A new report from the Congressional Budget Office (CBO) has revealed that if Centers for Medicare & Medicaid Services were to cover anti-obesity medications (AOMs), federal spending could increase by about $35 billion between 2026 and 2034. The total direct federal costs for covering these drugs would rise from $1.6 billion in 2026 to $7.1 billion in 2034.
While the potential health benefits of weight loss are clear, the report suggests that the savings from beneficiaries’ improved health would be modest compared to the costs. Savings are estimated to be less than $50 million in 2026, growing to around $1 billion by 2034. Per AOM user, the average direct federal cost would be about $5,600 in 2026, dropping to $4,300 in 2034. In contrast, the offsetting savings would only be about $50 per user in 2026, rising to $650 by 2034.
Obesity is a significant chronic disease among Medicare beneficiaries, contributing to adverse health effects and higher healthcare costs, which are shouldered by both the federal government and Medicare beneficiaries through premiums and cost-sharing.
Impact of Medicare Coverage for AOMs: The CBO’s estimates are based on a hypothetical policy that would extend Medicare coverage for AOMs starting in 2026, making beneficiaries who are obese or classified as overweight eligible for the medication. The report projects that over 12.5 million Medicare beneficiaries would qualify for AOMs in 2026, with approximately 2%—or 0.3 million—likely to use the drugs that year. By 2034, the number of newly qualified beneficiaries would drop to 11.9 million, though the percentage using AOMs would rise to 14%, or 1.6 million people.
After 2034, federal costs linked to AOMs may decrease per user due to the falling price of the drugs and increasing health savings. However, the CBO notes that these estimates come with significant uncertainty, as they depend on evolving factors like medication eligibility, use, pricing, and clinical benefits.
The Broader Context: A recent study from Health Affairs found that expanding Medicare coverage of anti-obesity medications could add between $3.1 billion and $6.1 billion to annual federal spending. The emergence of highly effective AOMs, such as Wegovy, has intensified discussions about Medicare Part D’s current prohibition of coverage for weight loss drugs, except in cases where they are prescribed for other conditions like stroke or heart attack prevention. Currently, without insurance coverage, medications like Ozempic, Wegovywire, and Zepbound™ (tirzepatide) HCP cost over $1,000 per month, according to GoodRx Health.
Conclusion: With substantial costs projected over the next decade, federal policymakers will have to weigh the financial burden against the potential health benefits for millions of Americans.
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