Health insurance enrollment season is in full swing. If you want to buy an ACA plan, now’s the time to browse coverage options. And if you’re insured through work, you might have new or changed plans to review before Q4 comes to a close.
What should you look for in an insurance plan? If you’re taking or plan to take a brand-name GLP-1 medication for weight loss, such as Wegovy or Saxenda, you might want to check the prescription drug benefits for any plans you’re considering. GLP-1s can range from about $25 to over $1,000 per month, and coverage is the main cost determinant. While most commercial plans include some prescription drug benefits, GLP-1 coverage isn’t guaranteed.
Fortunately, you don’t need to be enrolled in a plan to figure out if GLP-1s are covered — and you might even be able to estimate the cost of treatment. In most cases, the information you need is available online, if you know what you’re looking for. This guide to reading Rx benefits can help you choose a plan that meets your needs and your coverage expectations.
(Note: This article discusses ACA and employer-based insurance plans. We will publish a separate article about GLP-1 coverage under government insurance programs.)
Open vs. annual enrollment
Open enrollment is an ACA-specific term. It’s the designated annual period to purchase coverage for yourself or your family through your state’s health insurance marketplace (aka “exchange”). This year, open enrollment started November 1 and runs through January 15, 2024, although some states have slightly different deadlines. (Here’s a state-by-state list.) You can also buy an “off-exchange” plan directly from a broker or insurance company. Some are identical to ACA plans, while others aren’t ACA-compliant and offer skimpier coverage. Off-exchange plans don’t need to be purchased during open enrollment.
Employer-based plans also have annual enrollment periods. Employers aren’t bound to specific dates, but they often schedule enrollment toward the end of the year. Early November through mid-December is a popular window. During enrollment, you can review changes to current plans and vet any new offerings.
In either scenario, you’ll need the same information about a plan’s prescription drug benefits to get a sense of whether and how GLP-1s are covered.
The basics of Rx benefits
Most commercial health plans have at least some prescription drug coverage, but it can vary in several ways. To assess a plan’s coverage for one or more specific GLP-1s, you’ll need two documents: the formulary and the summary of benefits and coverage (SBC).
Key document #1: plan formulary
A formulary, also called a “preferred drug list,” lists every drug that a plan covers. Formularies might also specify coverage restrictions for drugs and/or list excluded drugs (the ones they don’t cover).
Formularies are updated every year, and sometimes even more frequently. “This is a living, breathing document, so it’s important to look at the newest version,” says Josh Charette, a revenue cycle specialist at Brightline, a telehealth company that offers behavioral health coaching and therapy to families.
Make sure to check the 2024 formulary for any plan you’re considering.
Key document #2: summary of benefits and coverage
Compared to a plan formulary, an SBC is a broader document that outlines covered and excluded medical services, coverage examples for two common medical situations, and more. There’s always a section on prescription drug coverage, where you can learn how drugs are grouped into coverage tiers for pricing purposes, and how cost-sharing is structured for prescriptions.
Coverage tiers: Plans categorize the drugs they cover into pricing groups, often called “tiers.” The out-of-pocket cost for medications increases by tier, but tier structure varies by insurance company and plan. A drug could be in Tier 1 in one plan and Tier 2 in another. Some insurance companies, like Aetna, don’t use the term “tier” at all. Most SBCs lay out their coverage tiers with corresponding pricing info. Here’s an example:
Tier 1: Generic drugs / $10 copay
Tier 2: Non-preferred generics and preferred brand-name drugs / $30 copay
Tier 3: Non-preferred brand-name drugs / 40% coinsurance
Tier 4: Specialty drugs (for more serious and/or less common medical conditions, which might not have generic equivalents) / 50% coinsurance
This is a simple example; tier structure and pricing formulas can get complicated. Here are three (of numerous) variations you might see:
- Specialty drugs sub-categorized into “preferred specialty” and “non-preferred specialty,” with non-preferred drugs costing more because generic equivalents are available.
- Different prices for medications prescribed by in-network and out-of-network providers.
- Different prices for medications filled at in-network and out-of-network pharmacies.
Cost-sharing: Cost-sharing for prescriptions can get complicated, but the most basic thing to know is whether or not there’s a deductible.
If a plan does not have a deductible, you’ll have copays and/or coinsurance for prescriptions. That means your insurance company will cover most of the cost of your medication, and then you’ll pay a portion too. A copay is a fixed price, whereas coinsurance is a percentage of the price of the prescription. For example, you might have a $10 copay for generic drugs, and pay 25% of the cost of the medication (up to $80) for any preferred brand-name drug.
