On November 6, 2025, the Trump administration announced a deal that could save millions of Medicare and Medicaid patients thousands of dollars annually on obesity medications. According to the American Medical Association, pharmaceutical giants Novo Nordisk and Eli Lilly agreed to slash prices on glucagon-like peptide-1 (GLP-1) drugs—the same medications that have sparked a weight-loss revolution but cost patients $900–$1,300 monthly without coverage.
The bigger news? For the first time ever, the Centers for Medicare & Medicaid Services (CMS) will cover these obesity drugs under federal health programs. Your co-pay if you qualify: just $50.
This isn’t minor tweaking of insurance policy. This is a complete reversal of how America’s public health programs treat obesity medication—and it affects roughly 50 million Medicare beneficiaries and 80+ million Medicaid enrollees who could potentially access these drugs.
Why GLP-1 Drugs Cost So Much (Until Now)
GLP-1 medications like Ozempic, Wegovy, Mounjaro, and Zepbound became household names in 2023-2024 as celebrities and everyday Americans shed dramatic weight. But there was a catch: insurance rarely covered them for obesity treatment.
The math looked brutal:
- Monthly retail price: $900–$1,300 without insurance (that’s $10,800–$15,600 annually)
- Insurance coverage rate for obesity: Less than 25% of private plans covered these drugs specifically for weight loss
- Medicare/Medicaid coverage: Zero. Federal programs explicitly excluded obesity medications from formularies
Patients faced a choice: pay thousands out-of-pocket or skip treatment entirely. Most chose the latter.
Why the sky-high prices? Pharmaceutical companies argued these drugs require complex manufacturing and years of R&D investment. Critics pointed to Novo Nordisk and Eli Lilly posting record profits while Americans rationed doses or bought medication from international pharmacies.
What Changed on November 6: The Deal Breakdown
The Trump administration negotiated directly with drugmakers. Here’s what they agreed to:
| Change | Old Policy | New Policy (2025) |
|---|---|---|
| Medicare Coverage | Not covered for obesity | Covered for eligible patients |
| Medicaid Coverage | Not covered for obesity | Covered for eligible patients |
| Patient Co-Pay | $900–$1,300/month (full cost) | $50 co-pay |
| Annual Patient Cost | $10,800–$15,600 | $600 ($50 x 12 months) |
That’s a 95%+ cost reduction for patients who qualify.
But there’s more to this story. CMS simultaneously launched something called the GENEROUS Model—short for “Generating Cost Reductions for U.S. Medicaid.” This new program allows state Medicaid programs to buy participating drugs at prices aligned with what other countries pay.
Translation: If Canada pays $400/month for the same GLP-1 drug that costs $1,200 in the U.S., American Medicaid programs can now negotiate down to that international price.
Who Qualifies for $50 Co-Pays?
Not every Medicare or Medicaid patient automatically gets access. CMS hasn’t released complete eligibility criteria yet, but based on the announcement, coverage likely requires:
- Body Mass Index (BMI) threshold: Typically 30+ (obese) or 27+ with weight-related health conditions like diabetes or high blood pressure
- Medical necessity documentation: Your doctor must demonstrate that weight loss is medically necessary, not cosmetic
- Failed previous attempts: Some plans may require proof you tried diet, exercise, or other weight loss methods first
- Continuous monitoring: Regular check-ins with your healthcare provider to track progress and side effects
If you’re already on Medicare Part D or Medicaid prescription coverage, you won’t need to switch plans. The coverage should integrate into existing drug benefits.
How This Compares to Private Insurance
Private insurers have been all over the map on GLP-1 coverage. Some employer plans cover these drugs generously. Others exclude them entirely, citing cost concerns.
Now, federal programs just leapfrogged many private plans:
- Typical employer plan co-pay for GLP-1 drugs (when covered): $50–$300 monthly
- Medicare/Medicaid co-pay (new policy): $50 monthly
- Uninsured patient cost: Still $900–$1,300 monthly at retail (no change without coverage)
This creates pressure on private insurers. If the federal government covers obesity drugs at $50 co-pays, expect employers and unions to demand similar terms during 2026 contract negotiations.
America’s Health Insurance Plans (AHIP), the industry trade group, hasn’t publicly commented yet. But behind closed doors, insurers face a dilemma: match federal coverage or risk losing members to Medicare Advantage plans that include these benefits.
The GENEROUS Model: International Price Alignment
Here’s where things get interesting for state Medicaid programs.
Under the new GENEROUS Model, states can negotiate drug prices based on what other developed nations pay. The concept isn’t new—progressives have proposed international reference pricing for years. What’s new is CMS implementing it through an innovation model rather than waiting for Congressional approval.
How it works:
- Reference countries likely include: Canada, UK, Germany, France, Japan—nations with government-negotiated drug prices
- Medicaid savings potential: 30-60% below current U.S. list prices for participating drugs
- Participating manufacturers: Voluntary initially (but Novo Nordisk and Eli Lilly are confirmed participants)
- State adoption: Individual states choose whether to participate in GENEROUS or maintain current procurement
The pharmaceutical industry hates international reference pricing. Drug companies argue it undermines R&D funding and creates “free rider” problems where Americans subsidize drug development for other countries.
Consumer advocates counter that Americans already pay 2-3 times more than other nations for identical medications. The GENEROUS Model simply levels that playing field.
