California Governor Gavin Newsom has proposed eliminating Medi-Cal coverage for popular weight-loss drugs Ozempic and Wegovy as part of efforts to control spiraling healthcare costs in the state’s public health insurance program. The proposal, announced on Wednesday, aims to address significant budget overruns, potentially saving California an estimated $85 million in the 2025-26 fiscal year, and up to $680 million by 2028-29.
Under Newsom’s proposed budget, coverage for these medications would cease on January 1, 2026. Medi-Cal, California’s insurance program providing healthcare to low-income residents, has seen drug costs rise sharply, driven significantly by these obesity treatments. Currently, prescriptions for these medications cost over $1,000 per month, making them unaffordable for many Medi-Cal patients without coverage.
The governor’s plan is set against the backdrop of a looming $12 billion state budget deficit, requiring significant fiscal adjustments. Medi-Cal spent approximately $733 million on Ozempic and Wegovy in 2023 alone, as prescriptions for these drugs surged dramatically. Wegovy prescriptions jumped from 15,000 in 2022 to 181,000 in 2023, while Ozempic prescriptions increased from 178,000 to 480,000 during the same period, according to data from the U.S. Centers for Medicaid and Medicare Services.
While state officials highlight the financial necessity of the measure, healthcare providers and patient advocates have raised concerns. Liz Helms, president of the California Chronic Care Coalition, criticized the proposal, stating, "This is a bad decision. The people who are already taking this medication, what’s going to happen to them?"
Other healthcare professionals echoed these concerns, fearing that the withdrawal of coverage could reverse the health improvements patients have experienced, including reduced blood pressure and cholesterol levels.
On the other side, the California Association of Health Plans supported the governor’s stance, suggesting the legislature reconsider mandates for covering such expensive treatments without sufficient clinical safeguards. According to the association, this move sends a clear message on the need for cost control in state-funded health coverage.
The proposal specifically targets weight-loss prescriptions while maintaining Medi-Cal coverage for Ozempic when prescribed for Type 2 diabetes. Both Ozempic and Wegovy are manufactured by Novo Nordisk, with semaglutide as their active ingredient, which mimics the GLP-1 hormone to regulate appetite and blood sugar levels.
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