As employers, you know all too well that health insurance costs continue to rise year after year. I’ve written in the past about some of the factors impacting healthcare costs, but recently there is a new culprit – GLP-1 drugs like Ozempic and Wegovy.
While GLP-1 (glucagon-like peptide-1) drugs offer benefits to certain patients taking them, they are negatively impacting the costs of group health plans across the country. Due to their high cost and increasing demand, these medications are putting additional pressure on health insurance costs which have been challenging employers for years.
As I sit in claim review meetings with my clients, these medications are now consistently in the top 10 most prescribed drugs. They were virtually nonexistent just a few years ago and their rapid rise in popularity is creating an incremental financial burden on employer sponsored healthcare plans.
Although these medications have proven beneficial in managing diabetes and obesity, they come with a high price tag paid for by your health insurance plan. They help regulate blood sugar levels by stimulating insulin secretion and slowing gastric emptying, reducing post-meal glucose spikes. Additionally, GLP-1 drugs promote weight loss by decreasing appetite and enhancing satiety.
Some argue that the long-term benefits, such as reduced diabetes complications and cardiovascular risks, could offset costs by lowering hospitalizations and other medical interventions. However, research into this topic is new and still inconclusive. Although these medications are beneficial, their expense poses challenges for insurers, often resulting in stricter coverage criteria, such as requiring prior authorization or proof of medical necessity. This leaves employers stuck trying to navigate an increasingly complex system.
As employers negotiate their health insurance renewals in 2025, be aware that premiums now have additional financial pressure from a new source – GLP-1 drugs. Our firm has developed strategies to curb these cost increases that result in a more robust benefit for employees and a more cost-effective strategy for employers. To learn more about these strategies please contact me at rkirtley@safegardgroup.com.
