About 165 million Americans rely on employer-sponsored health insurance, yet workers may not get the coverage they want — especially when it comes to drugs like Novo Nordisk's weight-loss drug Wegovy and diabetes drug Ozempic.
About 1 in 3 employees are looking for more resources to combat obesity, according to a recent report from consulting firm Gallagher. Glucagon-like peptide-1 therapies, such as Wegovy and Ozempic, which mimic hormones produced in the intestines to suppress a person's appetite, are game-changers on this front.
The popularity of these blockbuster weight-loss drugs has skyrocketed in the U.S., but they remain under-covered globally — even though “Americans have higher rates of obesity, diabetes, and other behavioral health conditions today than ever before,” according to the 2024 Trends Shaping report. Published by Trilliant Health. Health economics report.
Cost is a major issue.
Although research shows that obesity drugs may have significant health benefits beyond shedding unwanted weight, organizations representing U.S. insurance companies said concerns remain about the high price involved in covering these drugs, which amounts to about $1,350 per month for one patient.
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Several studies suggest that the price of GLP-1 drugs, coupled with the large number of workers who could benefit from their use, is a large driver of rising health care costs. Indeed, prescription drug costs jumped 8.6% last year, partly due to an increase in the use of GLP-1 drugs, according to a recent report from Mercer.
“Does this matter? Yes,” said Suneet Patel, chief US health expert at Mercer.
Patients taking these medications need to complete months, if not years, of continuous treatment.
“It has become a lifelong drug,” said Gary Kushner, president and president of Kushner & Company, a benefits design and management firm. “This is a very expensive commitment.”
Cost is a major factor in coverage
Currently, less than half of companies — 42% — cover fairly expensive weight-loss medications. Another 27% are considering adding coverage in the next year, according to the Mercer survey.
However, Patel said, “Not everyone who wants it can get it.”
On the other hand, 3% of employers have recently eliminated coverage for these drugs, and 10% of companies that currently cover them are considering removing them by 2025.
To improve access to weight-loss drugs, many companies will have to pay more — and health care costs have already reached post-pandemic highs, with employers and employees set to spend significantly more for coverage in 2025, according to WTW. , a consulting firm formerly known as Willis Towers Watson. US employers expect health care costs to rise by 7.7% in 2025, compared to 6.9% in 2024 and 6.5% in 2023.
Among employers' biggest concerns is how to cover increasingly sought-after weight-loss medications, a Kaiser Family Foundation survey found.
“Employers face the challenge of integrating these important treatments into already expensive benefit plans,” Gary Claxton, vice president of KFF, said in a press release.
Packages of weight loss medications Wegovy, Ozempic and Mounjaro.
Image Alliance | Getty Images
Access to weight loss use is a problem
Currently, some employers only cover GLP-1 drugs exclusively to treat diabetes, while others cover some GLP-1 weight loss drugs but only if they are approved by the Food and Drug Administration for that use — excluding Ozempic, which has been approved It is approved by the US Food and Drug Administration (FDA) only to treat type 2 diabetes.
“Most employers cover Ozempic for diabetes, and they don't necessarily cover it as an anti-obesity drug,” said Seth Friedman, Gallagher's pharmacy and health plans practice leader.
This makes it more difficult for employees to know if they can get the medication and if it will be covered by their insurance. “They see it's covered but they're denied,” Friedman said.
A 2023 survey by the International Foundation for Employee Benefit Plans found that 76% of companies surveyed offered coverage for GLP-1 diabetes medications, versus only 27% that offered coverage for weight loss — alienating many workers.
“There's clearly a demand for it, and it's not for diabetes, it's for weight loss,” Kushner said.
“Looking to 2025, about half of large employers will cover the costs of weight-loss medications,” said Beth Umland, director of health and benefits research at Mercer. However, “even when they do, there are barriers around who can use it.”
Demand for these treatments is expected to increase, but additional controls on coverage will also help control costs.
Almost all employers have some type of “utilization management” restriction, such as a prior authorization requirement, according to Gallagher's Friedman.
For some companies, this may mean that workers must try other weight-loss methods first or meet with a dietitian and enroll in a weight-loss management program. Others may need a minimum body mass index, or BMI, of at least 30, depending on how the plan is set up, Friedman said.
This information is available during open enrollment, which typically lasts until early December.
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