Steps Must Be Taken to Prevent Crisis Scenario
For the better part of two years, Mass Retirees has sounded the alarm regarding what we believe to be a growing healthcare affordability crisis. As healthcare costs continue to sharply increase, our concerns have only deepened.
Beyond sounding the alarm over rising costs – which we believe are unsustainable for public retirees, active employees, and public sector health plans to shoulder – it is time for action by public officials and healthcare leaders to gain control over the growing problem.
Our Association will continue to be engaged in this process, ensuring that our members’ collective voices are heard. There is far too much at stake for retirees for us to remain silently on the sidelines.
However, we are far from alone in our deep concerns regarding healthcare costs. Last year, BCBS of MA conducted a poll of 1,000 Massachusetts adults which produced alarming results. Four in ten responded that they put off medical care due to the cost! This is an unacceptable reality that we must face and work to change.
The state’s Group Insurance Commission (GIC), which recently required a $240 million supplemental appropriation to pay medical claims through the end of FY25, has loudly joined the chorus on the dire need for cost containment steps. While the GIC’s deficit was partly a structural function of the Commonwealth’s annual budgeting process, a large portion of the appropriation was needed to cover higher than anticipated costs that stem from higher prices being charged by doctors and hospitals, along with significant increases in prescription drug spending.
HARD CHOICES
One of the contributing factors in the sharp increase in healthcare costs over the past two years are a class of medications found to aid weight loss. Originally developed as a treatment for type-2 diabetes, GLP-1s have become a proven and highly popular weight loss drug – albeit with a high price tag. The high cost, combined with substantially growing popularity, has forced private health insurance companies like BCBS of MA and Point32 to announce restrictions in coverage.
Municipalities insured through both plans will be able to choose whether to continue covering the medication for weight loss in 2026.
At the state level, the GIC has announced that it is also taking steps to control the costs of GLP-1s. The May Commission meeting included a presentation focused on out-of-pocket costs and GIC spend trends (see related article, p.4). The trends surrounding the coverage of GLP-1 agonists for weight loss were highlighted as part of the presentation. It was noted that that the GIC spend and utilization of these medications for weight loss increased steeply beginning in calendar year 2024 and continue to rise steadily in 2025 (similar to cost increases cited by private sector plans). The data presented was updated through February of 2025 and indicated that approximately 11 thousand non-Medicare members were utilizing the drug for weight loss, equating to approximately $15 million per month in GIC spend. As a result, the GIC has launched a workstream to explore solutions that would reduce spending and maintain access to the drugs.
The GIC currently covers all options of drugs as a tier two prescription with a copay of $30 for a 30-day retail supply and $75 for a 90-day mail order supply. Coverage will change as of July 1 due to a formulary update by CVS Caremark. CVS Caremark announced that as of July 1, 2025, they will remove Zepbound from coverage for weight loss, with Wegovy and Saxenda remaining preferred, due to lower unit costs. It was shared that GIC staff is working closely with CVS concerning their communication outreach to affected members and their prescribers and confirmed that an exception process is in place for members on Zepbound who are not able to take Wegovy. Staff are also working closely with CVS to determine the impact on GLP-1 spend for weight loss, which exceeded $17.5 million in March alone (excluding rebates).
Now is the time for collective action and we will do our part in representing our members.
With a growing number of life-changing specialty drugs in development and in FDA approval pipeline, it is logical to assume that the debate surrounding cost vs. coverage will only continue. Using past practice as a guide, new life altering medications will continue to come with the very high price tag, as the free market that exists in the United States allows drug manufacturers to set the price of their products without restriction or controls.
This places insurers in a difficult position of simply accepting higher costs, which are then paid by enrollees and plan sponsors (such as the state and municipal governments) or restricting coverage.
The same hard choices exist when it comes to the prices proposed by doctors and hospitals. All insurance providers contract with doctors and hospitals regarding the price of the services provided to enrollees. Along with the cost of prescription drugs, the cost of medical services (medical spend) has sharply risen over the past two years.
Like drug costs, increases in medical spend are also passed on to enrollees and plan sponsors through higher premiums and, in some cases, increased out-of-pocket costs.
As we have said, while Massachusetts has some of the best doctors and hospitals in the world, it does retirees no good if you cannot afford your monthly premium or pay for the copayment/deductible charged to access care.
For all the reasons stated above, we believe that public retirees (amongst others) have reached a tipping point whereby the cost of healthcare now exceeds affordability. The result is what can only be described as a crisis of affordability.
While we will not pretend to have the solutions to the problem, we do know that the status quo is not an option. We also firmly reject the belief that the solution exists in cost shifting. Forcing retirees and employees to pay higher copayments and deductibles, or a greater share of the monthly insurance premium, does nothing to address the fact that the price of healthcare is too high and growing at an unsustainable rate.
We applaud the legislature for steps taken last session, and that are in the works during the current legislative session, aimed at controlling costs and reforming our healthcare system. Mass Retirees will continue to work with our public sector allies and seeks to join with colleagues representing private sector employees and employers in a combined effort to support beneficial changes to our healthcare marketplace.
If real steps are not soon taken to gain control over costs and reform healthcare, it will come at the expense of public retirees who will undoubtedly become the first targets of cost shifting.