The potential inclusion of anti-obesity drug coverage for state workers is under scrutiny in Wisconsin, with estimates indicating it could incur an annual cost exceeding $20 million, despite potential medical savings from weight loss, according to a report from the Wisconsin State Journal. The Department of Employee Trust Funds (ETF) relayed this information to the Group Insurance Board, which was convened this week to approve benefit adjustments for the forthcoming year.
Despite advocacy from medical professionals and patients, ETF recommended against the Group Insurance Board’s approval of anti-obesity drug coverage. These drugs, encompassing newer injections like Ozempic, Wegovy, and Zepbound, have demonstrated efficacy in aiding weight loss among some obese individuals, surpassing the outcomes of older drugs or conventional lifestyle modifications. However, their list prices, ranging from $900 to $1,300 per month, pose significant financial hurdles. Notably, Medicare and numerous private insurance plans do not cover these drugs, and Wisconsin’s Medicaid offers limited coverage.
The Group Insurance Board has deliberated on the prospect of covering these medications since May 2022. Medical practitioners and patient advocacy groups have advocated for coverage, particularly for a select group of patients who stand to benefit the most from these drugs. ETF, however, has cited concerns over the drugs’ steep costs and uncertain long-term efficacy.
According to a Jan. 24 memo from ETF to the board, based on analysis by consulting firm Segal, if the drugs were covered in 2025, an estimated 7,406 individuals within the ETF membership would utilize them, resulting in a cost of $24.8 million. This expenditure would be partially offset by $3.5 million in medical savings, resulting in a net cost of $21.3 million. Subsequently, in 2026, an estimated 9,315 individuals would opt for the drugs, with costs totaling $39.7 million. Despite projected medical savings of $12.4 million, the net cost would amount to $27.3 million. Not until 2030, when coverage expenses are anticipated to reach $60.1 million and savings to hit $40.4 million, would the net cost marginally drop below $20 million.
The analysis assumes that 25% of individuals with a body mass index (BMI) of 35 or higher, indicating moderate to severe obesity, would opt for the drugs. Notably, more than half of the users would discontinue usage after one year, despite an annual increase of 5 percentage points in drug uptake, according to the analysis.
An earlier assessment by Segal estimated that ETF would spend $9 million to $14 million annually to achieve $2 million in medical savings through weight loss. Notably, in 2020, ETF initiated coverage for weight-loss surgery for individuals with a BMI of 35 or higher.
