Several U.S. states are cutting or limiting Medicaid coverage for GLP-1 receptor agonists used for weight loss, citing steep costs and strained budgets.
GLP-1 medications—including Ozempic, Wegovy, and Zepbound—were originally developed to treat Type 2 diabetes and cardiovascular diseases but have grown widely popular for supporting significant weight loss. Although all state Medicaid programs cover GLP-1s for diabetes treatment, covering them for obesity is not required and has become increasingly contested due to rising state health expenditures.
As of October 1, 16 states offered Medicaid coverage of GLP-1s for obesity, up from 13 last year, according to a survey by KFF, a nonpartisan health policy group. However, several of these states are now rolling back or restructuring that coverage. North Carolina ended coverage for weight loss last month, while California, New Hampshire, and South Carolina will follow suit beginning January 1. Michigan will restrict eligibility to patients considered “morbidly obese.” Pennsylvania, Rhode Island, and Wisconsin are evaluating similar restrictions.
“This likely reflects recent state budget challenges and the significant, significant costs associated with coverage,” Elizabeth Williams, a senior policy manager at KFF, told Stateline (https://stateline.org/2025/11/28/states-retreat-from-covering-drugs-for-weight-loss/). “After a number of years of robust revenue growth right after the pandemic, states are starting to see slowing revenues, increasing spending demands and a lot of fiscal uncertainty due in part to recent federal actions.”
Between 2019 and 2023, outpatient Medicaid prescriptions for select GLP-1s surged from 755,300 to 3.8 million. Medicaid spending on these drugs grew from $597.3 million to $3.9 billion, KFF reported. The increase reflects a broader public health challenge: More than 2 in 5 U.S. adults are classified as obese, according to the Centers for Disease Control and Prevention (CDC), with obesity-related healthcare costs totaling nearly $173 billion per year.
While advocates argue that these drugs could save the system money over time by preventing conditions like diabetes and heart disease, fiscal constraints remain a major hurdle. In North Carolina, Dr. Jennifer McCauley, a weight management physician with UNC Health, told Stateline that losing GLP-1 coverage has immediate negative health effects for patients. “Now they’ve stopped coverage, so those people are now going back, regaining some of the weight, because they’re unable to obtain these medications, and also are suffering the health consequences of obesity,” she said.
James Werner, spokesperson for the North Carolina Department of Health and Human Services, told Stateline that the decision was due to inadequate state funding. He added, “Coverage of GLP1s for weight loss would be reconsidered if Medicaid is fully funded.”
Some states are tightening eligibility criteria instead of eliminating coverage entirely. Michigan and Pennsylvania are exploring more restricted access to contain costs. Connecticut will continue coverage for state employees but require them to try online weight-loss programs before receiving a prescription.
In contrast, North Dakota is taking an alternative path. After legislation to mandate Medicaid coverage failed, the state became the first to require Affordable Care Act marketplace insurers to cover GLP-1s for eligible patients.
“It’s not that anybody can walk into the doctor’s office and say, ‘Hey, I want to have this covered,’” North Dakota Deputy Insurance Commissioner John Arnold told Stateline. “It is really for those who have a medical need for the drugs, then it would be covered.” The North Dakota Insurance Department assessed that this mandate is unlikely to significantly raise premiums.
House Speaker Robin Weisz, a Republican, said the policy’s cost effects remain uncertain and will be reevaluated if insurers report an unsustainable rise in expenses.
“Our biggest concern was reducing those comorbidities and the long-term impact that that has on the cost of insurance in general, because more comorbidities means more claims,” Arnold told Stateline.
