Overall Vote Recommendation

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

HB 2677 would require the Health and Human Services Commission to provide Medicaid reimbursement for certain obesity treatment services and diabetes prevention program services. For obesity treatment, the bill would require reimbursement for intensive behavioral therapy, metabolic and bariatric surgery, and anti-obesity medications, subject to the medication’s inclusion in or provisional availability under the Medicaid vendor drug program. The bill defines obesity as a chronic disease diagnosed by a body mass index of 30 or greater and allows intensive behavioral therapy to be delivered in person, in community-based settings, or remotely through telehealth or telemedicine.

The bill would require the executive commissioner of HHSC to adopt medical necessity criteria for anti-obesity medications. Those criteria could not be more restrictive than the FDA-approved indications for the medications and would have to be based on obesity classes established by the Centers for Disease Control and Prevention. The bill also allows HHSC or a Medicaid managed care organization to use utilization management for obesity-related services only if medical necessity and appropriateness are determined in the same manner as for other Medicaid services.

The bill would separately require Medicaid reimbursement for diabetes prevention program services provided by a supplier included in the CDC’s National Registry of Recognized Diabetes Prevention Programs. Reimbursement would apply when the Medicaid recipient meets the program’s eligibility requirements and has not previously participated in the program while receiving Medicaid. The bill also allows implementation to be delayed if a federal waiver or authorization is needed and requires HHSC to notify Medicaid recipients in writing once obesity treatment options become available under the Medicaid program.

The Committee Substitute for HB 2677 keeps the same overall purpose as the originally filed bill: requiring Medicaid reimbursement for obesity treatment and diabetes prevention program services. Both versions add Sections 32.02461 and 32.02462 to the Human Resources Code, cover intensive behavioral or lifestyle treatment, metabolic and bariatric surgery, anti-obesity medication, and CDC-recognized diabetes prevention program services, and include the same federal-waiver delay language, recipient notice requirement, and effective-date provision.

The Committee Substitute makes several terminology and definitional changes. The filed bill used the term “intensive health behavioral and lifestyle treatment,” defined as an evidence-based, multi-component intervention supporting healthy weight management. The Committee Substitute replaces that with “intensive behavioral therapy” and expands the definition to specify that the intervention must be designed to support healthy weight management as recommended by current clinical standards of care and may be provided by a variety of qualified providers, including licensed dietitians. The Committee Substitute also adds a new definition of “obesity” as a chronic disease diagnosed as having a body mass index of 30 or greater.

The substitute also narrows the anti-obesity medication provision. The filed bill would have required reimbursement for anti-obesity medication without the added qualification found in the substitute. The Committee Substitute makes reimbursement for anti-obesity medication subject to the medication’s inclusion in or provisional availability under the vendor drug program. It also adds that HHSC’s medical-necessity criteria for those medications must be based on obesity classes established by the Centers for Disease Control and Prevention, while retaining the filed bill’s limitation that the criteria may not be more restrictive than FDA-approved indications.

For diabetes prevention program services, the Committee Substitute keeps the same basic reimbursement requirement for eligible Medicaid recipients who have not previously participated in the program while receiving Medicaid. The main change is that the substitute adds a utilization-management provision allowing HHSC or a Medicaid managed care organization to determine medical necessity for diabetes prevention program services only if the appropriateness and medical necessity determinations are made in the same manner as for other Medicaid services. In practical terms, the Committee Substitute is more detailed and administratively structured than the filed bill, but it preserves the core policy decision to require Medicaid reimbursement for these obesity and diabetes-prevention services.

Author (2)

Senfronia Thompson

John Bucy III

Co-Author (1)

Robert Guerra

Contact the Author

Rep. Senfronia Thompson

Capitol Phone:

(512) 463-0720

Capitol Office:

CAP 3S.6

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

According to the Legislative Budget Board (LBB), HB 2677 would have a negative impact of $277.2 million on General Revenue-related funds for the 2026–27 biennium. The estimated General Revenue-related cost is relatively small in fiscal year 2026, at $236,986, because HHSC assumes services would not begin until September 1, 2026, after policy revisions and rate hearings needed to create the new benefit. The annual General Revenue-related cost then rises to $276.96 million in fiscal year 2027, $281.85 million in fiscal year 2028, $283.54 million in fiscal year 2029, and $291.83 million in fiscal year 2030.

The primary cost driver is Medicaid coverage of anti-obesity medication. LBB assumes those medications would be made available on a non-risk basis beginning in fiscal year 2027 and later carved into managed care in fiscal year 2030. LBB estimates 71,819 medication utilizers in fiscal year 2027, increasing to 76,162 by fiscal year 2030, with an assumed average annual cost of $11,864 per utilizer through fiscal year 2029 and $12,225 in fiscal year 2030. After accounting for vendor drug rebates, LBB estimates the net prescription drug cost in fiscal year 2027 at $264.39 million from General Revenue and $658.18 million from All Funds.

The bill would also generate costs from three new client-service benefits: intensive behavioral therapy, metabolic and bariatric surgery, and diabetes prevention programs. For fiscal year 2027, LBB estimates 41,976 utilizers for intensive behavioral therapy at an average annual cost of $580, 154 utilizers for metabolic and bariatric surgery at $1,371, and 13,064 utilizers for diabetes prevention programs at $584. Together, those client services are estimated to cost $12.93 million from General Revenue and $32.19 million from All Funds in fiscal year 2027.

