Health insurance premiums in the United States are projected to increase by nearly 9 percent in 2024, marking the most significant rise in five years. This surge is largely attributed to the rising use of weight loss medications, particularly GLP-1 drugs like Ozempic, along with heightened tariffs on pharmaceutical imports.
The KFF health tracking poll indicates that approximately 6 percent of the U.S. population, or over 20 million Americans, are currently utilizing these weight loss drugs. As a result of this increased demand, health insurance costs will likely escalate for both employers and employees. According to The Washington Post, those enrolled in the Affordable Care Act could see their health insurance costs rise by as much as 75 percent next year.
Factors Behind the Surge in Costs
The rise in premiums can be largely linked to the increasing utilization of GLP-1 medications, which have gained popularity for their effectiveness in weight loss. Debbie Ashford, chief actuary at Aon, stated that the use of these drugs surged by 92 percent in 2023, with a further increase of 56 percent anticipated in 2024. This upward trend is expected to continue, with costs for some individuals reaching as high as $800 per month.
Employers are responding to this surge in demand by implementing prior authorization reviews for coverage of these drugs. A recent survey revealed that 90 percent of employers are requiring such reviews, with nearly half mandating that patients demonstrate substantial overweight status based on their body mass index.
Insurance Implications for GLP-1 Users
Aside from rising premiums, users of GLP-1 medications face additional challenges related to their insurance coverage. Individuals traveling with these medications must declare them to their travel insurer, as failing to do so could invalidate their insurance policy. Kara Gammell from the price comparison website Money Supermarket emphasized the importance of declaring both the medication and any underlying health conditions when purchasing insurance.
“Failing to do so could invalidate your cover—even if your claim has nothing to do with the treatment,” Gammell explained. Therefore, it is crucial for GLP-1 users to consult with their insurance providers before traveling to ensure they remain covered.
As the health landscape evolves due to the increased popularity of weight loss drugs, the financial implications for both consumers and insurers are becoming increasingly significant. The anticipated rise in health insurance costs reflects broader trends in medication usage and healthcare funding, raising important questions about the future of insurance coverage in the U.S.