Insurers and self-funded employers are making significant changes to their GLP-1 drug coverage policies in 2025, reflecting the financial and operational challenges posed by the high-cost medications.
Among U.S. adults, 80% say insurers should cover weight loss drugs for adults diagnosed as overweight or obese, according to an August 2023 survey from KFF. Half of respondents also said insurance should cover the drugs even if it would increase premium costs. Over 42% of U.S. adults (57.4 million) under 65 with private insurance could be eligible for GLP-1 drugs, based on current FDA indications, according to a Sept. analysis from KFF.
According to a Mercer survey of more than 2,000 employers in 2024, 44% with 500 or more employees offer GLP-1 coverage for obesity. Among employers with 20,000 or more employees, 64% offer coverage.
"The demand for these drugs is incredible, with sequential double-digit growth quarter over quarter. I can't recall another drug category with that level of action," Chronis Manolis, chief pharmacy officer at UPMC Health Plan, told Becker's in September. "For weight loss drugs, most plans don't cover them. The explosion in cost and demand has led stakeholders to push for more management — more prior authorizations — because the costs are unsustainable."
Effective Jan. 1, 2025:
- Oakland, Calif.-based Kaiser Permanente will drop base coverage for GLP-1s for commercial and ACA members in California when those drugs are prescribed solely for the purpose of weight loss for patients with BMI less than 40.
- Independence Blue Cross will stop covering weight loss drugs unless prescribed for conditions such as type 2 diabetes or cardiovascular disease. Members using these drugs solely for weight loss will need to pay out-of-pocket after the policy change.
- BCBS Michigan said it will no longer cover GLP-1 drugs to treat obesity. The change will affect nearly 10,000 members in fully insured, large group commercial plans.
- Minneapolis-based Allina Health will no longer cover GLP-1s prescribed for weight loss under its employee health plans.
- Point32Health is implementing new formularies in Maine and Rhode Island for small group and individual markets starting in 2025, resulting in the removal of coverage for some weight loss drugs and stricter prior authorization requirements for medications like Ozempic and Mounjaro.
- MassHealth is transitioning coverage for anti-obesity drugs, designating Zepbound as the preferred option starting in January 2025, with Wegovy and Saxenda being discontinued for most adult members.
- The BCBS Federal Employee Program standard and basic plans will reduce coverage for GLP-1 drugs such as Wegovy, with some medications moved to excluded or non-covered formulary tiers due to rising costs.
The 2025 policy updates follow a series of coverage restrictions implemented by major health systems and insurers in 2024. West Orange, N.J.-based RWJBarnabas Health ended coverage for GLP-1s prescribed for weight loss, citing adherence concerns. Minneapolis-based Fairview Health Services limited coverage of Wegovy and Saxenda to employees with a BMI of 40 or higher, anticipating $10 million in annual costs without the restriction. Rochester, Minn.-based Mayo Clinic imposed a lifetime limit of $20,000 for weight loss drugs under its employee health plan, while St. Louis-based Ascension dropped coverage entirely for its 139,000 employees in July 2023, citing cost-effectiveness and safety concerns.
The financial strain caused by GLP-1 drugs has been evident in insurers' financial reports throughout the year. Pittsburgh-based UPMC reported an operating loss of $371 million for the nine months ended Sept. 30, 2024. The loss was largely due to UPMC Health Plan's increased medical use and rising pharmacy costs, which include expenses for GLP-1 drugs.
Pittsburgh-based Highmark Health, which operates BCBS affiliates in four states, noted in its third quarter financial report that its health plans continue to face "high prescription drug costs, particularly GLP-1s, and BCBS Massachusetts reported a $114 million operating loss in the first nine months of 2024, partly due to a 250% increase in claims for GLP-1s.