Health Insurers Set To Increase Premiums As Demand For Ozempic Raises Cost Of Care
Health insurance providers across the country are seeking to increase premiums in the coming year, partly due to the surging demand for weight-loss medications like Ozempic. Massachusetts insurers, for instance, have made public their intentions to raise premiums in the individual and small-group markets. Fallon Health’s insurance plan based in Worcester is requesting a 3.3 percent increase, while UnitedHealthcare is seeking a 12.1 percent hike, as reported by The Boston Globe.
Tyler Hutchinson, the chief actuary at Health New England, mentioned during a public information session hosted by the state Division of Insurance that requests for weight-loss medications have been on the rise. The insurers are striving to balance cost control with ensuring appropriate care for their members.
BCBS of Massachusetts informed the Globe that it anticipates a threefold increase in spending on weight loss drugs in 2023 compared to the previous year. By April, they had already issued over 55,000 prescriptions for Mounjaro, Ozempic, and Wegovy.
Point32Health, the parent company of Tufts Health Plan and Harvard Pilgrim, reported to the Globe that they had prescribed nearly 24,000 weight loss medications to their commercial members from January to May, equaling the total for the entire year of 2022. The number would have been even higher if not for the shortages of Wegovy caused by high demand.
GLP-1 drugs such as Ozempic, Trulicity, Victoza, and Mounjaro are FDA-approved for treating Type 2 diabetes, while Wegovy and Saxenda are approved for weight loss. These medications can cost patients over $10,000 per year without insurance coverage.
In Michigan, insurers have requested an average premium increase of 7.1 percent for the small group market and 5.5 percent for the individual market in the coming year. BCBS of Michigan attributed the proposed premium increases, in part, to higher-than-average pharmacy costs. Atheer Kaddis, PharmD, chief pharmacy officer at BCBS Michigan, stated that the growing demand for GLP-1 drugs is contributing to rising pharmacy costs.
However, while weight loss drugs play a role in the rising insurance premiums, Lora Pellegrini, President, and CEO of the Massachusetts Association of Health Plans, emphasized that they are not the sole reason. She cited increased hospital care costs as another factor contributing to the higher rate of requests.
According to the first-quarter reports of the largest payers in the country, coverage of GLP-1s has been mostly limited to diabetes care. A survey by the Pharmaceutical Strategies Group in June revealed that 49 percent of plans surveyed currently cover medications for weight loss, compared to 41 percent of employers.
Under federal law, weight loss drugs are not covered for Medicare enrollees. However, in 10 states, Medicaid provides extensive coverage for these medications, as reported by Bloomberg.
BCBS Massachusetts requires six months of alternative weight loss strategies before prescribing expensive drugs, while BCBS Michigan now mandates prior authorization for these drugs to prevent off-label use. Point32Health prescribes the medications only under specific conditions and for an initial period of six months, along with requiring diabetic members to try less expensive medications first.
