In the realm of employee health benefits, GLP-1s often dominate headlines, and for good reason. These medications, often hailed as a kind of “magic pill” for obesity, come at a price that’s far from magical for most individuals. Employers find themselves in a precarious position, torn between the desire to offer meaningful benefits and the need to maintain cost-effectiveness and value.
With healthcare costs on a relentless upward trajectory, a significant contributor being the rising expenses associated with medications, including brand-name drugs used for weight loss, employers are facing an impending increase in health care premiums next year. This surge is expected to range from 5.4% to 8.5%, and GLP-1s could potentially push these costs to unsustainable levels.
The statistics are staggering, with 43% of U.S. adults now classified as obese, and projections indicating that nearly half of the adult U.S. population will grapple with obesity by 2030. Even if a fraction of those eligible for GLP-1s opt for them, the costs are substantial, ranging from $900 to $1300 per month. While some employers may have access to lower negotiated prices, they still face expenses of $300 to $700 per month per employee. This expenditure becomes perpetual, and one public health researcher estimates that GLP-1s could lead to a 50% surge in U.S. healthcare spending. It’s noteworthy that some pharmaceutical companies have links to our nation’s food supply, adding complexity to the issue.
The fundamental question arises: Can employers realistically afford to cover obesity care? A $1300 monthly pill understandably feels unmanageable for most, and for valid reasons.
The Economic and Health Implications of Obesity
Beyond the financial quandaries posed by covering GLP-1s for weight loss, the direct and indirect health repercussions loom large. Obesity is not just a condition; it’s a disease that opens the door to and exacerbates numerous chronic health ailments, including heart disease, stroke, and diabetes. Those grappling with overweight or obesity face a heightened risk for 13 types of cancer.
Providing benefits to address obesity extends beyond the wellness domain; it’s about disease treatment. There exists a direct correlation between reducing obesity and enhancing both population health and employer economics. The annual healthcare costs for an individual with obesity average $1,861 more than those with a healthy body weight.
The Current Landscape of GLP-1 Coverage
The American Medical Association acknowledged obesity as a disease a decade ago, and some private employers can and do provide treatment for obesity. Estimates reveal that between 25% and 46% of employers covered GLP-1s for weight loss this year, with projections indicating a range of 43% to 49% coverage in 2024. Employers are exploring what suits them best.
However, bucking the trend, the University of Texas system discontinued its coverage of GLP-1s, deeming the costs unsustainable. Before diving headfirst into medications, employers can adopt a multimodal approach.
Embracing a Comprehensive Approach to Weight Loss
GLP-1s have shed light on obesity-related challenges, but the concept of treating obesity isn’t novel, with years of successful approaches to draw from. What makes the most sense is a multimodal approach tailored to individuals’ needs, preferences, and medical suitability.
Often termed “wellness programs,” 32% of companies already cover weight management through initiatives encompassing fitness challenges, nutritional counseling, health coaching, onsite gyms, and the provision of healthy food in the workplace. These programs encourage physical activity and healthier eating, and should be the foundation of a comprehensive solution for individuals with obesity.
The Affordability Conundrum: Can We Afford Not to Cover Obesity Care?
While businesses in the pharmaceutical industry thrive, individuals taking GLP-1s for weight loss often need to continue indefinitely to maintain their weight loss. Ceasing medication can lead to weight regain and associated health risks. Studies indicate that a year after discontinuation, individuals typically regain two-thirds of their previous weight loss and experience adverse cardiometabolic changes. At an average cost of $1000 a month per prescription you can quickly see how big pharma intends to cash out on Americas obesity epidemic!
While employers may delay decisions regarding obesity treatment coverage, the obesity epidemic shows no signs of abating. Obesity rates continue to rise, and there are no swift remedies for this complex issue. Physical activity, healthier eating, counseling, and calorie balance remain pivotal. Addressing obesity treatment is imperative, as it directly impacts employee health and employer finances, making it a critical commitment for businesses today.
Although we see the advantages, the costs and rush to prescribe should be carefully considered. With such a large percentage of the population considered obese the financial impacts are large at both ends. Employers and plan managers need to be engaged, understand options and alternatives to care and properly align individuals with the best path forward to improved BMI’s and a life well lived.