Weight loss medication are proving to be tremendous fashionable amongst many workers with job-based medical health insurance. But GLP-1 drugs are busting their employers’ budgets, main some companies to rethink their protection.
The share of very giant companies protecting these medication for weight problems soared to 43% this 12 months, up from 28% final 12 months, in response to KFF’s newest annual Employer Health Benefits Survey, which was launched on Wednesday. These employers, who’ve more than 5,000 workers, are a lot more doubtless than their smaller counterparts to supply such a profit.
Among companies with between 200 and 999 staffers, solely 16% present protection of medicine for weight loss this 12 months, the identical as final 12 months, in response to KFF, a nonpartisan well being coverage analysis group.
GLP-1 medication, which deal with diabetes, weight problems and sure different situations, have been in nice demand since they got here available on the market a few years in the past as a result of they assist sufferers shed kilos. While employers sometimes cowl the drugs for diabetes, fewer of them accomplish that for weight loss, partly due to the medication’ excessive costs — which have additionally limited Americans’ access to them. The record worth of Wegovy, as an example, is about $1,350 for a month’s provide, although reductions are out there.
Employers, nonetheless, acknowledge that protecting the drugs for weight loss is a precious profit to draw and retain proficient staffers. Notably, even amongst companies that don’t accomplish that, almost half mentioned the profit is “very important” or “important” for worker satisfaction. More than 36 million folks with job-based insurance coverage have a physique mass index that may 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 vp, mentioned in a assertion. “It’s not a surprise that some are rethinking access to the drugs for weight loss.”
Costs are increased than forecast as a result of more workers are profiting from the profit, KFF discovered. Nearly 60% of huge companies mentioned utilization of the drugs for weight loss is increased than they predicted, whereas two-thirds of such employers mentioned the affect on their prescription drug spending was “significant.”
One employer KFF surveyed discovered that it spent more on GLP-1 drugs than another drug this 12 months, up from 32nd place final 12 months.
A big retailer advised 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 excessive prices of GLP-1 medication have lengthy been a supply of frustration for a lot of Americans. President Donald Trump set off a kerfuffle final week when he mentioned that the medications would quickly be out there for $150, prompting Mehmet Oz, the Centers for Medicare and Medicaid Services administrator, to step in and say negotiations are ongoing.
Many employers advised KFF they have been taking a look at decreasing protection of the medication by means of steps comparable to limiting eligibility to these with increased physique mass indexes or requiring workers to take part in weight administration applications.
“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 giant producer advised KFF.
Other companies advised KFF they’ve determined to drop the profit for weight loss.
However, employers will doubtless must rethink their protection once more in coming years, particularly as more workers demand protection, and the medication are authorized for even more medical situations. Plus, costs coming down.
“We’re still writing the story of what GLP-1 coverage looks like in employer plans,” mentioned Matthew Rae, affiliate director of the Program on the Health Care Marketplace at KFF.
GLP-1 drug prices – and prescription drug costs normally – are additionally contributing to a rise in premiums.
Annual insurance coverage protection for a household hit $27,000, on common, this 12 months, up 6% from 2024, in response to KFF’s survey. Workers contribute $6,850 towards the price, on common, whereas employers decide up the remainder of the tab.
Meanwhile, particular person protection topped $9,300, on common, this 12 months, up 5% – with staff shouldering $1,440 of the price and employers paying the remainder.
Over the previous 5 years, the expansion in premiums has been largely in keeping with inflation and wage will increase.
But coverage for 2026 could possibly be a lot pricier, in response to a number of advantages consulting companies. KFF additionally factors to GLP-1 drugs, hospital costs and tariffs as components that would push up premiums and out-of-pocket prices for workers subsequent 12 months.
“There is a quiet alarm bell going off,” Drew Altman, KFF’s CEO, mentioned in a assertion. “Employers have nothing new in their arsenal that can address most of the drivers of their cost increases, and that could well result in an increase in deductibles and other forms of employee cost sharing again, a strategy that neither employers nor employees like but companies resort to in a pinch to hold down premium increases.”