Employers Cut Off Access to Weight-Loss Drugs for Workers
So many people have turned to drugs used for weight loss that some employers are cutting off insurance coverage to head off climbing bills. Spending on the popular drugs, which belong to the class including Ozempic and can cost as much as $1,350 a month for a patient, has quickly leapt into the tens of millions of dollars for insurance plans. The outlays are straining the finances of some plans, including those funded by employers.
After its costs for the drugs more than tripled over the past 18 months to about $5 million a month, the University of Texas System said it would end insurance coverage of Novo Nordisk’s Wegovy and Saxenda for its employees and others covered by its health plans effective Sept. 1.
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The rising popularity of the drugs is confounding companies. They may want to help employees who are severely overweight and can have related medical conditions that add to health-insurance costs, but are worried about adding a costly new expense. The University of Texas System health plan said it isn’t seeing any of the expected reduction in costs for other health conditions that weight loss could avert. “These savings are not being realized due to the excessive cost the drug manufacturer charges for the weight-loss medication,” the benefits newsletter said.
The reimbursement changes affect coverage of drugs prescribed for weight loss, not for treatment of diabetes, for which some are also used. The drugs belong to a class of medicines that work by mimicking a gut hormone called GLP-1. Ascension Healthcare, which operates nonprofit and Catholic hospitals and other health facilities in several states primarily in the Midwest and the South, stopped covering anti-obesity drugs including Wegovy and Saxenda for its health plan members July 1. The exclusion also applies to older weight-loss drugs such as phentermine.
The coverage cutbacks could stall or reverse progress that employees and doctors made in recent years gaining health-insurance reimbursement of prescriptions for weight loss. More health plans had been agreeing to pay for the drugs as research emerged indicating obesity was a disease, rather than a lifestyle choice. Some employers have continued to cover the drugs, but have taken steps to try to curb costs. The University of Michigan earlier this year increased the monthly copay for Wegovy and Saxenda to $45 from $20. The move was designed to encourage health plan members to first try other, less expensive options. The copay for phentermine tablets, for instance, is only $10 a month.
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