MW Paying more for health insurance? Why weight-loss drugs may be driving up premiums.

Andrew Keshner

There's been a 'stark increase' in the share of large businesses covering GLP-1s for weight loss, new research shows

The question is how employers, workers and insurers cope with the future costs associated with the weight-loss drugs and their spreading appeal.

As open enrollment approaches, a variety of factors - including pricey GLP-1 weight-loss drugs - are poised to push already expensive premiums for employer-sponsored healthcare even higher in 2026, a new report says.

"There is a quiet alarm bell going off. With GLP-1s, increases in hospital prices, tariffs and other factors, we expect employer premiums to rise more sharply next year," said Drew Altman, the president and chief executive of health-policy think tank KFF, which published the report Wednesday.

Businesses lack new ways to address the factors pushing up insurance costs, Altman said in a statement, and that could mean even higher deductibles and more cost-sharing with workers. Those are tactics "neither employers nor employees like but companies resort to in a pinch to hold down premium increases," he noted.

This year, workers paid an average $6,850 annual premium for family-plan coverage and employers paid more than $20,000 for their share - a 6% increase from last year. Individuals, meanwhile, paid $1,440 for their share of single coverage and employers paid $7,885 to cover premiums averaging $9,325 - a 5% year-over-year increase.

Those rate increases surpassed average inflation rates and wage growth, KFF said, providing another reminder of the costs gnawing at households.

Prescription-drug costs were the top-cited factor for rising premiums, according to large businesses surveyed by the think tank. Two-thirds of large businesses said GLP-1s for weight loss had a "significant" impact on their prescription-drug spending.

Wednesday's report came ahead of the start of open enrollment for Affordable Care Act plans. It also came amid a three-week-long government shutdown stemming from a fight over healthcare plans purchased through ACA exchanges. Next year's premiums could soar if an enhanced Affordable Care Act premium tax credit is allowed to expire at the end of 2025.

Yet job-sponsored insurance is the largest source of healthcare coverage in the U.S., covering more than half of Americans. More than 150 million people under age 65 have coverage through work or a family member's job, according to KFF.

Here's why GLP-1 coverage costs are a big deal: Approximately 36 million people with employer-sponsored healthcare might medically qualify for GLP-1s for weight loss, KFF said - more than the approximate 24 million people who have coverage this year through ACA plans.

More businesses than in the past say they're paying for coverage of GLP-1 drugs, which were originally prescribed for diabetes, and more say they are surprised by how many workers and covered plan members are turning to the medications, which include Ozempic, Wegovy, Mounjaro and Zepbound.

Over 4 in 10 large businesses (43%) said they are covering GLP-1s for weight loss, up from 28% last year - a "stark increase," according to Matthew Rae, associate director of KFF's healthcare-marketplace program. Six in 10 of these businesses said there was higher-than-expected use of the medications for weight loss, the KFF report said.

It's going to be a challenge for employers to contain costs - or for workers to avoid paying more - as the weight-loss medications continue to gain traction, according to a separate study published earlier this month by the Employee Benefit Research Institute.

The think tank's analysts simulated the indirect effects of covering these drugs. If an employer offered a GLP-1 with a $0 monthly copay and restricted coverage to diabetic and obese plan participants, premiums for everyone in the plan would increase approximately 6% the next year, said Jake Spiegel, a senior research associate at EBRI.

If that employer expanded coverage to people who were overweight, there would be a 10% increase in premiums for all plan participants the following year, researchers said.

Even after introducing a $90 monthly copay - a typical price for a specialty medication, Spiegel noted - GLP-1 prescription coverage for overweight users would still result in an approximate 9% increase in premiums.

The study based its simulation on 30-day supplies for brand-name medications where the "current net price" actually paid by companies ranged from $617 to $766. In a hypothetical scenario where GLP-1s cost $200 a month, premium increases ranged from 1% to almost 4%.

Who's going to pay for GLP-1 coverage?

It's difficult to measure the extent to which increased GLP-1 use drove higher premiums for employer-sponsored plans in 2025, Rae noted; that type of analysis requires a crunch of claims data. But the growing use of GLP-1s is certainly part of the conversation on why workers' premiums keep marching higher, he said.

The question is how employers, workers and insurers cope with the future costs associated with the weight-loss drugs' spreading appeal. They may also prove to be a challenge for pension funds, according to researchers at reinsurance company Swiss Re (CH:SREN) $(SSREY)$.

"To some extent, the cat is already out of the bag," said Spiegel.

For a companion report produced by KFF, Rae heard from companies' health-benefits managers in focus groups. He said they want to provide the GLP-1 coverage for a variety of reasons, such as retaining staff, meeting employees' expectations for access to the medications, and seeking to improve employees' health.

But for any employer preoccupied with the financial toll of covering GLP-1s for weight loss, Rae said, "the thing you are terrified of is someone [continuing to use] these drugs for the rest of the time they work for you."

Extra requirements, like receiving nutritional coaching and falling within certain body-mass-index thresholds, often accompany coverage, Rae noted. They may become more common and more restrictive as a future cost control, he added.

Read also: Weight-loss drugs shook up the stock market. Menopause treatments could be next.

If employers tighten eligibility requirements for GLP-1 coverage, that could further fuel direct-to-consumer purchases, said Spiegel. For example, Costco $(COST)$ and drugmaker Novo Nordisk (NVO) (DK:NOVO.B) recently announced plans to sell Ozempic and Wegovy for $499 per month to the retailer's members.

The KFF companion report quoted several people working in the employee-benefits space. "We are trying to decide how to manage this crazy cost of the GLP-1s," one human-resources leader at a manufacturer said.

A Novo Nordisk spokesperson said people with insurance may not have any monthly out-of-pocket cost, or might pay just $25 for four weeks of Wegovy, depending on their plan. Three-quarters of gross sales go to rebates and discounts that are reimbursed to payers including insurers, the spokesperson said.

"In the U.S., access and affordability are impacted by multiple parties throughout the supply chain, and companies like ours do not determine what patients pay out of pocket. In addition, we negotiate and pay rebates to provide affordable access for patients," Novo Nordisk representative said.

Eli Lilly $(LLY)$, which makes Mounjaro and Zepbound, did not immediately respond to a request for comment.

-Andrew Keshner

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October 22, 2025 13:53 ET (17:53 GMT)

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