If a plan has a deductible, you’ll need to pay a certain amount out of pocket before coverage kicks in. Some plans have separate medical and pharmaceutical deductibles. The pharmaceutical deductible is typically a lot lower, and it’s the relevant one for prescriptions. After you meet the deductible, you’ll probably have copays and/or coinsurance, unless the plan is considered a high deductible health plan (HDHP).
How to find a plan’s key documents
You don’t need to be enrolled in a plan to access its formulary or SBC.
All ACA plans are listed on the health insurance marketplace website for a given state, and each plan must link out to its formulary and SBC. You’ll need to create a profile with basic demographic information in order to view and compare plans.
Employers are required to provide SBCs for any health plans they offer.
If you already have a plan’s SBC, the prescription drug section might include a link to the formulary. If you only need the formulary, many insurance company websites have formulary search tools for multiple types of plans.
If you can’t find either one of these documents, you can always call the insurance company’s customer service number, which should be listed on its website.
How to estimate the cost of a covered medication
Neither a formulary nor an SBC will tell you how much a specific drug will cost you. But you can use these documents to gauge a drug’s out-of-pocket cost under a given plan.
- Check a plan’s formulary to see if a medication is covered.
- If it is, check its coverage tier, which should be listed next to the drug in the formulary.
- Refer back to the SBC’s prescription coverage section to see how meds in that tier are priced. If you’re only dealing with a flat copay, you might have all the information you need at this point.
- If the out-of-pocket cost is calculated as a percentage of the drug’s total cost, which is more common for higher-tier drugs, look up the list price for the drug (i.e., the retail price without insurance). You can search for list prices on GoodRx.
- Plug the list price into the pricing formula in the SBC. Treat the resulting price as an estimate, not a guarantee.
Once you enroll in a plan, you can more precisely predict the cost of a medication by running a test claim, according to Charette: “It’s the same thing as a regular claim, and it tells the patient their out-of-pocket cost so they know what to expect prior to going to the pharmacy and potentially being let down.” Your insurance company should be able to run a test claim for you if you call and ask. Alternatively, many insurers have third-party pharmacy benefit managers, such as CVS Caremark, to handle prescription coverage questions and services.
Coverage for GLP-1s — fast facts and trends
There are currently two FDA-approved GLP-1s for weight loss on the market: Wegovy (semaglutide) and Saxenda (liraglutide). These drugs are approved for people who have obesity (defined as a BMI of 30 or higher), as well as people who are overweight (a BMI of 27 or higher) and also have a related health condition, such as high blood pressure.
When these drugs are covered, they’re usually categorized as either preferred brand-name drugs or non-preferred brand-name drugs. A plan might cover one or both drugs, and they may or may not be in the same tier. Anecdotally, some plans classify Wegovy as a preferred brand-name drug and Saxenda as non-preferred, making Wegovy a lower-cost option.
A third GLP-1 drug, Zepbound, was recently approved for weight loss, and is expected to become available soon. Zepbound’s manufacturer, Eli Lilly, said the drug will not be on insurance formularies at the beginning of 2024, but that plans will start adding it over the course of the year. Once coverage ramps up, Zepbound should be covered similarly to Wegovy and Saxenda.
Some commercial plans have coverage restrictions for GLP-1s, which may or may not be listed in their formularies. The most common restriction is a prior authorization — PAs are almost always required for GLP-1s. Another possible restriction is step therapy, which means an insurance company will only approve coverage for a GLP-1 if a patient has already tried losing weight through diet and exercise, and they can document their efforts.
Two other GLP-1 drugs, Ozempic and Mounjaro, are approved to treat Type 2 diabetes but not weight loss. With certain exceptions, these drugs are typically not eligible for coverage unless you have diabetes.
What if I can’t get a plan with GLP-1 coverage?
If you enroll in a plan without GLP-1 coverage, you still might be able to access medication for less than full price.
For starters, you can look into copay assistance programs (aka savings card programs), which are sponsored by drug manufacturers. These programs aren’t a guarantee, as eligibility rules and discounts vary by drug and can change over time. Regardless, you can learn more by visiting the drug manufacturer’s site. Here’s info on Wegovy, Saxenda and Zepbound.
If you’re a Sunrise member, your provider can help you find another treatment option that’s both effective and affordable for you. This might be a non-GLP-1 medication. Or it might be compounded semaglutide, a generic medication with the same active ingredient as Wegovy (and Ozempic). You can learn more about compounded semaglutide here.
If you have an employer plan that doesn’t cover GLP-1s, you can send a letter to your company’s benefits or HR team (whichever team oversees benefits) to advocate for a policy change. If you’re not sure what to say, here’s a sample letter from the Obesity Action Coalition.