The nation’s largest Medicaid program could eliminate coverage of GLP-1 drugs for weight loss.
A proposed budget published by California Gov. Gavin Newsom would eliminate coverage for GLP-1 drugs for weight loss beginning in 2026. The proposal would save an estimated $85 million in 2026, growing to $685 million by 2029.
California is contending with a $12 billion budget deficit and Medi-Cal, the state’s Medicaid program, is facing shortfalls. In March, the state borrowed $3.4 billion to pay managed care plans and providers, and lawmakers later approved an additional $2.8 billion in funding to cover shortfalls.
As part of the budget, Mr. Newsom proposed other changes to shore up Medi-Cal’s finances, including freezing enrollment for undocumented immigrants, reimplementing asset limits for eligibility and implementing tougher utilization management for prescription drugs.
California is one of only a handful of states that cover GLP-1 drugs for weight loss through Medicaid, according to a 2024 JAMA study. The drugs can cost more than $1,000 a month.
Some commercial insurers have moved to drop broad coverage of the drugs for weight loss, citing unsustainable costs.
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