Over half of U.S. adults might benefit from GLP-1 drugs, which are transforming care for people who are overweight or obese, or who have diabetes or cardiovascular disease. The drugs are expensive, however, costing around $1,000 a month. Even cheaper GLP-1s cost hundreds of dollars monthly.

The high cost and large potential patient population for GLP-1 medications threaten the budgets of insurers and states. Among the remedies are a forthcoming Medicare-Medicaid program in which drug manufacturers may offer lower GLP-1 prices and weight-loss lifestyle interventions to some enrollees. Another is a White House agreement with Novo Nordisk and Eli Lilly to cap GLP-1 prices at no more than $350 a month, including for Medicare and Medicaid beneficiaries.

“These deals could encourage expansion of GLP-1 coverage,” said LDI Senior Fellow Matthew Klebanoff. “But coverage is more nuanced than a yes-no decision.”

Insurers may respond to lower GLP-1 prices by increasing restrictions, which are already stringent, as Klebanoff showed in two studies with LDI Senior Fellows Jalpa Doshi and Judith Long, and colleagues. 

Insurers raised cost-sharing sharply for GLP-1s in recent years, Klebanoff found. Insurers also increased use of prior authorization, which requires doctors to get plan approval before prescribing GLP-1s. Klebanoff answered questions about his findings below.

What’s the difference between all these GLP-1 medications?

Klebanoff: Ozempic and Wegovy are brand names for drugs that contain semaglutide, and Mounjaro and Zepbound are brand names for tirzepatide. Even when these drugs contain the same active ingredients, they are FDA-approved for different indications.

For example, Ozempic is approved for diabetes, and Wegovy is approved for weight loss, reducing cardiovascular disease risk, and treating certain patients with fatty liver disease. Most insurance plans cover the diabetes versions, but insurers often restrict access to the weight-loss versions.

What’s the current status of Medicare coverage of GLP-1s?

Klebanoff: Most Medicare beneficiaries are covered for semaglutide and tirzepatide for diabetes. However, under federal law, Medicare cannot cover these drugs for weight loss. It rarely covers them for other non-diabetes indications. 

Beneficiaries are paying more for these drugs than they used to. Our study using 2020 to 2025 Medicare data showed dramatic increases in out-of-pocket costs for GLP-1s, because of insurers’ reactions to the 2022 Inflation Reduction Act. The law raised insurers’ financial liability for expensive drugs and insurers shifted these costs to consumers. Under some plans, the average monthly cost of Mounjaro nearly doubled from 2024 to 2025, from $99 to $196.

What’s the status of Medicaid coverage?

Klebanoff: Medicaid programs are not required to cover drugs for weight loss, even if FDA-approved. Right now, most states cover GLP-1s approved for diabetes, but coverage for weight-loss versions varies across states and remains limited. In our study using June 2024 data on fee-for-service Medicaid in 50 states and Washington, D.C., only 13 covered GLP-1s for weight loss in adults. Most required prior authorization.

How does prior authorization affect GLP-1 access?

Klebanoff: Prior authorization requires clinicians to justify a patient’s need for treatment and get insurer approval for coverage. Clinicians say it’s an administrative challenge because insurers have inconsistent coverage criteria, require time-intensive documentation, and frequently deny coverage. 

Our Medicare study found that prior authorization for the diabetes GLP-1s increased in the last few years. Authorization was required for 5% or fewer of beneficiaries until 2024, then by 2025, it was required for nearly 100% (Figure 1). This probably reflects an effort by insurers to deter off-label use of GLP-1s for weight loss.

In our Medicaid study, we manually reviewed each state’s prior authorization policy and found that most were more restrictive than FDA criteria for the drugs. For GLP-1s for overweight adults, the FDA label says they should have at least one additional, unspecified health risk. Two prior authorization policies required at least two comorbidities and 70% of policies specified the conditions.

What is the policy outlook for GLP-1 coverage?

Klebanoff: Even with lower negotiated prices, prior authorization may block access to GLP-1s for both obesity and diabetes, even for patients who are clinically eligible for treatment. To prevent this, the Centers for Medicare and Medicaid Services (CMS) could require state Medicaid programs to meet standardized prior authorization criteria before getting access to lower prices. Precedent comes from the Cell and Gene Therapy Access Model, which requires participating states to meet coverage and prior authorization standards to get negotiated prices for sickle cell therapies.

Pennsylvania eliminated Medicaid coverage of GLP-1s for weight loss starting in January 2026 and other states may follow. This change would abruptly disrupt care for patients who are benefiting from GLP-1s. 

For Medicare beneficiaries, the White House deal promises to cap GLP-1 out-of-pocket costs at $50 per month. However, if lower costs lead to wider GLP-1 use, Medicare Part D plans’ total spending could increase. The plans may respond by making prior authorization even more burdensome. CMS should closely monitor prior authorizations and denials to ensure patients can access GLP-1s.

What are you working on now?

Klebanoff: We are studying GLP-1 prior authorization policies across U.S. insurance segments, including health insurance exchange plans and employer-sponsored insurance. In the future, we will link our findings to patient-level claims data to understand how prior authorization design affect medication initiation, adherence, and patient outcomes.

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The study, “Medicare Part D Coverage and Costs for Glucagon-Like Peptide-1 Receptor Agonists,” was published on September 25, 2025 in the JAMA. Authors included Matthew J. Klebanoff, Pengxiang Li, Judith A. Long, and Jalpa Doshi.

The study, “Medicaid Coverage and Prior Authorization for Antiobesity Glucagon-Like Peptide-1 Receptor Agonists: A Cross- Sectional Study of State Policies,” was published on November 21, 2025 in the Journal of General Internal Medicine. Authors included Matthew J. Klebanoff, Ashwin K. Chetty, and Jalpa Doshi.

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