00:00 Speaker A
Weight loss drugs like Ompic and Wavi are everywhere right now from celebrity endorsements to water cooler conversations, but behind the hype, there’s a financial reckoning brewing for Americans and anyone who gets health insurance through work. A new study from the employee Benefit Research Institute reveals something striking. If these GLP1 drugs reach even a fraction of the 57 million Americans who are clinically eligible for them, health insurance premiums could jump by as much as 14%. The math is simple but sobering. These drugs cost $600 to $750 per month, and they need to be taken indefinitely, and the pool of people who qualify for them is massive. Today we’re joined by J. O, author of maximize your Medicare to break down what this means for you and your health insurance premiums. Jay, welcome.
00:39 Speaker B
Thanks for having me, Bob.
00:41 Speaker A
So, hot take, what is it?
00:43 Speaker B
First of all, it’s very positive news that the GLP drugs are covered, you know, from my perspective if I’m the employee. And the reason, simple reason is that we very frequently we’ve spoken about Medicare a great number of times. The fact is is that Medicare using kind of like as a reference rate if you will for entire pricing and for example, part D doesn’t cover GLP for anything other than a medical condition. So the positive thing here from the employee’s point of view, and you’ll want to double check these important points here, my hot takes then is first, the employee wants to make sure that the specific medication that there are a number of different GLPs, that doesn’t mean that every plan will cover every specific type of GLP. So you’ll want to have a very specific set of knowledge from your doctor, making sure that your specific plan match up. And if they don’t, then you’ll need to review that with your healthcare professional.
02:08 Speaker B
The ripple effects here are like you pointed out, it’s very, very challenging for everybody. So, when I deal with our consumers, our clients, for example, everyday people, what I tell them is to find out whether or not the employer has an HSA. An HSA account is a way to defray the cost by using pre tax dollars from that account. In effect, and that basically lowers your post tax equivalent cost. That for me is the key. Going forward, the question that you point out, which I agree with is that if you have more people using the medications, this will increase the cost of the fact that the usage is higher at the beginning, the carrier is going to be responsible since it’s going to pay for the benefit, even after you pay for your for example, your co-pay or co-insurance, even after that, the fact is that insurance companies bear the balance of that benefit.
03:49 Speaker B
And in the future, the likelihood of use is used to predict future rates. So I would agree with EBRI in that sense which couldn’t put upward pressure on premiums in the future. The answer is clearly yes, that we’ve seen that it’s not only in employer plans. What employers do though is going to be a little unknown today, whether or not they pass on the cost in the form of lower contribution rates, whether or not they adopt weaker plans in general. That I think remains to be seen.
04:54 Speaker A
Yeah. So speaking of plans, the EBRI research suggested that at the moment, half of employers are uh allowing GLP uh use for diabetes and uh 36% of employers currently cover GLP1s for weight loss, uh, which um, you mentioned Medicare uh typically only covers it for diabetes. So this is an interesting uh development in the employer sponsored world.
05:33 Speaker B
employer sponsored world definitely is different than the way that the individual market and Medicare world works. It does affect, for example, my personal counseling to people because sometimes people ask me, well, I can I just stop my work because I don’t want to go to work and I say, let’s just take a look at what you’re giving up and it’s a very valuable thing which is their benefits package. not to be just overlooked, especially because I don’t want expectations to be set by employees who be who are considering being ex-employees, whether that be retirement, whether or not being facing facing employment status changes. I don’t want them to be shell-shocked. I don’t want them to be blindsided by different cost structures which are almost certainly going to be the case when you leave your large employer plan.
06:40 Speaker A
Yeah. So for my perspective, my hot take is uh that the individual worker should prepare for the potential for increased premiums and also the uh research suggests that they may also face an increase in cost sharing on the order of 90 dollars plus per month based on uh what they discovered in their in their research. So, if you’re the individual worker, uh maybe start budgeting for potentially higher costs for both your health insurance premium and your copays.
07:18 Speaker B
I think that that is definitely the case. We have extreme pressure on healthcare costs for everybody, whether that be individual who is purchasing insurance for themselves, whether or not they’re insured, no matter where you look, the cost pressures on healthcare costs. Generally, the price pressures is definitely increasing. I think we see that. That said, yes, for sure if this is you, I think about how to save money or economically do so meaning the HSA that I mentioned in the past and explore other ways to get discounts above and even above and beyond what your employer provides, which is very good in most cases at large employers. I don’t want to be misunderstood, which means that it is a very great benefit for most in their large employer plan and particularly when it comes to prescription drug benefits, which is if I had to distinguish the way that large employer benefits work, that the best aspect, the superior aspect that that the benefits provide is prescription drug coverage.
09:21 Speaker A
Well, Jay, thanks for shedding light and providing your hot take on this research. I greatly appreciate it.
09:29 Speaker B
Thanks for having me, Bob.
09:31 Speaker A
So the GLP1 revolution in healthcare is coming, whether we’re ready for it or not. The question now is whether employers and insurance will proactively manage it or react to premium shocks.
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