BOSTON — State health plan overseers are pushing back against potential plan design changes that would shift more costs onto enrollees, particularly a staff recommendation to help close a large budget gap by eliminating coverage for GLP-1 weight loss drugs.
The Group Insurance Commission is slated to vote on fiscal year 2027 benefit changes next month. But staff and commissioners hashed out some of the thorny choices Thursday morning to tamp down on surging health care costs, which could involve nixing coverage for GLP-1 drugs to treat obesity, increasing urgent care and ER copays, reducing hearing aid coverage, and raising the surviving spouse contribution rate.
“Clearly, many of these proposals are increases to member cost-sharing, something that we as an organization have avoided doing now for eight years,” GIC Executive Director Matt Veno said. “We’ve done that as a strategic decision, and we know that these steps do not address underlying drivers of rising health care costs. But given the budget challenge this year, these changes are necessary to achieve alignment with the governor’s coming budget proposal. Even with these changes, it is important to note that the GIC’s plan design will still compare favorably, from a member perspective, to much of the rest of the market and are not unreasonable, therefore, for the commissioner to consider.”
Gov. Maura Healey is expected to unveil her fiscal 2027 budget on Jan. 28. Without any plan design changes, the GIC’s budget request would rise by $170 million, Veno said.
“We’ve been given an aggressive target from A&F, and that target is to cut essentially $120 million out of our spend,” Veno said. “That would be directed towards keeping us to an increase of about $50 million.”
Implementing all of the proposed benefit changes would nearly close the gap, Veno said. Pursuing all the changes aside from eliminating GLP-1 coverage for obesity would leave the GIC with a roughly $50 million gap.
A record number of municipalities are newly enrolling in GIC coverage, with the majority coming from the Hampshire County Group Insurance Trust. While Veno said 13 entities were joining last month, that number is now down to 11. A GIC official said two entities — the Chesterfield-Goshen School District and the Hampshire Regional School District — did not meet a Jan. 5 deadline to submit additional paperwork.
The GIC is also staring down a $153 million “budget exposure” in the current fiscal year. Veno said the agency is working with the Executive Office for Administration and Finance on a supplemental appropriation and expects a legislative package to be filed “early this spring.”
Margaret Anshutz, the GIC’s director of health policy and analysis, noted GLP-1 drugs are “highly effective” and reduce the likelihood of people developing conditions associated with obesity, particularly among communities of color.
“Continuing coverage directly supports our goal of reducing health disparities,” Anshutz said. “When people stop taking this drug, within about 18 months the weight is returned, and all cardiometabolic gains from the drug are gone. Some members would be able to maintain coverage by paying out of pocket, but of course, the drug is very expensive, so it would be higher-income members with discretionary income who could afford to stay on the GLP-1.”
In the fiscal 2026 budget, Healey vetoed $27.5 million in funding to the GIC and directed the agency to make midyear plan changes to eliminate coverage for GLP-1 weight loss drugs except in cases when medically necessary. The crushing cost and demand of GLP-1 drugs at the GIC were partially responsible for the agency needing an emergency $240 million infusion from taxpayers last year.
At the start of January, the GIC launched a new program with Vida Health to manage prescriptions for GLP-1 drugs, with the arrangement expected to save the state $30 million annually.
The recent federal approval of Wegovy as an oral pill presents new spending challenges for the GIC, Veno said. Members who were previously reluctant to have the injectable form of the drug may now take the pill version, which Veno said could drive higher utilization.
Commissioner Jane Edmonds said eliminating GLP-1 coverage is not “cost containment” but is rather “cost avoidance.”
“I’m deeply concerned that we’re singling out GLP-1 medications, not because they’re ineffective or inappropriate but because they’re visible, and they’re expensive, and they’re frankly politically inconvenient,” Edmonds said.
She warned the recommendation also creates a “slippery slope” for the GIC.
“What if tomorrow there’s a high-cost expensive drug to fight cancer or something else? Are we going to eliminate that kind of coverage because it just costs too much?” Edmonds asked.
Commissioner Bobbi Kaplan called the changes “draconian,” saying if they’re not adopted that commissioners “need to make a stand, really, because there’s money to be found in other areas.”
Commissioner Darren Ambler pushed back against Kaplan’s characterization, arguing the changes are “mild” and “still represent a plan design that is far richer than what we see in the private marketplace.” All carriers for the Massachusetts Health Connector stopped covering GLP-1 drugs this year due to rising costs.
“The reason why insurers are dropping this coverage is because the cost-benefit analysis isn’t there for them,” Ambler said. “If it was, they would keep the coverage. But until the price of these drugs come down, the benefits aren’t there.”