Worth the Weight

Scott Hardie | September 11, 2023
As a big man, I have had conversations with my doctors about the new wave of weight-loss drugs like Wegovy, Ozempic, Mounjaro, and others. I may or may not start taking them. The cost is one sticking point in my case, as it is for so many other people, since these medications are generally not covered by insurance.

Help me understand why.

For-profit insurance companies can reduce their expenses whenever they reject claims or refuse coverage. Sure, that part I get.

But health insurance is a risk-based industry in which customer and provider are contractually bound together. The insurer shouldn't just want to minimize expenses today; they should also want to minimize risks later. If these new weight-loss drugs really are as effective as the early research indicates, then they could help customers avoid a significant number of weight-related medical conditions later in life, which in turn would drastically reduce the later cost for insurers. $1300/month today for the drugs isn't cheap, but it's a lot cheaper than what a morbidly obese customer will cost the insurer in the future.

It's been many years, but I used to work in the health insurance business. I know that they have access to enormous statistical data sets that they can manipulate to make fairly accurate projections. They are capable of thinking in the long term about this.

But rejecting the relatively cheap drug now, when you're on the hook for the later costs of not taking it, strikes me as penny wise and pound foolish. It's like refusing to cover birth control pills when you're also paying for any resultant pregnancy, or refusing to pay for nicotine patches when you'll have to cover a smoker's later medical bills.

The math doesn't add up. The best I can guess is that insurers are factoring in the increasing amount of insurance-shopping that people do in the modern world and figure that the customer will have jumped to some other insurer by the time the big bills starting coming in, or that shareholders are pressuring the companies to put ever-greater emphasis on short-term quarterly gains over long-term financial stability.

Any other guesses?

Erik Bates | October 13, 2023
Some insurance will cover weight loss surgery, though. So, for that one-time hit, they can get the same results (potentially) as a drawn-out monthly medical solution that could take years and cost more. Better for them to encourage the more cost-effective solution by taking the more costly one off the table altogether.

Scott Hardie | October 19, 2023
Thanks! That makes sense. I guess long-term success rate must be a similar part of problem. These new drugs like Ozempic are very effective in the short term, but for most patients, the weight comes back on when they stop taking the drugs. That's true of far fewer patients who have the weight loss surgery.

Samir Mehta | October 21, 2023
I think there are two reasons right now. First, Ozempic was FDA approved as a diabetes treatment with obesity treatment viewed as off-label. So as a practical bureaucratic matter, I think insurance would be nervous recommending it until it’s cleared. I bet this changes in 1-3 years.

Second, relatedly, it’s still early. Some people (ME) are genuinely nervous that the wonder drug will end up mired in litigation as side effects get uncovered. It’s how things work here, partly because of my profession, partly because people generally seek claims. Until risk is fully known, ie be nervous to throw the switch if I was an insurer.

Scott Hardie | October 21, 2023
That makes sense, too. Thank you! I hadn't considered that. I was thinking too much like a potential customer and not like someone in the business.