicare by negotiating lower GLP-1 prices with manufacturers.
- [6]
State Medicaid programs must cover nearly all FDA-approved drugs, but a statutory exception makes coverage of weight-loss drugs optional for states; coverage for other indications (diabetes, cardiovascular disease and sleep apnea) is required.
- [7]
Increased utilization of Ozempic and Wegovy (semaglutide) and of Mounjaro and Zepbound (tirzepatide) has contributed substantially to recent growth in Medicaid GLP-1 prescriptions and spending.
- [8]
Savings on health spending from obesity drugs may take many years and may not accrue to the Medicaid program if individuals shift coverage, so states may not be factoring long-term savings into coverage decisions; evidence on reduced spending is mixed.
- [9]
Unless Medicaid covers obesity medications, enrollees are unlikely to have access to them given the high out-of-pocket cost even at lower prices; TrumpRx purchases will likely still be prohibitive for low-income Medicaid enrollees.
- [10]
Almost four in ten adults and a quarter of children with Medicaid have obesity.
- [11]
How the new lower federal costs compare to the net prices state Medicaid programs currently pay, and how states will respond amid tightening budgets, remain unclear.
- [12]
The Trump administration decided not to proceed with a Biden administration proposal to allow Medicare and require Medicaid to cover obesity drugs.
- [13]
KFF's page headline says Medicaid programs in the US dropped GLP-1s for obesity this year, while the brief's key takeaways report only the count of 13 covering programs as of January 2026.
Sources
1 independent publisher whose own reporting we read for this story.
- Medicaid programs in the US dropped GLP-1s for obesity this year
kff.org
1 article · October 12, 2026
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