22% of employers will cover weight loss drugs: Survey

New drugs such as Ozempic and Wegovy have exploded in popularity for weight loss, but insurers and employers say there is still low interest in covering them because of the high cost.

"To date … employers have had a more limited appetite to expand coverage beyond clinical diagnoses such as diabetes for certain lifestyle treatments," David Cordani, CEO of the Cigna Group, told investors May 5.

Among employer-sponsored plans, 22.1 percent said they offered coverage for prescription weight-loss drugs in 2022, according to the International Foundation of Employee Benefit Plans' annual survey. The survey included responses from 502 organizations across nearly 20 industries and ranging in size from fewer than 50 to more than 10,000 employees. It also found that 45 percent of employers cover bariatric surgery and 32 percent cover weight management programs. 

GLP-1 drugs, including Ozempic, Trulicity, Victoza and Mounjaro, are used to treat Type 2 diabetes. Others such as Wegovy and Saxenda are specifically approved for weight loss. The drugs can cost upward of $10,000 annually without insurance coverage. 

Payers typically do not cover GLP-1s meant for treating obesity but do often cover drugs meant to treat diabetes. The nation's largest payers told investors in the first quarter that coverage of GLP-1s has been almost entirely constrained to diabetes care. 

"We certainly are kind of at the beginning of the curve in terms of how insurance companies and healthcare plans are going to tackle this," Jennifer Chang, knowledge adviser at the Society for Human Resource Management, told The Wall Street Journal on May 22.

Some health plans require evidence that weight loss strategies such as exercise or diet changes have not worked previously, while other plans may require a coinciding behavioral weight-loss program if coverage is provided.

If patients are able to secure coverage for weight loss, their out-of-pocket costs could still be significant, according to the Journal. Most drug manufacturers do offer assistance programs to help pay those costs.

In addition, securing coverage for a GLP-1 once does not guarantee permanent coverage. Some health plans may require weight loss milestones to continue coverage, while others may terminate coverage if the patient loses enough weight. 

For Medicare enrollees, weight loss drugs are never covered. With the heightened demand and resulting supply issues, drug manufacturers and shareholders are pushing for Medicare to cover these medications, according to KFF. If 10 percent of Medicare enrollees with obesity were prescribed a brand-name semaglutide, a type of GLP-1, the drug would cost Medicare $26.8 billion annually, according to a study published in the New England Journal of Medicine in March, representing 18.5 percent of current Part D spending. 

In 10 states, Medicaid offers broad coverage for weight loss drugs, according to Bloomberg

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