Weight loss drugs are proving to be super popular among many workers with job-based health insurance. But GLP-1 medications are busting their employers’ budgets, leading some firms to rethink their coverage.
The share of very large firms covering these drugs for obesity soared to 43% this year, up from 28% last year, according to KFF’s latest annual Employer Health Benefits Survey, which was released on Wednesday. These employers, who have more than 5,000 workers, are much more likely than their smaller counterparts to offer such a benefit.
Among firms with between 200 and 999 staffers, only 16% provide coverage of drugs for weight loss this year, the same as last year, according to KFF, a nonpartisan health policy research group.
GLP-1 drugs, which treat diabetes, obesity and certain other conditions, have been in great demand since they came on the market a few years ago because they help patients shed pounds. While employers typically cover the medications for diabetes, fewer of them do so for weight loss, in part because of the drugs’ high prices — which have also limited Americans’ access to them. The list price of Wegovy, for instance, is about $1,350 for a month’s supply, though discounts are availabl
Employers, however, recognize that covering the medications for weight loss is a valuable benefit to attract and retain talented staffers. Notably, even among firms that don’t do so, nearly half said the benefit is “very important” or “important” for employee satisfaction. More than 36 million people with job-based insurance have a body mass index that would medically qualify them for a GLP-1 drug.
“Large employers know these new high-priced weight-loss drugs are an important benefit for their workers, but their costs often exceed their expectations,” Gary Claxton, KFF senior vice president, said in a statement. “It’s not a surprise that some are rethinking access to the drugs for weight loss.”
Costs are higher than forecast because more workers are taking advantage of the benefit, KFF found. Nearly 60% of large firms said usage of the medications for weight loss is higher than they predicted, while two-thirds of such employers said the impact on their prescription drug spending was “significant.”
One employer KFF surveyed found that it spent more on GLP-1 medications than any other drug this year, up from 32nd place last year.
A large retailer told KFF, “Before we knew it, we spent half a million dollars and we’re projected to go up to $1.2 million the following year.”
The high costs of GLP-1 drugs have long been a source of frustration for many Americans. President Donald Trump set off a kerfuffle last week when he said that the medications would soon be available for $150, prompting Mehmet Oz, the Centers for Medicare and Medicaid Services administrator, to step in and say negotiations are ongoing.
Many employers told KFF they were looking at reducing coverage of the drugs through steps such as limiting eligibility to those with higher body mass indexes or requiring workers to participate in weight management programs.
“You have to have a coach, and then you can only stay on it for a certain amount of time before you have to get reevaluated,” one large manufacturer told KFF.
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