The Biden administration proposed directing Medicaid and Medicare to cover weight-loss drugs … [+]
News from the Biden administration plan requires Government Medicare and Medicaid health insurance plans to cover weight loss medications may encourage private employers to do the same for their obese employees.
Currently, fewer than one in five large employers pay for such prescriptions, despite the surge in popularity of expensive GLP-1 drugs to treat weight loss, according to a KFF analysis earlier this year.
But employee benefits analysts say employers could follow suit. And those who follow the Biden administration’s move to expand access to anti-obesity drugs, such as Ozempic and Wegovy, which are produced by the drug manufacturer Novo Nordisk, and Mounjaro and Zepbound, made by Eli Lilly, should be willing to pay higher health insurance premiums for their employees.
“Employers will feel that the Medicare program has expanded coverage,” said Tracy Spencer, pharmacy practice leader at Aon. “However, their decisions on drug cost coverage for obesity and overweight, together with associated indications for use such as cardiovascular risk reduction, will be based on prevalence, cost and equity considerations as they relate to their population, account taking into account the totality of increasing healthcare expenditure. managed under their benefit programs and the associated waste in the system.”
In fairness, data published by Aon earlier this year showed that weight loss prescriptions from Wegovy, Rybelsus and Saxenda – along with Ozempic – are the “biggest driver” of employer healthcare costs, adding 1% to total premium expenditure for 2025.
These GLP-1 drugs contribute to overall healthcare inflation, which is expected to increase employer-sponsored health insurance coverage by 9%, surpassing $16,000 per employee by 2025. The spike in premiums, which is higher than the 6.4% increase employers faced this year and into 2023, before “cost-saving strategies” are implemented, Aon said in its report earlier this year.
Employees can also expect higher co-payments, deductibles and premiums deducted from their wages, as employers pass on approximately 20% of their total premium costs to employees, although this can vary widely depending on the employer.
Costs would also rise for states that administer Medicaid coverage for the poor and Medicare, the health insurance program for the elderly, as well as private Medicare Advantage plans and Medicare Part D drug coverage, analysts say.
The proposed new rule, which the incoming new Trump administration must approve, would not go into effect until January 1, 2026, leaving individual Medicare plans in the marketplace to decide how to manage the change and reflect their costs in the bidding process. benefits say analysts.
But the Biden administration said such messaging is necessary to combat the nation’s obesity epidemic, which itself is raising health care costs.
“Our loved ones on Medicare deserve care that puts their best interests first. HHS proposes to improve transparency, accountability and consumer protections in Medicare Advantage and Part D plans so that everyone receives high-quality care,” said U.S. Secretary of Health and Human Services Xavier Becerra. “To achieve this, we want to remove barriers that delay care or deny people the services and medications they need to be healthy. In addition, we continue to promote competition between pharmacies and other healthcare companies.”
Meanwhile, lack of access to such weight-loss drugs, praised for their effectiveness, would improve health outcomes and save lives, the Biden administration said.
“In recognition of the prevailing medical consensus that obesity is a disease, [the Centers for Medicare & Medicaid Services] proposes to reinterpret the statute to no longer exclude anti-obesity medications used to treat obesity from coverage under Medicare Part D and to require Medicaid programs to cover these medications when they are used to treat obesity,” said CMS in announcing its proposal. “This proposal would give more Americans access to these transformative medicines, improving the health and quality of life for millions of people with obesity.”
CMS Administrator Chiquita Brooks-LaSure said the “Biden-Harris administration has worked to ensure that the Medicare Advantage and Part D prescription drug programs work for people with Medicare, adopting policies setting out plans that are responsible for providing quality healthcare, and has protected sustainability. of the Medicare program.”
“This proposed rule builds on this work by expanding access to obesity medications for people with Medicare and Medicaid, further addressing prior authorization issues in Medicare Advantage, and promoting informed choice and transparency by making Medicare Advantage plans to require them to share vendor directory information. on Medicare Plan Finder,” Brooks-LaSure added.