Michigan health insurers are considering raising premiums again next year, citing surges in demand for expensive diabetes and weight-loss drugs such as Ozempic and Wegobee contributing to the necessary increases.
a report The Michigan Department of Insurance and Financial Services, which reviews and approves premium rates for insurers, has announced that health insurers will pay an average of 7.1% for small group policies (for businesses and organizations with fewer than 51 employees) in 2023. They are asking for a price increase. Currently, 428,328 Michigans are enrolled in such plans.
For individual policies, also known as Obamacare, sold on the Healthcare.gov website, insurers are asking for an average 5.5% increase. These plans currently cover 372,999 Michigan residents.
Last year, state regulators rate hike approved It averaged 5.8% for small groups and 5.5% for individual plans.
Blue Cross Blue Shield Inc., a Michigan-based insurer, said the rate hike was necessary because of “pharmacy costs tend to be higher than average.”
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Some of these costs are related to the growing class of GLP-1 injectables used to treat type 2 diabetes and obesity.
Blue Cross chief pharmacy officer Asir Kaddis said in an interview Monday that insurers have started noticing a significant increase in demand for this class of drugs since the end of last year.
Some drugs, such as Ozempic, are specific to type 2 diabetes, but they also suppress appetite and have significant weight-loss side effects. Other services, such as Wegovy, are specifically aimed at weight loss and not primarily diabetes.
Cádiz said two factors driving the demand were new diabetes treatment guidelines recommending Ozempic-type drugs as first-line treatment, and widespread publicity on social media about the weight-loss benefits of various drugs. rice field.
Some doctors prescribe diabetes drugs for off-label use in patients who are not diabetic and just want to reduce their waist size.
“They are very effective for weight loss,” Cadiz says. “Most people see him lose 10 to 15 percent of his weight when he takes these drugs.”
But drugs are not cheap. List prices for popular GLP-1 drugs are around $1,000 to $1,200 per month, or $12,000 or more per year. Health insurance companies usually pay less than the list price, but exactly how much less is usually not disclosed.
Since February 1, Blue Cross has required pre-approval for its GLP-1 diabetes drugs, including Ozempic. The move was made to ensure that only diabetics could administer the drug, not those who simply wanted to lose weight.
However, Blue Cross continues to cover off-label use of Ozempic-type drugs through August 15 for patients who were on Ozempic-type drugs before February 1. Blue Cross found about 25% of patients had off-label use, Cadiz said. Diabetes drugs used them off-label.
The Health Alliance Plan also suffers from high pharmacy costs due to the popularity of GLP-1 drugs.
HAP senior vice president Margaret Anderson said insurers believe the drug will ultimately have positive effects on the overall health of patients taking it within the next 12 to 18 months. “So we’re paying that upfront cost right now,” he said. “
HAP does not currently offer Ozempic-type drugs to patients who do not have diabetes but want off-label use, he said.
“We’re working hard to make sure these drugs reach people who really need them,” said Anderson. “Some people ask if they can pay out-of-pocket. That’s between the person and the doctor.”
Certainly, weight loss pills aren’t the only reason health insurers want to raise premiums in 2024.
Blue Cross has also seen a significant increase in price and demand for Humira, a specialty drug used to treat cirrhosis and dermatitis. Across The Blue’s business book in early 2023, pharmacy costs increased by more than 20%.
HAP aims to raise prices for its small group health plans by 12.8% in 2024, largely due to growing demand for preventive care, health checks and other services.
“We’re seeing very high utilization,” HAP’s Anderson said. It’s a system that we need to solve. “
The Department of Insurance and Financial Services is accepting public comments on the proposed rate hike until July 24th. Comments can be sent to the email address [email protected].
Contact JC Reindl: 313-378-5460 or [email protected]. follow him on twitter @jekrain dollar.
