About 165 million Americans depend on employer-sponsored medical insurance, and yet employees should still not get the coverage they need — particularly relating to drugs comparable to Novo Nordisk’s weight-loss drug Wegovy and diabetes drug Ozempic.
About 1 in 3 employees are searching for more resources to combat obesity, based on a recent report by consulting firm Gallagher. Glucagon-like peptide-1 treatments comparable to Wegovy and Ozempic, which mimic hormones produced within the gut to suppress an individual’s appetite, are considered game changers on this front.
These blockbuster weight-loss drugs have skyrocketed in popularity within the U.S. but are still not universally covered — despite the fact that “Americans have higher rates of obesity and diabetes and more behavioral health conditions today than ever before,” based on Trilliant Health’s “2024 Trends Shaping the Health Economy” report.
Cost is a key issue.
Although research shows that obesity drugs could have significant health advantages beyond shedding unwanted kilos, organizations representing U.S. insurers have said concerns remain concerning the high price involved in covering those medications, that are nearly $1,350 per 30 days for a single patient.
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The value tag for GLP-1 medications, together with the big variety of employees who could potentially profit from using them, are a giant driver of upper health-care costs, several studies show. Already, prescription drug costs jumped 8.6% last 12 months, due partially to a surge in using GLP-1 drugs, based on a recent report by Mercer.
“Is that significant? Yes,” said Sunit Patel, Mercer’s U.S. chief health actuary.
Patients on these medications need to finish months, if not years, of continuous treatment.
“It becomes a lifelong drug,” said Gary Kushner, chair and president of Kushner & Company, a advantages design and management company. “That is a reasonably expensive commitment.”
Cost is a key consider coverage
Currently, fewer than half — 42% — of corporations cover the expensive weight-loss drugs to some extent. One other 27% are considering adding coverage within the 12 months ahead, based on the survey by Mercer.
Still, “not everyone who wants it could actually get it,” Patel said.
On the flip side, 3% of employers have recently removed coverage for these drugs and 10% of corporations that currently cover them are considering removing them for 2025.
To enhance access to weight-loss drugs, many businesses would need to pay much more — and health-care costs are already reaching a post-pandemic high, with employers and employees set to shell out significantly more for coverage in 2025, based on WTW, a consulting firm formerly often known as Willis Towers Watson. U.S. employers project their health-care costs will increase by 7.7% in 2025, compared with 6.9% in 2024 and 6.5% in 2023.
Amongst employers’ biggest concerns was find out how to cover increasingly sought-after weight reduction drugs, a Kaiser Family Foundation survey also found.
“Employers face the challenge of integrating these potentially necessary treatments into their already costly profit plans,” Gary Claxton, KFF’s vice chairman said in a press statement.
Packages of weight reduction drugs Wegovy, Ozempic and Mounjaro.
Picture Alliance | Getty Images
Access for weight-loss use is a difficulty
For now, some employers cover only GLP-1 drugs exclusively for the treatment of diabetes, while others cover certain GLP-1s for weight reduction but only in the event that they are approved by the Food and Drug Administration for that use — ruling out Ozempic, which is just FDA-approved for the treatment of Type 2 diabetes.
“Most employers cover Ozempic for diabetes, they do not necessarily cover it as an anti-obesity medication,” said Seth Friedman, pharmacy and health plans practice leader at Gallagher.
That makes it even trickier for workers to navigate whether or not they can get access to the drug and if it’s going to be covered by their insurance. “They see that it’s covered but they get rejected,” Friedman said.
A 2023 survey by the International Foundation of Worker Profit Plans found that 76% of the businesses polled provided GLP-1 drug coverage for diabetes, versus only 27% that provided coverage for weight reduction — leaving many employees shut out.
“Obviously, there may be demand for them, and it isn’t for diabetes, it’s for weight reduction,” said Kushner.
“Waiting for 2025, about half of huge employers will cover the drugs for weight reduction,” said Beth Umland, Mercer’s research director of health and advantages. Nonetheless, “even after they do, there are guardrails around who can use it.”
Demand for these treatments is only expected to extend — however the added controls for coverage are also helping to maintain costs in check.
Nearly all employers have some type of “utilization management” restrictions in place, comparable to a previous authorization requirement, based on Gallagher’s Friedman.
For some corporations, which will mean employees must try other weight-loss methods first or meet with a dietitian and enroll in a weight-loss management program. Others may require a threshold for body mass index, or BMI, of at the very least 30, depending on how the plan is about up, Friedman said.
This information is accessible during open enrollment, which usually runs through early December.
