Weight-Loss Drug Coverage Obligations: A Litigation and Regulatory Update

As pharmaceutical weight-loss therapies have surged in popularity, health plans, regulators, and courts have found themselves grappling with a set of increasingly pressing and complex questions: who must cover these drugs, under what circumstances, and for whom?

While litigation on the topic is ongoing, federal and appellate courts have so far turned a skeptical eye on disability discrimination claims brought under Section 1557 of the Affordable Care Act (ACA) by health plan members challenging coverage exclusions for obesity-specific drug therapies. On the regulatory front, the Trump Administration has signaled a preference for negotiating lower drug prices directly with manufacturers rather than mandating expanded insurer coverage, as evidenced by its rejection of a Biden-era proposed rule and the launch of several new voluntary and mandatory pricing models under the Centers for Medicare and Medicaid Services (CMS).

Together, these developments suggest that, at least for the near term, health plans are unlikely to face new judicially or federally imposed coverage requirements, though the legal and regulatory environment remains fluid and warrants continued close monitoring.

Litigation Update: Courts Unconvinced in Disability Discrimination Cases

In recent years, more health plan members have expressed interest in accessing medications used to facilitate weight loss, prompting more questions about the extent to which plans are required, under the Employee Retirement Income Security Act (ERISA) and other applicable federal and/or state laws, to cover drugs used for that purpose. According to the results of a KFF Health Tracking Poll published in November 2025, approximately 12% of Americans are currently taking medication to lose weight or address chronic conditions — and about half of all surveyed users (56%) expressed affordability challenges.

Plans have historically covered the provision of GLP-1s when indicated for the treatment of certain medical conditions (e.g., diabetes, cardiovascular disease) that often appear as comorbidities to obesity. However, coverage for these drug products when indicated to treat obesity, or when used to facilitate weight loss, is often limited or explicitly excluded in plan documents, irrespective of whether the insurer categorizes those medications as medically necessary drugs on its formulary.

Recently, plaintiffs in separate class action lawsuits have unsuccessfully challenged these exceptions, alleging that plan restrictions on the use of certain medications for weight loss (and, specifically, the treatment of obesity) constitute disability discrimination under Section 1557 of the ACA, 42 U.S.C. § 18116. However, the courts have so far been unconvinced of these claims, consistently determining across multiple cases and appeals that a health plan’s decision not to cover drugs intended to treat obesity does not necessarily constitute discrimination against those experiencing obesity. The question of whether obesity can legally be considered a disability and, if so, what standard plaintiffs must meet to assert that their obesity qualifies as a disability, has not yet been clarified by the courts.

While these dismissals are a positive sign for health plans and appear to indicate that this issue will not be escalated to the U.S. Supreme Court anytime soon, organizations should continue to follow relevant litigation for meaningful case law developments.

Regulatory Update: Trump Administration Focuses on Manufacturer Negotiations, Not Payor Coverage

On the regulatory side, the federal government currently appears averse to requiring insurers to expand coverage of drugs used to treat obesity within ACA plans or public health (e.g., Medicare or Medicaid) plans. In April 2025, the Trump Administration shared in the 2026 Medicare Part D Final Rule that it would not be implementing recommendations from a Biden-era proposed rule, which would have permitted coverage of these medications for Medicare and Medicaid plan members diagnosed with obesity. The federal government did not provide significant context for the decision, only remarking through a CMS spokesperson that the proposal was “not appropriate at this time.”

The Trump Administration has expressed more interest in lowering prices through direct negotiation with pharmaceutical manufacturers. In December 2025, CMS announced the launch of the voluntary “Better Approaches to Lifestyle and Nutrition for Comprehensive Health” (BALANCE) model, which seeks to reduce prices and standardize coverage terms by directing CMS to negotiate prices on behalf of participating state Medicaid agencies and Part D plans. Notably, both manufacturers and payor entities would need to opt into the program. CMS is currently accepting participant applications, with coverage for obesity medications under BALANCE available through Medicaid plans as early as May 2026 and Part D plans in January 2027. Because of the delayed start with Medicare D plans, CMS is offering a short-term “Medicare GLP-1 Bridge” that will begin in July 2026 and allow eligible Part D beneficiaries early access to GLP-1 drugs indicated for obesity until the BALANCE model is implemented for this patient demographic. According to the agency, testing on the new model will conclude in December 2031. 

While the BALANCE’s actual efficacy remains to be seen, its premise may be appealing to state Medicaid plans, many of which have found the costs associated with drugs intended to facilitate weight loss intimidating. According to a recent KFF analysis, four states eliminated coverage for such drugs at the end of 2025, leaving only 13 states with active coverage for pharmaceutical weight-loss therapies — and several states are reportedly mulling coverage restrictions for fiscal years 2026 and 2027.

As we have written previously, CMS also published two proposed rules introducing the Global Benchmark for Efficient Drug Pricing (models, both of which incorporate international price benchmarks into Medicare drug rebate calculation methodologies. As currently proposed, these models would apply to Medicare Part B drugs (GLOBE) and Part D drugs (GUARD) and require mandatory manufacturer participation. Both would apply to approximately 25% of Medicare beneficiaries in selected geographic areas during six-to-seven-year trial periods if enacted; however, GLOBE and GUARD are likely to face legal challenges under the Administrative Procedure Act (APA).

Implications and Next Steps for Health Plans

For now, it appears that, despite the uptick in member interest (and litigation) regarding access for medications intended to facilitate weight loss, the courts and federal government are unlikely to impose new coverage requirements on health plans. We strongly recommend that organizations remain tuned in to relevant litigation and pay close attention to any further communications from CMS regarding BALANCE, GLOBE, and GUARD. Organizations with specific questions or concerns should consider reaching out to any member of this alert’s author team or to their preferred Crowell & Moring lawyer.