Massachusetts State Health Plan Drops GLP-1 Drug Coverage Amid Rising Costs

State health plan overseers in Massachusetts have voted to eliminate coverage for GLP-1 drugs for obesity, a decision driven by surging healthcare costs. The move, approved by the Group Insurance Commission (GIC), aligns with similar actions taken by commercial insurers and the Massachusetts Interlocal Insurance Association.

Coverage Changes and Cost Savings

The GIC’s decision impacts approximately 22,000 members currently taking GLP-1 drugs for weight loss, representing a total cost of $46 million, according to Margaret Anshutz, the agency’s director of health policy and analytics . Coverage for those using GLP-1 drugs for conditions like diabetes will not be affected.

The commission voted 10-7 to end the benefit, with commissioners expressing concern that the change could exacerbate health disparities and potentially lead to higher costs if members’ chronic conditions worsen .

Eliminating GLP-1 coverage for weight loss is expected to bring premium growth down to an average of 7.5%, the smallest increase in years . Previously, premiums were predicted to climb by 9% to 13% for the fiscal 2027 plan year.

Financial Pressures and State Funding

The GIC provides insurance for more than 460,000 public employees and retirees and is awaiting a $300 million funding infusion to ensure it can continue to pay claims after April . Soaring costs tied to GLP-1 drugs have strained the agency’s budget, prompting the Healey administration’s request for roughly $120 million in savings.

Governor Maura Healey urged the GIC board to prioritize ending GLP-1 coverage for weight loss over other cost-cutting measures, such as raising copays and deductibles . Dana Sullivan, a designee from the Executive Office for Administration and Finance, stated that this move is part of a strategy to increase leverage with drugmakers.

Premium Increases and Member Costs

Premium increases will vary among GIC members. Approximately 96,500 members will see an increase of 4% to 5%, while about 49,600 will experience a 7% to 8% increase. Nearly 52,000 members will see an 8% to 9% increase, and over 12,000 will face increases of 12% to 17% .

For non-Medicare products, the average premium increase is 8%. The Wellpoint Total Choice plan has the lowest rate increase at 4.1%, while MGB Complete HMO has the highest at 13.6% .

The GIC has been actively working with Vida Health as a sole prescriber for GLP-1 drugs, with over 11,000 members enrolling since January 1 . The agency is now considering the future of this contract, including potential options for winding it down or transitioning to a direct-pay model.

The GIC plans to communicate a transition plan to members before March 31 .