About 165 million Americans rely on employer-sponsored health insurance, and yet workers still may not get the coverage they want, particularly when it comes to drugs like Novo's weight-loss drug Wegovy Nordisk, and Ozempic, the diabetes drug.
About 1 in 3 employees seek more resources to combat obesity, according to a recent report by consulting firm Gallagher. Glucagon-like peptide 1 treatments, such as Wegovy and Ozempic, which mimic hormones produced in the gut to suppress a person's appetite, are considered revolutionary on this front.
These blockbuster weight-loss medications have skyrocketed in popularity in the U.S., but they are still not universally covered, even though “Americans today have higher rates of obesity and diabetes and more behavioral health problems than ever before.” “, according to Trilliant Health's “2024 Trends Shaping” report. “Health Economics” Report.
Cost is a key issue.
Although research shows that obesity drugs can have important health benefits beyond shedding unwanted pounds, organizations representing U.S. insurers have said concerns remain about the high price tag of covering those drugs, which It's almost $1,350 per month for a single patient.
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The price of GLP-1 drugs, along with the large number of workers who could potentially benefit from their use, are a large driver of higher health care costs, several studies show. Prescription drug costs already rose 8.6% last year, due in part to an increase in the use of GLP-1 drugs, according to a recent Mercer report.
“Is that significant? Yes,” said Sunit Patel, Mercer's chief U.S. healthcare actuary.
Patients taking these medications It is necessary to complete months, if not years, of continuous treatment.
“It becomes a lifelong medication,” said Gary Kushner, president of Kushner & Company, a benefits design and management firm. “That's a pretty expensive commitment.”
Cost is a key factor in coverage.
Currently, less than half (42%) of companies cover expensive weight loss medications to some extent. Another 27% are considering adding coverage over the next year, according to the Mercer survey.
Still, “not everyone who wants it can get it,” Patel said.
On the other hand, 3% of employers have recently eliminated coverage of these drugs and 10% of companies that currently cover them are considering eliminating them by 2025.
To improve access to weight-loss drugs, many companies would have to pay even more, and healthcare costs are already hitting a post-pandemic high, with employers and employees willing to shell out much more for coverage in 2025. , according to WTW. , a consulting firm formerly known as Willis Towers Watson. American employers project that their healthcare costs will increase 7.7% in 2025, compared to 6.9% in 2024 and 6.5% in 2023.
A Kaiser Family Foundation survey also found that one of employers' biggest concerns was how to cover increasingly in-demand weight loss medications.
“Employers face the challenge of integrating these potentially important treatments into their already expensive benefit plans,” said Gary Claxton, vice president of KFF in a press release.
Wegovy, Ozempic and Mounjaro weight loss medication packages.
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Access for weight loss use is a problem
For now, some employers cover only GLP-1 drugs exclusively for the treatment of diabetes, while others cover certain GLP-1 for weight loss, but only if they are approved by the Food and Drug Administration for that use, ruling out Ozempic. , which has just been approved by the FDA for the treatment of type 2 diabetes.
“Most employers cover Ozempic for diabetes, they don't necessarily cover it as an anti-obesity medication,” said Seth Friedman, Gallagher's pharmacy and health plans practice leader.
That makes it even more complicated for employees to determine whether they can access the medication and whether it will be covered by their insurance. “They see it's covered but they get turned away,” Friedman said.
A 2023 survey by the International Foundation for Employee Benefit Plans found that 76% of companies surveyed provided coverage for GLP-1 diabetes medications, compared to just 27% that provided coverage for weight loss, which left many workers excluded.
“Obviously, there's a demand for them, and it's not for diabetes, but for weight loss,” Kushner said.
“By 2025, about half of large employers will cover weight-loss medications,” said Beth Umland, director of health and benefits research at Mercer. However, “even when they do, there are safety barriers around who can use it.”
Demand for these treatments is expected to increase, but additional coverage checks are also helping to keep costs under control.
Almost all employers have some type of “utilization management” restriction, such as a prior authorization requirement, according to Gallagher's Friedman.
For some companies, that may mean workers should first try other weight loss methods or consult a dietitian and enroll in a weight loss management program. Others may require a threshold for 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 runs through early December.
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