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Having a clear picture of just what your competition’s employee benefit plan looks like is important for companies vying to recruit and retain the best talent. Here’s some fresh news that might help:
A recent survey by the International Foundation of Employee Benefit Plans sheds light on a significant shift: more U.S. employers are now covering GLP-1 drugs, not just for diabetes but also for weight loss.
Let's dive straight into the juicy details:
- 57% of employers now cover GLP-1 drugs for diabetes only, up from 49% in October 2023. That’s a solid jump.
- 34% cover these drugs for both diabetes and weight loss, a notable increase from 26% last year. Double duty, double benefits!
- And here’s a kicker: 19% of employers currently covering only for diabetes are considering extending coverage to weight loss. This shift shows a growing appreciation of GLP-1 drugs’ versatility.
- Claims for GLP-1 drugs used for weight loss now make up an average of 8.9% of total annual claims, up from 6.9% last year. That tells us people are catching on to how these drugs can help shed those stubborn pounds.
GLP-1 drugs aid in weight loss by curbing hunger and slowing down stomach emptying. Originally approved for diabetes treatment, these drugs have gained popularity for their effectiveness in achieving approximately 20% weight reduction. The primary issue surrounding GLP-1 drugs is not their effectiveness but rather the cost burden. In the U.S., the list prices for these drugs range from $936 to $1,349 per month before considering insurance, rebates, or other discounts.
On the other hand, the annual medical cost of obesity in the United States was $173 billion in 2019.
Rising Claims for Weight Loss
New research also shows these medications may help with cancer.
People with Type 2 diabetes who were treated with GLP-1 medications were found to be less likely to be diagnosed with obesity-associated cancers than people treated with insulin or metformin, according to a new study published July 5 in the medical journal JAMA Network Open.
At the same time, given their expense, managing the cost of these popular drugs is crucial for employers. Here’s how they’re keeping things in check:
- 85% use utilization management techniques, such as prior authorization and BMI/comorbidity requirements. Smart moves!
- Less common but still notable: step therapy (18%) and eligibility requirements (16%).
- Surprisingly, 9% of employers have no cost-control mechanisms in place. Talk about living on the edge!
The bottom line? More employers are recognizing the dual benefits and potential cost savings of GLP-1 drugs, particularly for weight loss.
The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the U.S. For more information, visit our website or call 877-440-3304.
This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.