Health insurance costs in the United States are projected to experience the most significant increase in five years, largely driven by the rising popularity of weight loss medications, particularly GLP-1 drugs like Ozempic. According to a recent report by The Washington Post, these medications are contributing to an expected 9 percent hike in health insurance premiums for businesses in 2024, which will likely affect the costs for employees.
The utilization of GLP-1 medications has surged significantly, with approximately 6 percent of the US population—or over 20 million Americans—currently using these drugs, according to a KFF health tracking poll. As usage continues to rise, health insurance plans are bracing for the impact. The 24 million Americans enrolled in the Affordable Care Act will face an alarming 75 percent increase in their insurance costs next year.
Impact of GLP-1 Drugs on Insurance Costs
Debbie Ashford, chief actuary at Aon, emphasized the trend, stating, “We are seeing a continued surge in utilization of the GLP-1 drugs.” Data shows that the use of these medications rose by 92 percent in 2023, followed by an additional 56 percent increase in 2024. For some individuals, the cost of GLP-1 medication can reach as high as $800 per month.
Employers are responding to the rising costs by tightening access to these medications. A recent survey revealed that 90 percent of employers now require prior authorization reviews before covering weight loss medications. Almost half of these employers mandate that patients demonstrate substantial overweight status, as determined by their body mass index (BMI), before receiving approval.
Insurance Considerations for GLP-1 Users
As the use of GLP-1 medications grows, experts caution users to be vigilant about their insurance policies. Individuals traveling with these medications are required to declare them to their travel insurers. Failing to disclose this information could lead to invalidation of their coverage. “If you’re prescribed these drugs for obesity, diabetes, or any other condition, it’s essential to declare both the medication and the underlying health issue when buying your policy,” said Kara Gammell from price comparison website Money Supermarket.
Notably, failure to inform insurance providers about GLP-1 medications can result in insurers refusing to pay out on claims, even if they are unrelated to the treatment. Individuals are urged to consult with their insurance companies before traveling to clarify how their policies may be affected.
The rising cost of health insurance, fueled by the increased use of weight loss medications, poses significant financial implications for millions of Americans. As the landscape of health insurance continues to evolve, both employers and employees must navigate these changes carefully to mitigate the impact on their health coverage.
