Massachusetts State Workers Face Rising Health Premiums, Loss of Weight Loss Drug Coverage
Massachusetts state employees are bracing for health insurance premium increases, even as coverage for popular GLP-1 weight loss drugs is set to be eliminated. The Group Insurance Commission (GIC) recently approved benefit changes aimed at mitigating costs, but premiums are still expected to rise by an average of 7.5 percent for the fiscal 2027 plan year.
The GLP-1 Drug Decision and Cost Concerns
The decision to scrap coverage for GLP-1 medications, used by approximately 22,000 GIC members, was a key factor in attempting to control rising healthcare costs. These drugs currently cost the state around $46 million annually. While the removal of this coverage helped moderate the premium increase, it wasn’t enough to prevent it altogether.
“We recognize that this is still a substantial increase to our members, and it will be felt,” said Margaret Anshutz, the GIC’s director of health policy and analytics. The GIC is currently awaiting $300 million in supplemental funding by mid-April.
How Premium Increases Will Impact Employees
The impact of the 7.5 percent average increase will vary among GIC members. Approximately 96,500 members will see an increase of 4 to 5 percent, while around 49,600 will experience a 7 to 8 percent rise. Nearly 52,000 members will face increases between 8 and 9 percent, and over 12,000 will see premiums jump by 12 to 17 percent.
The premium split between employer and employee depends on factors like hire date and employment status. For active state workers hired before July 1, 2003, the typical split is 80 percent employer-funded and 20 percent employee-funded. Those hired on or after that date generally split costs 75/25.
Beyond GLP-1s: The Broader Picture of Rising Costs
While GLP-1 drugs received significant attention, Anshutz emphasized that they aren’t the sole driver of premium increases. Pharmaceutical spending along with consolidation among healthcare providers, are also contributing factors.
For non-Medicare products, the average premium increase is 8 percent. Plan options with smaller provider networks and lower deductibles, like the Wellpoint Total Choice plan (4.1 percent increase), offer lower premiums, while plans with broader networks, such as MGB Complete HMO (13.6 percent increase), come with higher costs.
GIC’s Vida Health Contract in Flux
Earlier this year, the GIC partnered with Vida Health to become the exclusive prescriber for GLP-1 drugs, aiming to curb spending. As of January 1, just over 11,000 members had enrolled with Vida. Still, following the vote to eliminate GLP-1 coverage, the GIC is now considering the future of this contract, including options to wind it down, allow direct-pay prescriptions through Vida, or implement a short-term “off-ramp” for members.
The GIC plans to communicate its transition plan to members before March 31.
Looking Ahead: Open Enrollment and Plan Options
GIC Executive Director Matt Veno encourages members to explore different plan options during open enrollment, which begins April 1, to potentially discover cheaper coverage.
FAQ
Q: What are GLP-1 drugs?
A: GLP-1 medications are a class of drugs initially developed to treat diabetes, but have become popular for weight loss.
Q: Will the GIC still cover GLP-1 drugs for conditions other than weight loss?
A: Yes, coverage will continue for members using GLP-1 drugs to treat other medical conditions like diabetes.
Q: When does open enrollment begin?
A: Open enrollment begins on April 1.
Q: What is the average premium increase for GIC members?
A: The average premium increase is 7.5 percent.
Did you know? The GIC serves over 460,000 state employees and their families.
Pro Tip: Carefully review all available plan options during open enrollment to find the coverage that best fits your needs and budget.
Have questions about your health insurance options? Share them in the comments below!
Related reading