Weight-loss drug popularity has skyrocketed. Between 2020 to 2022, the number of prescriptions has risen to around 9 million in the U.S. With celebrity attention, positive clinical trials, and even more versions in the FDA approval pipeline, expect to see continued consumer demand.
How are FEHB plans and Medicare covering these drugs? We’ll walk you through where things stand and what to look for in the future.
FEHB Plan Coverage
Weight-loss drugs are classified as GLP-1 (glucagon-like peptide-1) receptor agonists, and the ones approved by the FDA include Qsymia, Contrave, Saxenda, Wegovy, and Zepbound. In addition, Ozempic and Mounjaro have FDA approval for type 2 diabetes blood sugar control but are often prescribed “off-label” for weight loss. That means a doctor prescribes the medication for a use not specifically approved by the FDA or in product labeling.
In early 2023, OPM issued a letter to FEHB carriers related to the prevention and treatment of obesity. Besides guidance on screening and prevention, OPM specified that carriers must cover at least one GLP-1 weight-loss drug. Additionally, carriers must annually evaluate their coverage as new drugs receive FDA approval to meet the OPM mandate of non-discriminatory access to safe and clinically appropriate drug therapy for individuals with chronic conditions.
For federal employees and annuitants, this means you’ll see a wide range of cost and coverage options for weight-loss drugs from FEHB plans.
For example, here’s how a monthly supply of Wegovy is covered by BCBS plans:
|FEHB BCBS Plan
|FEP Blue Focus
You’ll need to research which FEHB plan covers your drug at the lowest cost while also considering other plan features that are important, such as premium, yearly total costs, and access to doctors.
Unlike in the ACA marketplaces, there is no current requirement for FEHB carriers to submit machine-readable drug formularies. This means that you’ll need to search manually. Some carriers like BCBS make this easier by having prescription drug pricing tools where you can input your drug, dosage, location, and pharmacy and be shown prices, while many other carriers still rely on multi-page formulary PDFs that require decoding.
Also, keep in mind that before an FEHB plan will authorize the use of a weight-loss drug, prior approval for the individual must be received by the plan.
Currently, Medicare doesn’t provide coverage for weight-loss drugs. This decision dates back to Medicare Part D’s creation in 2003 when their safety and effectiveness was questioned, leading to a ban in coverage that remains today. However, Medicare Part D plans do cover Ozempic if prescribed for type 2 diabetes, not weight loss. In fact, Ozempic is one of the top 10 Medicare Part D drugs with total gross spending of $2.6 billion in 2021.
Annuitants looking for weight-loss medications will need to take the lack of Medicare coverage into consideration when selecting an FEHB plan.
First, since Part D is packaged into FEHB Medicare Advantage plans, they will not cover weight-loss medications. Despite these plans’ enhanced benefits, having to pay $10,000 or more a year out-of-pocket for your weight-loss medication will erode their value. Finding an FEHB plan that covers your prescription will be a better financial choice.
Second, if you are enrolled in an FEHB plan that covers your weight-loss medication and are then auto-enrolled into a Part D plan, you will lose coverage for that drug. Pay close attention to communications from your plan before and during Open Season and decline Part D if keeping access to your weight-loss medication is important to you. For plan year 2024, there were 17 FEHB plans that auto-enrolled annuitants with Medicare into a Part D prescription drug plan. We expect this trend to continue with even more FEHB plans following suit.
The Final Word
The good news for federal employees and annuitants is that all FEHB plans currently cover at least one weight-loss medication. As new drugs receive FDA approval, expect to see OPM continue to revise coverage guidance.
For a specific weight-loss medication, you’ll need to consult the prescription drug formulary for the available plans in your area to check on coverage and pricing. It can be found on the plan website, and some offer pricing tools that make finding the answer easier.
Medicare coverage of weight-loss drugs could be changing. The Treat and Reduce Obesity Act, HR4818, was introduced in 2023 with 65 cosponsors from across the aisle. The bill, if passed, would allow Medicare Part D to start covering drugs used for the treatment of obesity.
Annuitants should pay close attention to see if this bill passes. It would open the door for FEHB Medicare Advantage plans and Part D plans, both of which are off the table now for annuitants looking for weight-loss medication coverage.