Weight loss drugs are hiking employer healthcare prices, with 87% saying they expect costs to only go up

Employers are saying that popular weight loss drugs are driving up costs for group medical plans to such a degree that they’re considering excluding them from coverage altogether.

In a survey from Business Group on Health, a nonprofit that works with companies and policymakers to reduce employee healthcare costs, nearly 80% of employers said GLP-1 drugs are a primary factor driving up premiums for employer-sponsored health benefits. Further, 10% of those surveyed said they’ll be making changes next year to stop covering the class of medications through their health plans.

This would be done in an effort to contain costs. Despite the vast majority of employers saying GLP-1s are pushing the cost of healthcare up, 72% of those that currently cover them did confirm they intend to continue doing so heading into next year.

The drugs are very popular, sold under brand names like Ozempic, Wegovy and Zepbound, among others.

The majority of respondents (67%) told the Business Group on Health that they do provide a way for employees to have the costs of drugs covered for weight loss—which has been the sticking point for Medicare and commercial health plans. In many cases, GLP-1s are only covered for the management of diabetes.

Notably, that was the original purpose of the drugs—they help to normalize blood glucose levels for those with type 2 diabetes and at risk of developing the condition. They also can help to improve sleep apnea and treat substance use disorders, though it’s unclear where the lines are in terms of what health plans will cover.

Employers have tried to balance the health needs and popularity of the drugs with rising costs, Business Group on Health said. But an overall rise in the cost of all drugs has led to increased scrutiny of GLP-1 medications.

The insurance costs for those alone hover around $1,000 a month—and employees can be on them for a long time. While more than half of employers that currently cover GLP-1s said they expected it would pay off in the long run in terms of overall health improvements, few reported seeing any evidence of that happening, contributing to long-term uncertainty.

“Our findings show the tremendous concern employers have regarding these medications from a cost and financial viability perspective,” Ellen Kelsay, president and CEO of Business Group on Health, said in a statement. “Against the backdrop of anticipated double-digit health care cost increases, fueled to a large degree by GLP-1s and overall prescription drug costs, companies cannot ignore the reality that GLP-1s have significant implications for health care budgets—and overall affordability.”