Weight Loss Drug Coverage from FEHB Plans and Medicare

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:

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.

OPM guidance for plan year 2025 encourages FEHB carriers to implement real-time benefit tools to help enrollees view accurate pharmacy benefits, including member cost share. This should make researching prescription drug coverage and cost easier for federal employees and annuitants next year.

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Medicare Coverage

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.

The lack of Medicare coverage for weight-loss drugs will not impact federal annuitants. That's because Employer Group Waiver Plans, either FEHB Medicare Advantage or Part D PDP, are allowed to enhance standard Part D benefits to include those offered by the FEHB plan. The requirement of coverage for at least one GLP-1 drug from every FEHB plan remains true for each EGWP. This means federal annuitants don't need to worry about losing access to their current FEHB weight-loss drug when enrolled in a PDP or FEHB Medicare Advantage plan.

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.

Federal annuitants are not impacted by Medicare's restriction of weight-loss drug coverage and can enjoy this benefit through EGWPs, which include a $35 monthly cap on insulin and the $2,000 out-of-pocket prescription drug maximum that all Part D plans will have in plan year 2025.

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