NEWSROOM

As we have discussed in prior posts, the popularity of high-cost specialty drugs like GLP-1s, used to treat Type 2 diabetes and obesity, is causing some employers to rethink coverage as part of their employer-sponsored health plans.

The percentage of large employers covering GLP-1s for chronic weight management dropped this year to 60% as compared to 72% in 2025. An additional 10%-14% have shared plans to cut or scale back coverage. Some employers – both large and small – are only offering coverage to employees with a formal Type 2 diabetes diagnosis.

A new report by Wells Fargo suggests that GLP-1s may start to upend the health care industry spending model. That’s because numbers from the Centers for Disease Control and Prevention and the National Center for Health Statistics show 40%+ of adults in the U.S. have obesity and 9.4% have severe obesity (about one in ten).

Metabolic bariatric surgery used to be considered the most effective obesity treatment; however, that is shifting. Surgical volume fell by more than one-third from 2022 to 2024, while GLP-1 usage increased more than 140% during the same period.

GLP-1 use is affecting health conditions beyond obesity. GLP-1s have been found to lower the risk of major adverse cardiovascular events, heart failure hospitalizations, strokes, and heart attacks. They slow the progression of diabetic kidney disease and reduce albuminuria (protein in the urine). They decrease the frequency of breathing interruptions for patients with Obstructive Sleep Apnea. Recent reporting suggests a lower risk of cognitive disorders, dementia (including Alzheimer’s disease), and certain use or addictive disorders. It seems as though new benefits are being reported monthly.

The big concern for insurers and employers is long-term health care costs – and their impact on future health insurance premiums. We’ll continue to monitor the situation and will report future forecasts.