Health insurers around the country are looking to raise premiums next year in part to meet the high demand for expensive weight-loss drugs such as Ozempic.
In June, a majority of payers in Massachusetts publicized their requests to raise premiums in the individual and small group markets, ranging from 3.3 percent for Worcester-based Fallon Health's insurance plan to 12.1 percent for UnitedHealthcare, The Boston Globe reported.
"We're certainly starting to see requests for [some of the weight-loss medications] and trying to control costs while getting members appropriate levels of care," Tyler Hutchinson, chief actuary at Health New England, said at a public information session hosted by the state Division of Insurance.
BCBS of Massachusetts told the Globe it expects spending on weight loss drugs to triple in 2023 compared to last year. From January through April, it had already written more than 55,000 prescriptions for Mounjaro, Ozempic and Wegovy.
Point32Health, parent company of Tufts Health Plan and Harvard Pilgrim, told the Globe it wrote nearly 24,000 weight loss prescriptions for commercial members from January to May, which was equal to all of 2022. It would have been even higher without Wegovy shortages caused by high demand.
GLP-1 drugs, including Ozempic, Trulicity, Victoza and Mounjaro, are FDA approved to treat Type 2 diabetes while Wegovy and Saxenda are approved for weight loss. The drugs can cost patients more than $10,000 a year without insurance coverage.
In Michigan, insurers requested a 7.1 percent average premium increase on the small group market for next year and a 5.5 percent rate increase for the individual market. BCBS of Michigan said higher than average pharmacy costs were one of the contributing factors to their proposed premium increases.
Atheer Kaddis, PharmD, chief pharmacy officer at BCBS Michigan, told the Detroit Free Press rising demand for GLP-1 drugs is one of the factors increasing pharmacy costs.
Weight loss drugs are only a part of the reason insurance premiums are rising, though spending on them has grown faster than expected, Massachusetts Association of Health Plans President and CEO Lora Pellegrini told the Globe. She also pointed to higher care costs in hospitals contributing to higher rate requests.
The nation's largest payers told investors in the first quarter that coverage of GLP-1s has been almost entirely constrained to diabetes care. In a June survey from the Pharmaceutical Strategies Group, 49 percent of plans surveyed said they currently cover medications for weight loss, compared to 41 percent of employers.
For Medicare enrollees, weight loss drugs are never covered under federal law. In 10 states, Medicaid offers broad coverage for weight loss drugs, according to Bloomberg.
BCBS Massachusetts requires six months of alternative weight loss strategies before prescribing expensive drugs, and BCBS Michigan is requiring prior authorization for the drugs to prevent off-label use. Point32Health prescribes the drugs only under certain conditions and for an initial period of six months, along with requiring diabetic members to try less expensive medications first.