LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6985 NOTE PREPARED: Jan 3, 2025
BILL NUMBER: HB 1202 BILL AMENDED:
SUBJECT: Medicaid Coverage for Treatment of Obesity.
FIRST AUTHOR: Rep. Shackleford BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
DEDICATED
XFEDERAL
Summary of Legislation: This bill requires Medicaid coverage for the treatment of obesity, including
specified services and medication approved by the federal Food and Drug Administration. It also requires
written notice regarding the coverage to be provided annually to Medicaid recipients, providers, and
prescribers.
Effective Date: July 1, 2025.
Explanation of State Expenditures: Including coverage for the treatment of obesity, as prescribed in the
bill, as reimbursable under Medicaid will increase total state expenditures for the state Medicaid program
by an indeterminate, but likely significant amount. Any increases in state expenditures resulting from this
bill may be mitigated to the extent that the treatment reduces the need for future treatments or procedures
for Medicaid members.
The bill will increase workload for the Family and Social Services Administration to provide notices to
recipients, providers, and prescribers regarding coverage for the treatment of obesity. This should be able
to be implemented using existing staffing and resources.
Additional Information: Bariatric surgery is currently covered under the state Medicaid program (except for
members covered under a HIP Basic or HIP Plus benefit package), subject to prior approval when recognized
as medically necessary for the treatment of morbid obesity.
Currently, FDA-approved GLP-1 drugs are eligible for Medicaid reimbursement in Indiana to members under
the age of 21 through the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) program.
[Indiana Medicaid does not currently cover weight management medication to members age 21 or older.]
There are currently three FDA-approved GLP-1 drugs approved for weight management: Saxenda
(liraglutide), Wegovy (semaglutide), and Zepbound (tirzepatide). As of August 2024, 13 states cover GLP-1
medication for weight management. In these states, CY 20023 spending for GLP-1 drugs before rebates
reached more than $900 per prescription. [Rebate data for specific drugs is not publicly available.]
HB 1202 1 Indiana’s state Medicaid program currently covers FDA-approved GLP-1 drugs to treat diabetes. In FY 2024,
the average cost per claim for such drugs totaled $1,019 with an average cost per client of $3,659. It is
expected that costs will be similar if the drug is prescribed to individuals for weight management.
Medicaid: Medicaid and the Children's Health Insurance Program (CHIP) are jointly funded between the
state and federal governments. The state share of costs for most Medicaid medical services for FFY 2025
is 35%, 10% for the age 19 to 64 expansion population within the Healthy Indiana Plan (HIP), and 25% for
CHIP. The state share of administrative costs is 50%. The state share of most Medicaid and CHIP
expenditures is paid from General Fund appropriations, and state dedicated funds primarily cover HIP costs.
Explanation of State Revenues:
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Family and Social Services Administration.
Local Agencies Affected:
Information Sources: LSA view of FSSA Claims and Encounter Database;
IHCP Bulletin BT2023148: https://www.in.gov/medicaid/providers/files/bulletins/BT2023148.pdf;
IHCP Bulletin BT202240: https://provider.indianamedicaid.com/ihcp/Bulletins/BT202240.pdf;
https://www.in.gov/medicaid/providers/files/modules/surgical-services.pdf;
https://www.kff.org/medicaid/issue-brief/medicaid-coverage-of-and-spending-on-glp-1s.
Fiscal Analyst: Jason Barrett, 317-232-9809.
HB 1202 2