Boston Considers Ending GLP-1 Drug Coverage Amid Rising Health Costs
The administration in Boston is evaluating the discontinuation of GLP-1 drug coverage for weight loss under the city's health plan, due to rising health insurance costs impacting the municipal budget. Ashley Groffenberger, the Chief Financial Officer, informed the Boston City Council of significant increases in employee health insurance premiums for fiscal year 2027, largely driven by the growing use of GLP-1 medications such as Ozempic and Wegovy.
The city projects a 22.6% rise in insurance rates for the upcoming fiscal year. Anticipated costs for employee health insurance are expected to swell by nearly $80 million over fiscal year 2026, covering around 55,000 individuals, encompassing city employees, Boston Public Schools, and the Boston Public Health Commission. This represents a sharp increase from the average annual rise of $10.6 million over the past eight years, according to Groffenberger.
Groffenberger noted that several factors contribute to the escalating healthcare costs, prominently the prescription of GLP-1 medications for weight loss. Though only 7.7% of non-Medicare plan members use these drugs, they account for approximately 14.7% of the projected cost increase from FY26 to FY27, with costs expected to rise from $31.6 million to around $47.4 million.
Efforts to preserve coverage through utilization management—a standard cost-control practice—were rejected by union leadership, who represent city union members and retirees. This approach could save the city between $8 million and $9 million annually. However, the proposal was declined after a union vote, underscoring the need for continued negotiation with the Public Employee Committee (PEC).
Groffenberger highlighted potential hardships if no changes occur, with employee health insurance rates poised for historic increases. For instance, an employee may face a monthly premium spike from $655 to $803, indicating a $1,733 annual rise. Elissa Cadillic, PEC co-chair, argued against the financial efficiency of utilization management and stressed the requirement for proper bargaining processes.
The city has urged PEC leadership to revisit its cost-saving plan for GLP-1 coverage by Friday. The administration is seeking collaboration on a fiscal strategy that balances employee needs with financial responsibility, aiming to prevent measures such as transitioning to the Commonwealth’s Group Insurance Commission, which has already opted out of covering GLP-1 for weight loss.
As Boston addresses limited revenue growth, projected at 1.5% to 2%, the city continues to explore further cost-reduction strategies as part of its fiscal plan for FY27. The administration remains committed to finding sustainable solutions to manage rising health insurance expenses while safeguarding employee welfare.