Illinois expands costly weight-loss drug coverage
A dosage of Wegovy, a drug used for weight loss, on March 1, 2024, in Front Royal, Va. Illinois state employees will get expanded access to the high-priced weight-loss drugs, but that could cost taxpayers hundreds of millions of dollars.
AP Photo/Amanda Andrade-Rhoades
Gov. J.B. Pritzker’s office pushed to expand coverage of high-priced weight-loss drugs for state government’s workforce, a quiet maneuver that could cost Illinois taxpayers hundreds of millions of dollars starting this summer.
These boutique weight-loss drugs have been championed by former NBA star Charles Barkley, comedian Amy Schumer and others because of how they trigger dramatic changes in a person’s waistline. The results can be akin to bariatric surgery but at a prohibitive cost — in some cases, more than $16,000 a year.
In making highly sought-after injectable medications like Wegovy, Mounjaro and Ozempic available to eligible enrollees in the state’s group health insurance program, Pritzker’s administration is seeking an estimated $210 million to fund the first full year of broadened coverage, starting July 1.
That’s when all health insurance carriers involved in the state health program have to cover those drugs for state workers, legislators, judges and their dependents.
Pritzker’s administration says access to the medication will yield important health benefits for those who take advantage of the benefit and would equitably give access to the medication across the state’s insurance plans.
But one economist who has studied the cost impact of this new class of drugs told WBEZ the state’s yearly outlay could cost as much as three times the state’s estimate, depending on the number of people who access the program.
That Illinois may soon experience such sticker shock is classic Springfield — as in, always read the fine print.
In an 899-page budget bill approved the final day of the spring legislative session last May, a four-sentence provision codified for the first time that carriers in the state program “shall provide coverage for all types of injectable medicines prescribed on-label or off-label to improve glucose or weight loss for use by adults diagnosed or previously diagnosed with prediabetes, gestational diabetes, or obesity.”
But who gave the go-ahead to include those four sentences in the bill, adding what could be hundreds of millions of dollars of coverage costs, is difficult to say.
During floor debate, its sponsors in the Democratic-led General Assembly did not discuss the drug coverage, and the bill breezed by lawmakers in both parties.
Multiple legislators said they learned about the initiative after being reached by WBEZ.
“Dropping a bill out of the air on the last day of session with something in it that nobody knows about and then blowing the doors off the budget, that is insanity,” said state Sen. Chapin Rose, R-Mahomet, ranking Republican on the Senate Appropriations Committee who voted against the budget measure last May and said he didn’t know about the measure.
Despite some concerns on cost, coverage quietly pushed through
This class of drugs, known as GLP-1 receptor agonists, have enabled overweight people to reduce their weight by more than 20% over 36 months, one national study has shown.
“By adding coverage for injectable weight loss medications to state health insurance plans, more people will have a chance to eliminate long-term health problems,” said Cathy Kwiatkowski, a spokeswoman for the state Department of Central Management Services, which administers the state health insurance program.
She said those on the state program with pre-diabetes, gestational diabetes or obesity are eligible for the drugs if “deemed medically appropriate by the physician” and that enrollees have to participate in a “lifestyle management program.”
Last year’s legislation did not apply to the 3.9 million low-income and disabled Illinoisans enrolled in Medicaid, a population that generally struggles with obesity at higher levels than the overall population. State retirees enrolled in Medicare Advantage plans through the state group plan also were not made eligible for coverage.
Leading up to last spring’s budget vote, the governor was silent about the provision, not addressing it in either his February 2023 budget address or after he signed the budget into law.
Within Pritzker’s office, the idea of covering these drugs appears to have originated with the governor’s chief of staff, Anne Caprara, according to emails obtained from the governor’s office by WBEZ under the state Freedom of Information Act.
Records show on Feb. 1, 2023, Caprara emailed several key staffers in the governor’s office to convene a meeting “for a discussion about state health insurance coverage (as well as other health insurance plans) of drugs like Ozempic, wegovy (sic) and mounjaro (sic).”
There’s no record in the documents turned over by Pritzker’s office of any involvement by the governor himself in the decision to cover the drugs. Pritzker spokeswoman Jordan Abudayyeh said in an email that the governor was made aware of the need to expand coverage and reviewed the budget implementation bill.
There’s also no record of involvement in the emails by state government’s largest employee union, AFSCME Council 31.
