EBRI research probes impact of GLP-1 drugs on health insurance premiums

(Washington, D.C.) – A new research report, “GLP-1 Coverage and its Impact on Employment-Based Health Plan Premiums: A Simulation-Based Analysis,” published today by the Employee Benefit Research Institute, found that the impact of GLP-1 drug coverage on health insurance premiums is highly sensitive to a combination of factors – including drug prices, adherence levels, cost-sharing design and eligibility criteria.

“The rapid growth in GLP-1 drug usage, which was initially developed for diabetes but is now widely used for weight management, is reshaping employment-based health benefits. As these medications are increasingly prescribed to individuals with obesity or who are overweight, employers are grappling with how to manage access and costs. While the clinical promise of GLP-1s is expanding, the drug’s high price point and growing demand have raised concerns about their impact on premiums,” explained Jake Spiegel, senior research associate, EBRI. “Our research used a simulation model to assess how GLP-1 coverage may affect employment-based health insurance premiums under varying assumptions related to drug costs, adherence rates, cost-sharing structures and eligibility criteria.”

Key findings in the new research report include:

• The impact of expanding GLP-1 coverage on employment-based health insurance premiums is sensitive to assumptions surrounding uptake and drug prices: Using real-world drug cost scenarios, premium increases ranged from 5.3% to 13.8%, depending on adherence, cost-sharing and eligibility assumptions; Using a hypothetical lower-priced GLP-1 with a $200/month cost, increases ranged from 1% to 3.9%, reflecting the potential for future price reductions to mitigate cost pressures.
  • Currently, GLP-1 drugs are very expensive. According to a recent estimate, the net price for a monthly supply of GLP-1 drugs ranged from $617 to $766.
• Additionally, GLP-1 usage is relatively low: only 3% of non-elderly adults covered by employment-based health insurance had a GLP-1 claim in 2022 and a 2024 survey found that one in eight respondents had ever taken a GLP-1. However, there is a massive pool of potentially eligible enrollees. Over 40% of privately insured adults – more than 57 million people – are clinically eligible for GLP-1 drugs resulting from diagnoses of diabetes, obesity or overweight with additional risk factors.
• Employer coverage is expanding: 55% of employers cover GLP-1s for diabetes and 36% cover the drug for both diabetes and weight loss.
• Perfect adherence leads to higher premiums: More consistent drug use may improve individual well-being and health outcomes but drives up overall plan spending in the short term. Simulations assuming perfect adherence result in premium increases that are several percentage points higher than simulations assuming adherence patterns observed in recent studies.
• Cost sharing helps but does not fully offset plan cost growth: Introducing a $90 copay reduced premium increases across all scenarios by one to two percentage points but could not fully neutralize the effect of expanded eligibility or perfect adherence.
• Broad eligibility significantly increases cost impact: Expanding coverage to include individuals who are overweight – along with those who are obese or have diabetes – resulted in notably higher premiums due to the increased size of the eligible population.
• While GLP-1s may eventually generate medical cost reductions, these benefits would not be manifested immediately, and there is no evidence to suggest that the savings would fully offset GLP-1 prices. Long-term GLP-1 usage is necessary to achieve weight loss. Furthermore, studies of GLP-1 discontinuation indicate that patients regain weight they lost while taking GLP-1s, and improvement of cardiovascular risk factors regress towards the patient’s baseline, suggesting that GLP-1s may need to be taken indefinitely, which could further increase cost pressures on insurance premiums.

“Looking ahead, the influence of GLP-1s on employment-based health plans is likely to continue to expand as these drugs gain FDA approval for additional indications, such as cardiovascular disease and other metabolic conditions. As the eligible population grows, employers may need to reconsider coverage strategies by potentially introducing stricter eligibility criteria, prior authorization requirements or innovative payment models to manage costs. Without proactive planning, the widespread adoption of GLP-1s could drive substantial increases in premiums, affecting both employers and employees,” concluded Spiegel.

To view the complete research report, “GLP-1 Coverage and its Impact on Employment-Based Health Plan Premiums: A Simulation-Based Analysis,” visit www.ebri.org/glp-1s.