At 5 feet 2 inches and 228 pounds, she had a body mass index of nearly 42—well above the cutoff US regulators had approved for eligibility for the medication. She also had serious joint problems after decades of struggling with her weight…The weight has taken a toll. With osteoarthritis so bad that the bones in her knees were rubbing against one another, she has already had her right knee replaced and has surgery for her left scheduled for next month. “I wondered if I was going to have a nursing career left”, she said. Since she started taking GLP-1 drugs in September 2022, she has lost 76 pounds. She now weighs 191 pounds. “My life has changed, in an amazing way”, she said. “It’s the first time where I’m not constantly thinking about food.” But to cover the out-of-pocket costs—nearly $2,000 so far—Ms. Simonton and her husband have reduced their spending on groceries and cut their retirement savings.
…But her insurance refused to pay for the medication, citing a blanket ban on covering weight-loss drugs, according to a letter Ms. Simonton received in March from her benefits administrator.
Now, Ms. Simonton is suing the Washington State agency that purchases health insurance for public employees like her. Her lawyers argue that the state’s health plans are discriminating against Ms. Simonton—and others who, like her, are seeking weight-loss drugs—in violation of state law, which recognizes obesity as a type of disability.
Ms. Simonton’s case is a flashpoint in the conflict over whether health insurance should have to cover obesity drugs. The challenge for payers is that the medications would be hugely costly if they were broadly covered in the United States, where more than 100 million people are obese.
…Federal law prohibits Medicare from paying for drugs for weight loss, a ban that persists largely because of the staggering costs. If Congress were to overturn the ban, one projection from academic researchers estimates, two million Medicare beneficiaries—10% of older people with obesity—would take Wegovy [semaglutide]. In that case, the government’s annual expenditure would be $27 billion, nearly a fifth of the yearly spending for Medicare’s Part D program covering prescription drugs taken at home.
Employers and state health insurance programs for public employees face a similar dilemma. In Arkansas, where 40% of people on the plan for state employees have obesity, covering the drugs would cost $0.083b annually. The Wisconsin program would have to come up with an additional $0.025b annually.
“Employers don’t suddenly have a new pot of money to pay for higher health insurance premiums”, said Dr. Steven Pearson, president of the Institute for Clinical and Economic Review, which assesses the value of medicines. “We’re talking about big changes to companies’ ability to provide other benefits, wage increases, new hires, and they may also have to turn that into higher premiums for their own employees.”
Another worry for employers is that they may not reap the savings of investing in weight-loss medications. Averted heart attacks and avoided hospital stays made possible by the drugs may not manifest in savings until years down the line, when a patient has left that employer.