Ahead of the measure’s legislative passage, the emails showed there was at least some recognition internally within the governor’s office about the initiative’s cost.
Aides to Pritzker, including Caprara, were included in a May 5, 2023, email from the cabinet secretary whose agency manages the state health insurance program. CMS director Raven DeVaughn assessed “cost implications” of covering injectable weight-loss drugs.
But in records provided to WBEZ, the Pritzker administration blacked out what DeVaughn said to the group. The administration redacted and withheld documents, saying they were draft records or recommendations, or pertained to personal privacy.
In another instance, Pritzker’s budget director, Alexis Sturm, appeared to question why the measure had been inserted into the budget implementation bill at all.
“That had been flagged as potentially having a pretty high cost,” she wrote to a Democratic staffer and various key aides two days before final passage of the bill.
“We don’t need this in the BIMP right now,” Sturm told the group, referring to the budget implementation bill.
But it went into that bill anyway.
“Equity” is the aim, governor’s office says
Abudayyeh said the administration’s aim with the initiative was to achieve “equity” among all nine different health insurance plans offered by the state to its employees. She said two insurance carriers were not covering the drugs.
Abudayyeh said her boss, Caprara, saw a media report about the difficulty a government worker in another state was having obtaining the injectable weight-loss drugs. Abudayyeh said Caprara wanted to be sure the state workforce here “wouldn’t face the same challenges in obtaining these medications.”
The administration’s $210 million ask to expand coverage of injectable weight-loss drugs is part of a major projected escalation in health care costs associated with the state health insurance program. It’s expected to have nearly $3.8 billion in total expenses in the fiscal year that begins in July.
Last month, a report by the Commission on Government Forecasting & Accountability, the non-partisan fiscal research arm of the legislature, cited coverage of the weight-loss drugs as one driver of a nearly 17% increase in state group health insurance liabilities for the upcoming state fiscal year.
Abudayyeh stressed that the $210 million estimate for the injectable weight-loss drugs may not fully materialize.
“Because these medications are new, that number is an estimate, and it is possible this ends up costing less” she said.
Still, one expert says that cost could get much higher.
Much higher cost estimates
Nationally, these high-priced drugs are not fully paying for themselves through lessened costs for obesity-related maladies. One group of researchers recently warned in a New York Times piece that the drugs could be government budget-busters and pose “an enormous risk to America’s taxpayers.”
Using an economic formula he and his co-authors developed, Ryan Cummings provided to WBEZ cost estimates for Illinois’ program that under certain scenarios are substantially higher than the Pritzker administration’s estimates.
The net cost to Illinois could range between $300 million and more than $461 million if half of the eligible individuals on the state program that are estimated to be obese partake in coverage, said Cummings.
At the upper range, Cummings said the state could have to spend as much as $590 million, and those expenditures would then be offset by slightly more than $129 million in health-related savings.
Cummings said if the costs outstrip health-related savings — and if prices of the drug don’t drop — the Pritzker administration would face tough decisions.
“Do you have to raise taxes? Or do you tell people who are on it, sorry you’ve got to get off it now and you’re going to gain your weight back,” he said. “There are a lot of invidious choices if we can’t figure out…a way to get the cost of this drug down.”
Abudayyeh dismissed Cummings’ calculations.
“You’ll have to forgive us for not taking seriously back of the napkin cost analysis from someone who does not know the particulars of the state insurance plans,” she said.
Legislative transparency in question
Veteran state Rep. Fred Crespo, D-Hoffman Estates was frustrated that he had to learn about the mandate from a news reporter.
“Something like this just illustrates how dangerous it is to put things in the BIMP bill of this magnitude,” Crespo said.
In February, Crespo introduced legislation requiring that any expensive new add-ons to end-of-session budget implementation bills go to House and Senate appropriations committees at least two business days before being heard.
“I just wonder how many other things are in that BIMP that we don't know about,” Crespo said.
Abudayyeh, however, said that’s on legislators for failing to do their homework.
“Perhaps the better question is why lawmakers who are on budget writing committees don’t know what is in the publicly available bills they are voting on and then signed into law,” she said.
Asked if there had been any movement or signs of support from Springfield’s powers-that-be on his bid for new legislative transparency, Crespo responded dryly, “Take a guess.”
In other words, no.