Fort Worth is tackling the rising costs of employee healthcare, especially around weight loss medications like Ozempic, Wegovy, and Zepbound. These drugs are contributing significantly to the city’s healthcare expenses, which are predicted to have a $30.6 million shortfall in the next fiscal year.
City Manager Jay Chapa pointed out that a large part of the financial strain comes from skyrocketing prescription claims. The city currently supports more than 11,000 employees and their families through a self-insured health plan. If no changes are made, both the health fund and the city’s general budget will face more pressure.
More than 40% of the city’s pharmacy costs come from GLP-1 medications, amounting to over $7 million in just six months. As of April, the number of participants using these drugs increased by 33%, suggesting a growing reliance on them. The situation raised concerns among city council members, with debates focusing on whether limiting coverage for certain medications could lead to higher costs in the long run, particularly for related health issues.
Council members noted that these medications help manage conditions like obesity and high blood pressure, which could save the city money in the future. Elizabeth Beck highlighted the importance of understanding how these drugs might prevent more serious health conditions down the line.
Proposed changes could restrict coverage for Wegovy and Zepbound, meaning employees would have to pay fully for these medications if they are used solely for weight loss. Meanwhile, Ozempic could remain covered if prescribed for diabetes.
Kristen Smith, the city’s HR director, mentioned that GLP-1 medications are becoming more affordable and accessible, especially with the introduction of oral versions. However, these are still likely to spike usage and costs.
To manage this situation, HUB International suggested a three-part approach over three years, focusing on increasing funding rates and redesigning insurance plans. The council appears open to solutions that also encourage healthier choices among employees, like promoting better nutrition and reducing unnecessary emergency room visits.
Overall, the city’s strategy will evolve as it seeks to balance rising healthcare costs with the well-being of its employees. This situation isn’t unique to Fort Worth, as healthcare expenses are an ongoing issue across many organizations and municipalities in the U.S.
For more insights into managing healthcare costs and programs, you can refer to resources from the Centers for Disease Control and Prevention and the National Institute of Health.
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