Prescription drug prices are a major barrier to affordable health care. A classification of diabetes management drugs – commonly known as GLP-1 agonists– have specifically contributed to a spike in health insurance spending – from 2022 to 2023, the costs for GLP-1 drugs paid on behalf of our members grew by more than $350 million.
In 2024 Blue Cross Blue Shield of Michigan informed members and physicians about a change in coverage for GLP-1s.On the surface, GLP-1s promise weight loss, lower blood pressure and a reduced risk of heart and kidney disease, according to the Cleveland Clinic. But they are incredibly expensive and their long-term risks are still unknown.
The change in Blue Cross Blue Shield GLP-1 coverage excludes those drugs from insurance coverage for members who seek to lose weight and whose employers are enrolled in our fully insured commercial health plans. Here’s more about why we made the change.
Prescription drug prices present a barrier to affordable health insurance.
First and foremost, our members and customers count on us to be responsible stewards of their health care dollars. All the health care services we pay for – and we pay an average of $100 million per day – are factored into the future premiums and administrative fees we charge.
Do you know that Blue Cross paid almost 15% more for our members’ pharmacy claims in 2024 than we did in 2023? That’s in contrast to just a 3% inflation rate in the United States during the same period.
Unregulated prices charged by drugmakers and monopoly status for many of the most expensive drugs are the reasons why skyrocketing drug prices continue to put strain on your health insurance premiums.
Prescription drug prices in the U.S. are expensive. U.S. prices for brand-name drugs were at least three times as high as prices in comparison countries. GLP-1 drugs alone produced $1.1 billion dollars in claims in 2024, more than a 29% increase from 2023.
Unlike hospitals and insurers, which are highly regulated, drug companies set their own prices without accountability.
It’s imperative that we pay for health care services that help members – without adding excessive costs that impact the affordability of health coverage for all members and customer groups.
We strive to preserve coverage for other lifesaving procedures for our members.
We also have a responsibility to pay for services that are clinically appropriate, peer reviewed and have strong track records of success. We are advocates for our members’ health – and we need to balance that advocacy with our responsibility to promote appropriate, affordable care.
It is a balancing act with which we are entrusted every day. Which is why our decision to phase out coverage of glucagon-like peptide 1 (GLP-1) weight loss drugs such as Wegovy, Zepbound and Saxenda for large group, fully insured members has been so difficult.
We understand that this decision puts GLP-1 options out of reach for some members who seek the drugs for weight loss. Yet, this decision helps to preserve availability of these same drugs for those with Type 2 Diabetes who need it to survive. This decision helps to preserve coverage for other lifesaving procedures and treatment options for the 5.2 million people who count on their Blue Cross health coverage.
Other factors that contributed to the coverage change.
While health insurance affordability is paramount, this wasn’t a cost decision alone. We also looked at efficacy – how successful these prescribed drugs are in reducing weight on a population-wide basis.
There are many stories of individual weight loss success. Behind the scenes, however, is health care claims data that troubles us.
GLP-1s are a class of medications that help patients treat type 2 diabetes by managing their blood sugar. The drugs are also effective in promoting weight loss if taken according to their treatment plan, which means patients should take the drugs continuously for at least 12 weeks. However, a national Blue Health Intelligence study from the Blue Cross Blue Shield Association finds that more than 30% of patients dropped out of treatment after the first four weeks and 58% of patients taking the medications for weight loss discontinued use before seeing a clinical benefit.
The Blue Cross and BCN decision brings the company in line with other health insurers in Michigan and across the country. Additionally, Medicare does not cover the GLP-1 medications for weight loss.
This was not an easy decision, and we understand the impact it will have on some members who are currently using GLP-1s for weight loss. After exhaustive review of the costs and consideration of long-term impacts and effectiveness of the drug, we believe that this is the right decision.
New prior authorization requirements for coverage of these GLP-1 drugs for large group, fully insured members are in effect for those who are 18 or older and have a body mass index of 35 or higher. Blue Cross and BCN will continue covering GLP-1s prescribed to treat Type 2 diabetes, including the medications Ozempic, Mounjaro, Rybelsus and Victoza.
Editor's note: This blog was revised to include updated information on May 29, 2025.
Learn more about Blue Cross Blue Shield of Michigan's commitment to affordability here.
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