Why Bariatric Surgery May Become More Cost-Effective in California

California is facing tough budget decisions, and one proposal under serious consideration would cut Medi-Cal coverage for weight-loss drugs like Ozempic and Wegovy. On the surface, this seems like a simple cost-saving move. But when you dig deeper, eliminating access to effective medical therapies may actually drive up costs in the long run — and push more people toward bariatric surgery as a more sustainable solution.

In this blog, we’ll walk through:

1. What’s happening in California’s coverage policies
2. The real health/economic risks of removing drug access
3. Why bariatric surgery might deliver better long-term value
4. What patients should know now

What’s Proposed: Cutting Drug Coverage in Medi-Cal

Governor Newsom’s 2026 budget proposal includes language to eliminate Medi-Cal coverage for GLP-1 and other anti-obesity medications starting January 1, 2026. These drugs, which had been covered since 2023, would no longer be funded for low-income Californians under the plan. The state estimates the savings would be $85 million in the first year and up to $680 million by 2028–29.

However, these figures don’t account for the health and financial costs of untreated obesity and related conditions — conditions that these medications often help prevent or mitigate.

The Hidden Costs of Cutting Coverage

Worsened Health Outcomes

When patients lose access to effective medications, many regain weight and slip back into comorbid conditions like diabetes, hypertension, fatty liver disease, or cardiovascular disease. The ripple effects include increased hospitalizations, surgical interventions, and complications that all cost more.

Increased Healthcare Spending Over Time

Research published in JAMA Network Open shows that even modest weight loss (5%) among those with obesity and comorbidities is associated with a $1,262 reduction in annual health costs (≈ 7% savings). Larger weight losses (25%) led to average savings of $5,442 per year (≈ 31%).

By contrast, cutting drug coverage may shift the burden back onto acute and chronic care costs, eroding those gains and potentially costing the system more overall.

Inequity & Access Issues

Low-income individuals stand to lose the most. For those on Medi-Cal, these medications are often their only accessible option for medical weight management. Losing coverage makes equitable care harder to achieve.

Why Bariatric Surgery May Be More Cost-Effective Long Term

Durable Results & Sustained Weight Loss

Bariatric surgery often delivers significant, sustained weight loss that many medications cannot match over years. Because the surgical changes are anatomical and metabolic, patients typically require fewer ongoing interventions.

Reduced Need for Lifelong Drug Therapy

While person on weight-loss drugs often continue them indefinitely, many bariatric patients can reduce or eliminate their dependence on medications for obesity-related conditions (diabetes, hypertension, etc.). This reduces long-term drug costs.

Comorbidity Remission & Prevention

Beyond weight loss, bariatric surgery has well-documented benefits: remission of type 2 diabetes, reduced cardiovascular risk, improved lipid profiles, and sleep apnea improvement. These translate to fewer complications, hospitalizations, and long-term healthcare spending.

Surgery Pays Off Within 5–10 Years

Weight-loss surgery may cost more up front, but many patients save money long term by avoiding years of expensive medications and health complications.

What Patients Should Know Now

• Talk to your provider: Don’t wait for policy changes; ask what your best options are given your individual health and coverage.
• Don’t assume the worst: Some patients may qualify for assistance, sliding-scale programs, or clinical trials that help bridge the gap.
• Consider timing: If surgery is optimal, early intervention tends to produce better outcomes.
• Monitor policy developments: This is a fluid debate in California — staying informed can help you advocate for your health.

FAQs

Will insurance stop covering all weight-loss drugs?‍

Under the proposed change, Medi-Cal would drop coverage for drugs used solely for weight loss. Drugs prescribed for diabetes (e.g. GLP-1 therapies used for blood sugar control) would remain covered.

Will bariatric surgery always be cheaper long term?‍

Not always. It depends on your starting health, comorbidities, how well you maintain outcomes, and the costs you’d otherwise incur. But in many moderate-to-high-risk patients, it becomes cost-effective over time.

What if I’m already benefiting from weight-loss drugs?\

That’s exactly why coverage continuity matters. Losing access may reverse your gains and increase risk — talk with your physician about backup plans or transitions.

Conclusion

California’s proposal to cut Medi-Cal coverage for weight-loss drugs is short-term thinking applied to a chronic health issue. While the upfront savings may look appealing, the long-term costs — in health, equity, and economics — are likely to grow. Bariatric surgery may not be appropriate for everyone, but for many, it stands as a robust, sustainable alternative that can reduce total health burdens over time.

At BASS Medical Group Bariatric Surgery & Weight Management, we are ready to help those exploring their options. If you're concerned about the proposed changes and want to understand your path forward, request a consultation with us today.