How to Plan for the Obesity Drug Revolution

In California, for example, UnitedHealth's Optum Rx will cover Wegovy for large employer plan enrollees who go through a preauthorization process.

Anthem will cover the drug through some plans for patients who are obese or who are overweight and have high blood pressure, high blood cholesterol levels or diabetes.

Mississippi and Virginia are examples of states that cover GLP-1 agonists through their states' Medicaid plans.

Washington state lawmakers are considering Senate Bill 6182, a bill that could add coverage for GLP-1 agonists to that state's public employee health plan and Medicaid plans.

The Association of Washington Health Care Plans opposes Senate Bill 6182, based on the argument that a GLP-1 agonist mandate would drive up coverage costs.

Some of the resistance to expanding GLP-1 agonist coverage has more to do with concerns about safety than cost.

"While studies have demonstrated significant weight-loss among carefully selected patients while patients have remained on these drugs, their impact on health long term continues to being studied," Virginia Medicaid program managers note in their discussion of GLP-1 agonist coverage.

Medicare Part D prescription drug plans do not cover GLP-1 agonists, because federal law prohibits Medicare from paying for weight-loss drugs.

Rep. David Schweikert, R-Ariz., the vice chair of the congressional Joint Economic Committee, argues in the committee's latest annual report that Medicare should cover weight-loss drugs.

Roughly one-quarter of the federal government's $900 billion in annual spending on Medicare goes toward treating conditions related to obesity, and people with severe obesity have an average of $9,591 in extra health costs per year, according to Schweikert.

The Senate version of a bill that would let Medicare plans cover weight-loss drugs, the Treat and Reduce Obesity Act of 2023, has 11 Republican co-sponsors and nine Democratic co-sponsors. The House version has 46 Democratic co-sponsors and 23 Republican co-sponsors.

When Reinsurance Group of America held its earnings call for the third quarter of 2023, a securities analyst asked compny executives about how the new weight-loss drugs might affect life insurance claims.

It's probably too early to tell what the long-term impact is," Jonathan Porter, RGA's global chief risk officer, said. "But certainly we're encouraged by the potential effects on both mortality and morbidity."

GLP-1 agonists vs. statins: Guzman has already seen another class of miracle drugs in action: statins.

Statins help prevent heart disease by holding down people's blood cholesterol levels.

One big difference between statins and GLP-1 agonists is that statins take months to have much of an effect, and GLP-1 agonists cause a noticeable reduction in weight in just a few weeks, Guzman said.

The future: Guzman noted that even giant reinsurers depend on outside drug safety research and that insurers should not push people to take a new drug like a GLP-1 agonist.

"This drug has side effects," she said.

She also believes that health care providers and health insurers will have to emphasize traditional kinds of health and weight-loss advice, not just hand out drugs.

She noted that, when she goes to Germany or the Netherlands to work with Munich Re colleagues, "they're way thinner than we are" in the United States.

In addition to eating differently, people there are more likely to bike, and they are much more likely to use stairs rather than escalators or elevators, she said.

But insurers can spread awareness of the existence of the new drugs and start to analyze the implications, Guzman said.

Munich Re, for example, is now coming up with techniques to analyze how the spread of successful weight-loss drugs could affect commercial insurance claims, Guzman said.

What planners can do: Here are five recommendations for insurance, financial and retirement advisors, based on interviews with experts.

1. Offer information. Including information about the new drugs in blog posts or offering discussions about the drugs at seminars might be a good way to get attention.

2. Be tactful. Clients who are obese might not be happy to see financial professionals cheerfully offering them advice about their obesity.

3. Avoid collecting and storing information about clients' weight. Weight information is personal health information and is covered by the Health Insurance Portability and Accountability Act. Given all of the hacking going on, the last thing financial professionals need is for a list of clients' names, email addresses and estimated weights to show up for sale on the dark web.

4. Plan for increased uncertainty about life expectancy. If the new drugs really affect people's life expectancy, researchers could discover that obesity is really a group of health problems, not just one health problem, and the new drugs could help some people lot more than others. That means that the weight-loss drugs could add years to the lives of some clients but do nothing for the life expectancy of others.

5. Consider shifts in resource needs. The clients who do benefit from the weight-loss drugs might need less protection for premature death or disability, but they might need more cash later in life for the kinds of interests that healthy, active people enjoy, such as traveling and going out to eat.

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