Under a new cost-cutting proposal by Governor Gavin Newsom, California may soon eliminate Medi-Cal coverage for popular weight loss drugs Ozempic and Wegovy, sparking concern among healthcare advocates and low-income patients. The move, which aims to address a $12 billion state budget deficit, could take effect on January 1, 2026, and would save the state an estimated $85 million in 2025–26 and up to $680 million by 2028–29, according to Newsom's office.
Ozempic and Wegovy, both manufactured by Novo Nordisk, have surged in popularity due to their effectiveness in treating obesity a chronic health issue linked to diabetes, heart disease, and rising healthcare costs. However, the soaring costs of these prescriptions have significantly strained Medi-Cal, California’s healthcare program for low-income residents.
In 2023 alone, Medi-Cal spent roughly $733 million on these two drugs, excluding manufacturer rebates. Prescriptions skyrocketed from 15,000 to 181,000 for Wegovy and 178,000 to 480,000 for Ozempic within a year, according to data from the U.S. Centers for Medicare and Medicaid Services.
While the state stands to gain major financial relief, critics argue that cutting access to these drugs for Medi-Cal beneficiaries could have harmful long-term consequences. Liz Helms, president of the California Chronic Care Coalition, called it a “bad decision,” asking, “The people who are already taking this medication, what’s going to happen to them?”
Dr. Wayne Ho, an obesity specialist in Los Angeles, echoed this concern, warning that patients could regain weight and lose health improvements such as lower blood pressure and cholesterol. “This is the best tool I’ve had in practicing preventive medicine,” he said, pointing out that Medi-Cal patients already struggle to access obesity care and nutritious food.
Supporters of the proposal, like the California Association of Health Plans, argue that the high cost of the drugs warrants stricter usage guidelines and clinical oversight. They believe this move should lead to broader reevaluation of mandatory weight loss drug coverage in health plans.
Currently, Medi-Cal voluntarily covers Wegovy and Ozempic it is not required by federal law. Under the new plan, Ozempic would still be covered for its FDA-approved use in treating Type 2 diabetes, but not when prescribed for weight loss. Wegovy, which is solely for weight management, would no longer be reimbursed at all.
The proposal is part of a broader effort to reduce Medi-Cal overspending. Earlier in 2025, California had to backfill a $6.2 billion shortfall in the Medi-Cal budget to continue paying providers through June. Factors included increased enrollment, expanded coverage for undocumented immigrants, and an overall rise in prescription drug spending which climbed to $15.2 billion in FY 2023–24, up 10% from the prior year.
Medi-Cal currently serves nearly 15 million Californians, and eligibility is capped at $21,597 per year for individuals and $44,367 for a family of four. Both Ozempic and Wegovy contain the active ingredient semaglutide, a GLP-1 receptor agonist that regulates appetite and blood sugar. The drugs come in injectable form and are self-administered weekly. Medi-Cal already restricts Wegovy to one carton per 28 days to control costs.
While Governor Newsom did not directly mention the drug coverage cut during his recent budget presentation, he stressed the need to “tighten things up” in California’s largest public health program. The state legislature will now consider the proposal as part of ongoing budget negotiations.
If approved, this policy shift could significantly change obesity treatment access for California’s low-income residents, who may not be able to afford the $1,000+ monthly cost of weight loss drugs without insurance support. Advocacy groups are expected to push back as the plan makes its way through the legislative process.