What Happens Next: Timeline and Implementation
The November 6 announcement didn’t include specific rollout dates. Based on typical CMS policy changes:
- Immediate (Nov-Dec 2025): CMS publishes detailed coverage guidelines and eligibility criteria
- Q1 2026: Medicare Part D plans update formularies to include GLP-1 obesity drugs
- Q2 2026: State Medicaid programs begin GENEROUS Model enrollment (states move at different speeds)
- Mid-2026: First patients receive $50 co-pay prescriptions through federal programs
If you’re on Medicare or Medicaid and want these medications, don’t wait. Schedule an appointment with your doctor now to:
- Discuss whether GLP-1 drugs are medically appropriate for your situation
- Get documentation started (BMI records, weight-related health conditions, previous weight loss attempts)
- Position yourself to request coverage as soon as your plan updates its formulary
Your doctor won’t be able to prescribe under the new coverage until CMS releases final rules, but you can start building your medical case today.
The AMA’s Take: Why Medical Groups Support This
The American Medical Association released a statement praising the price reduction and coverage expansion. That’s significant—physician groups don’t always align with government drug pricing initiatives.
Why doctors support this move:
- Obesity is a disease, not a lifestyle choice. The medical community recognizes obesity as a chronic condition requiring treatment, not just willpower.
- Untreated obesity costs more than treatment. Heart disease, diabetes, joint problems, and other obesity-related conditions generate far higher healthcare spending than GLP-1 drugs.
- Patients were being denied effective treatment due to cost. Doctors hate telling patients “this would help you, but you can’t afford it.”
The AMA has prioritized prescription drug affordability for years. This deal delivers on that goal in a tangible way.
Will Private Insurers Follow?
That’s the $50 billion question.
Private insurance currently covers about 177 million Americans—more than Medicare and Medicaid combined. If even 10% of those people qualify for GLP-1 obesity treatment, we’re talking about 17+ million potential patients.
At current retail prices, that’s a $180–$270 billion annual cost if all eligible patients got treatment. Even with negotiated discounts, private insurers face massive financial exposure.
Three scenarios for private coverage:
- Slow adoption (most likely): Insurers add GLP-1 coverage but with strict criteria—higher BMI thresholds, longer prior authorization requirements, stepped therapy protocols
- Competitive pressure (possible): Medicare Advantage plans advertise $50 GLP-1 co-pays, forcing traditional commercial plans to match benefits or lose market share
- Premium increases (likely): Even with price cuts, adding obesity drug coverage raises overall plan costs—expect 2026 premiums to reflect this
If you have employer-sponsored insurance, watch your 2026 open enrollment materials. Plans that previously excluded obesity drugs may add coverage, possibly with higher premiums or new utilization management restrictions.
Frequently Asked Questions
How do I know if I qualify for $50 co-pay GLP-1 drugs on Medicare?
CMS hasn’t released final eligibility criteria yet, but expect requirements to include a BMI of 30+ (or 27+ with related health conditions like diabetes), medical documentation that weight loss is medically necessary, and possibly proof of previous weight loss attempts. Contact your Medicare Part D plan or Medicare Advantage provider in early 2026 for specific coverage details once CMS publishes guidelines.
Will my private health insurance lower GLP-1 drug prices to match Medicare?
Not automatically. Private insurers negotiate separately with drug manufacturers and aren’t bound by Medicare pricing. However, competitive pressure may force some plans—especially Medicare Advantage plans competing with traditional Medicare—to offer similar $50 co-pays or expanded coverage. Check your 2026 plan documents during open enrollment to see if obesity drug coverage changed.
What is the GENEROUS Model and how does it affect Medicaid drug prices?
GENEROUS (Generating Cost Reductions for U.S. Medicaid) allows state Medicaid programs to purchase participating drugs at prices aligned with what other developed countries pay—typically 30-60% below current U.S. prices. It’s voluntary for both states and drug manufacturers. Novo Nordisk and Eli Lilly confirmed participation, meaning their GLP-1 drugs will be available through this model in states that opt in.
When will I actually be able to get GLP-1 obesity drugs with my Medicare coverage?
CMS hasn’t announced specific implementation dates. Based on typical policy rollouts, expect coverage guidelines by late 2025, Medicare Part D formulary updates in Q1 2026, and actual patient access to $50 co-pay prescriptions by mid-2026. Start documenting your medical necessity with your doctor now so you’re ready when coverage begins.
Why did Novo Nordisk and Eli Lilly agree to lower GLP-1 drug prices?
The Trump administration negotiated directly with manufacturers, likely offering expanded market access through Medicare and Medicaid coverage in exchange for price reductions. For drug companies, having 130+ million federal program beneficiaries as potential customers—even at lower prices—generates more revenue than maintaining high prices with limited coverage. The GENEROUS Model’s international reference pricing also creates pressure to negotiate before facing even steeper cuts.
Bottom Line: What This Means for Your Wallet
If you’re on Medicare or Medicaid and qualify for obesity treatment, you’re looking at potential savings of $10,200–$15,000 annually compared to paying full retail price. That’s life-changing money for retirees and low-income patients.
If you have private insurance, watch what happens during your 2026 open enrollment. Plans may add GLP-1 coverage, adjust premiums, or maintain status quo—but they can’t ignore federal programs offering $50 co-pays.
The pharmaceutical industry will push back. International reference pricing threatens their pricing model globally. Expect legal challenges and lobbying efforts to modify or reverse the GENEROUS Model.
But for now, the deal stands: $50 co-pays, federal coverage for obesity medications, and state Medicaid programs getting access to international pricing. Whether this survives long-term depends on political will, court challenges, and industry pressure.
What you can do today: Talk to your doctor about whether GLP-1 drugs are right for you, document your medical history, and monitor your insurance plan for coverage updates in early 2026.