Medicare Part D drug plans already cover the trendy weight-loss drug Wegovy for diabetes patients, but Medicare now will also start covering it when prescribed for reducing the risk of heart attacks and strokes.
The decision comes after the Food and Drug Administration in March 2024 approved the ground-breaking and expensive drug for lowering the risk of stroke and heart attack in overweight or obese adults who do not have diabetes.
Wegovy is part of class of drugs called GLP-1s. They were originally developed to treat diabetes, but patients who take the drug typically lose significant amounts of weight. As a result, people have been clamoring for them.
This is huge news for the senior community, which has a higher rate of both diabetes and cardiovascular disease. However, there are concerns about the cost and its effect on the Medicare system.
What this means for you
It should be noted that Medicare Part D will not cover Wegovy or any other GLP-1 drug strictly for weight loss.
Also, the guidance is specific to Wegovy, since it was the one that received FDA approval to reduce the risk of stroke and heart attacks.
The Centers for Medicare & Medicaid Services guidance was actually broader than just covering Wegovy to reduce the risk of stroke or heart attack. Instead, it said that it would allow Medicare Part D health plans to “cover anti-obesity weight-loss medications if they receive FDA approval for an additional medically accepted indication.”
That means that if other Wegovy GLP-1 competitors, like Ozempic and Mounjaro, receive similar approval from the FDA, Part D would likely cover them too. Medicare already covers all three drugs for treating diabetes.
The FDA approved the additional indication for Wegovy in early March for reducing “the risk of major cardiovascular events (such as cardiovascular death, non-fatal myocardial infarction, or non-fatal strokes) in adults with established cardiovascular disease and either obesity or overweight,” in combination with a reduced caloric intake and increased physical activity.
According to the CMS guidance, Part D insurers may restrict access to Wegovy through the utilization of management tools like:
- Prior authorization to ensure they are being used for a medically accepted indication,
- Step therapy (trying other less expensive, yet proven treatments first), and
- Applying quantity limits approved by the CMS Pharmacy & Therapeutics committee at the point of sale.
Costs
Wegovy’s list price was $1,349.02 per month in April this year.
Current Part D coverage limits apply to it and all other drugs, including the $545 deductible in 2024, and the 25% coinsurance for medications until the enrollee’s out-of-pocket costs reach $8,000.
Once someone spends $8,000 out of pocket for medicines in 2024, they will reach the catastrophic benefit threshold and will have no further out-of-pocket expenses.
However, that changes in 2025, when there will be an annual out-of-pocket cap of $2,000.
Effect on Part D premiums
It’s unclear how this news will affect Part D premiums. The base monthly Part D premium for 2024 is $34.70, which is 6% higher than in 2023. Annual premium increases will be capped at 6% until 2029 under the Inflation Reduction Act that was enacted in 2022.
We note this because any premium changes due to the new guidance will be muted due to this provision. However, if the law sunsets in 2029, premiums could increase due in part to the Wegovy effect.
Also, in the 2023 Trustees Report — which neither takes into account the cap on premium increases, nor the recent Wegovy guidance — CMS actuaries projected that the premiums would reach $49.08 in 2032 (up 40% from 2024).
