Approximately 165 million Americans rely on employer-sponsored health insurance, and yet workers may still not be getting the coverage they want — especially when it comes to medications like Novo Nordisk's weight-loss drug Wegovy and diabetes drug Ozempic.
About one in three workers are looking for more resources to combat obesity, according to a recent report from 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 groundbreaking in this regard.
These blockbuster weight-loss drugs are growing in popularity in the U.S. but still aren't widely covered — even though “Americans today have higher rates of obesity and diabetes and more behavioral health problems than ever before,” says 2024 Trends Shaping ” from Trilliant Health “Health Economics” report.
Costs are a key issue.
Although research shows that obesity medications can have significant health benefits beyond shedding unwanted pounds, organizations representing U.S. insurers have raised concerns about the high cost of reimbursement for these medications, which is nearly as high as for a single patient $1,350 per month.
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Several studies show that the price of GLP-1 drugs, as well as the large number of workers who could potentially benefit from their use, are a major factor in higher healthcare costs. According to a recent report from Mercer, prescription drug costs have already risen 8.6% in the past year, driven in part by an increase in the use of GLP-1 drugs.
“Does that matter? Yes,” said Sunit Patel, Mercer’s chief U.S. actuary.
Patients taking these medications You will need to complete months, if not years, of continuous treatment.
“It becomes a lifelong medication,” said Gary Kushner, chairman and president of Kushner & Company, a benefits design and administration firm. “It’s a pretty expensive commitment.”
Cost is a crucial factor in coverage
Currently, less than half – 42% – of companies provide some level of coverage for expensive weight-loss medications. According to Mercer's survey, another 27% are considering expanding insurance coverage in the coming year.
Still, “not everyone who wants it can get it,” Patel said.
On the other hand, 3% of employers have recently removed coverage for these drugs, and 10% of companies that currently cover them are considering eliminating them in 2025.
To improve access to weight-loss medications, many companies would have to pay even more — and healthcare costs are already reaching post-pandemic peaks, with employers and employees having to spend significantly more on coverage in 2025, according to WTW, a consulting firm, earlier was known as Willis Towers Watson. U.S. employers expect their healthcare costs to rise 7.7% in 2025, compared to 6.9% in 2024 and 6.5% in 2023.
According to a Kaiser Family Foundation survey, one of employers' top concerns was how to cover increasingly popular weight-loss medications.
“Employers face the challenge of integrating these potentially important treatments into their already costly benefit plans,” KFF Vice President Gary Claxton said in a news release.
Packages of weight loss drugs Wegovy, Ozempic and Mounjaro.
Picture Alliance | Getty Images
Access to weight loss is a problem
Currently, some employers only cover GLP-1 drugs exclusively for the treatment of diabetes, while others only cover certain GLP-1 drugs for weight loss if they are approved by the Food and Drug Administration for that purpose – which just excludes Ozempic from that FDA approved for the treatment of type 2 diabetes.
“Most employers cover Ozempic for diabetes, not necessarily as an obesity drug,” said Seth Friedman, practice leader for pharmacy and health insurance at Gallagher.
This makes it even more difficult for employees to find out whether they have access to the drug and whether it is covered by their insurance. “They see it’s covered, but they get rejected,” Friedman said.
A 2023 survey by the International Foundation of Employee Benefit Plans found that 76% of companies surveyed offered GLP-1 drug insurance for diabetes, while only 27% offered weight loss insurance – discouraging many workers.
“Obviously there is a demand for them, not for diabetes, but for weight loss,” Kushner said.
“Looking forward to 2025, about half of large employers will cover the cost of weight loss medications,” said Beth Umland, research director for health and benefits at Mercer. But “even if they do, there are guardrails around who can use it.”
Demand for these treatments is expected to continue to rise – but the additional controls on coverage will also help keep costs under control.
According to Gallagher's Friedman, almost all employers have some form of “usage management” restrictions, such as prior authorization requirements.
For some companies, this may mean that employees must first try other weight loss methods or meet with a nutritionist and enroll in a weight loss program. Others may require a body mass index (BMI) threshold of at least 30, depending on how the plan is structured, Friedman said.
This information is available during open enrollment, which typically runs through early December.
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