LBB also identifies implementation and technology costs. HHSC would require $1.59 million from All Funds in fiscal year 2026 to establish new provider types, including $236,986 from General Revenue, with ongoing system-update costs of $41,734 from All Funds in later fiscal years. Some costs would be partially offset by increased insurance premium tax revenue from managed care payments, including an estimated $281,684 to General Revenue and $93,894 to the Foundation School Fund in fiscal year 2027. LBB anticipates no significant fiscal implication to local governments.

Vote Recommendation Notes

Texas Policy Research recommends that lawmakers vote NO on HB 2677. The bill would expand the scope of Texas Medicaid by requiring reimbursement for additional obesity treatment and diabetes prevention services, including intensive behavioral therapy, metabolic and bariatric surgery, anti-obesity medication, and services provided through diabetes prevention program suppliers. Although the bill does not expand Medicaid eligibility, it expands what Medicaid must cover for existing recipients, which is still a meaningful growth in the size and scope of state government.

The primary limited-government concern is that the bill creates new statutory Medicaid reimbursement mandates. Once placed in statute, these benefits would become part of the state’s ongoing Medicaid structure rather than a temporary, capped, or discretionary initiative. The bill also gives the executive commissioner of the Health and Human Services Commission rulemaking authority to implement the new obesity-treatment benefit and establish medical necessity criteria for anti-obesity medications. That increases HHSC’s administrative responsibilities and discretion in an already large entitlement program.

The bill would also increase the burden on taxpayers. The LBB estimates that the Committee Substitute would have a negative impact of $277.2 million to General Revenue-related funds during the 2026–27 biennium. Annual General Revenue-related costs would rise from $276.96 million in fiscal year 2027 to $291.83 million in fiscal year 2030. The largest cost driver is anti-obesity medication coverage, which LBB estimates would cost $264.39 million from General Revenue in fiscal year 2027, even after accounting for vendor drug rebates.

The bill does not substantially increase the regulatory burden on private individuals in the ordinary sense; it does not impose a new mandate on citizens to obtain treatment or comply with a new licensing or permitting regime. However, it would increase administrative and compliance obligations within the Medicaid system. HHSC would have to establish new provider types, adopt rules, revise policies, conduct rate-related implementation work, and administer new reimbursement categories. Medicaid managed care organizations and participating providers would also be subject to new benefit rules, utilization-management standards, billing procedures, and medical-necessity determinations tied to the expanded services.

The bill moves health policy in the wrong direction by shifting more health-care costs onto taxpayers and expanding government’s role as payer. Obesity and diabetes are serious health concerns, but the bill responds by enlarging Medicaid rather than relying on private insurance, direct primary care, market competition, charitable care, individual responsibility, or narrower reforms aimed at lowering the cost of treatment. The fact that the benefit applies to existing Medicaid recipients does not remove the concern; expanding covered benefits still expands the entitlement program.

The Committee Substitute includes some administrative guardrails, including making anti-obesity medication reimbursement subject to inclusion or provisional availability under the vendor drug program and allowing utilization management under certain conditions. But those guardrails are not sufficient to address the bill’s broader fiscal and structural problems. The bill does not include a spending cap, sunset date, pilot-program structure, legislative reauthorization requirement, or strong evidence threshold showing that the new Medicaid spending would produce offsetting savings.

HB 2677 grows the size and scope of government, increases recurring taxpayer obligations, expands HHSC authority, and adds new administrative requirements to the Medicaid system.

Free Enterprise

The bill would expand Medicaid’s role as a payer for obesity treatment, anti-obesity medication, bariatric surgery, behavioral therapy, and diabetes prevention services. That can distort health-care markets by increasing government-directed demand, reimbursement rules, and dependence on Medicaid payment structures. It does not directly prohibit private enterprise or create a new occupational license, but it grows government’s role in health-care purchasing.

Property Rights

The bill does not materially affect land use, ownership, takings, asset control, or the use of private property. It does not authorize eminent domain, restrict property owners, or condition property rights on compliance with a new regulatory scheme. Its impact on private property rights is therefore neutral.

Personal Responsibility

The bill shifts more costs associated with obesity treatment and diabetes prevention from individuals, families, private insurance, employers, charities, or private providers onto taxpayers through Medicaid. While the services may encourage healthier behavior, the policy mechanism relies on government reimbursement rather than personal responsibility, private-sector solutions, or voluntary arrangements. This weakens the personal-responsibility principle.

Limited Government

This is the bill’s most significant liberty concern. The bill expands Medicaid benefits, creates new statutory reimbursement obligations, gives HHSC implementation and rulemaking responsibilities, and increases recurring taxpayer costs. The Legislative Budget Board estimates a negative General Revenue-related impact of about $277.2 million for the 2026–27 biennium, with costs continuing in later years. Because the bill expands an entitlement-style program without a spending cap, sunset, or pilot structure, it negatively affects the limited-government principle.

Individual Liberty

The bill does not directly restrict individual conduct, impose penalties, or require Medicaid recipients to obtain obesity treatment or diabetes prevention services. In that sense, the direct impact on individual liberty is limited. However, it expands taxpayer-funded medical benefits through Medicaid and places more health-care decisions inside a government-administered reimbursement system, which creates a modest negative liberty concern.

Related Legislation

SB 2729 (Same As)

View Bill Text and Status