Source: Politico
Soaring costs of weight-loss drugs are leading some states to scrap the benefit for state employees, your host reports.
After Colorado’s spending on the highly effective but costly drugs classified as GLP-1s, which include Ozempic and Wegovy, more than quadrupled from 2023 to 2024 — with usage doubling every six months — the state health plan is proposing ending coverage, arguing it’s financially unsustainable. The potential removal of coverage is sparking blowback among state workers.
The state employees’ union argues that ending coverage will cost the health plan in other ways: an increase in spending on obesity-related diseases and a less healthy workforce.
“[State employees] are very upset about this,” Hilary Glasgow,executive director of the union, Colorado WINS, said. “Long-term obesity drives a lot of the major fatal diseases in America, and the employees I’ve talked to feel like they’re losing a lifeline that got thrown to them.”
Why it matters: Colorado’s case illustrates the broader struggles states that choose to cover the drugs for employees face as many states deal with budget shortfalls: Keep covering the drugs and risk depleting their budgets — and potentially increase premiums for everyone on their plans — or eliminate a benefit many employees rely on.
At least two others — North Carolina and West Virginia — have already eliminated coverage due to cost concerns. That means those states’ employees seeking the drugs for weight loss will have to pay up to $1,500 a month for the treatments.
The dilemma also comes as states face their toughest budgetary pressures in years, largely because the federal cash they received during the pandemic has been spent.
“The problem is the near-term cost is so high, and the benefits that you would gain are over a longer-term period,” said Charles Sallee,director of the New Mexico Legislative Finance Committee, which is exploring options to reduce the costs of covering the drugs for state employees. “But is that person still going to be in your health plan five years from now?”
Key context: GLP-1s are growing increasingly popular: The number of Americans taking the drugs for weight loss rose more than 700 percent between 2019 and 2023, according to a recent study.
Michigan, which covers about 49,000 state employees, spent $5.2 million on weight-loss drugs in 2022. That number skyrocketed to $17.5 million in 2023 and $36 million in 2024.
The state’s Civil Service Commission said one struggle in designing coverage is that the drugs are new, so data on the effects of long-term use is limited.
“If weight loss isn’t sustained with or without GLP-1s, we aren’t going to have good health outcomes, and plan costs are going to go up,” said Bethany Beauchine, director of the Bureau of Benefits Administration at the Michigan Civil Service Commission. “What we’re trying to figure out is whether the plan costs will stay manageable with the use of the GLP-1s.”
