The GLP-1 Squeeze: How Soaring Healthcare Costs Are Forcing Employers to Act

Employers expect per-employee health benefit costs to rise 8.2% on average in 2027, according to a Marsh survey. (Dreamstime)

Key Points

• A Marsh survey shows employers expect per-employee health benefit costs to rise 8.2% on average in 2027, the highest jump since 2003.
• GLP-1 prescription use accounts for a full percentage point of the overall cost growth projected for 2027.
• The Cigna Group discontinued financial support for GLP-1 weight-management drugs within its own employee health plan during 2026.

As employers brace for a fresh round of rising healthcare costs that outpace inflation, the stakes are getting higher for companies to contain spending on treatments such as popular GLP-1 medications for weight loss.

New survey results from the consultancy firm Marsh released last week show that employers expect per-employee health benefit costs to increase 8.2% on average in 2027—which would be the highest jump since 2003. But the average health benefit would have gone up even more in 2027 at an 11% clip had employers taken no steps to adjust their current insurance plans, Marsh said.

GLP-1 prescription use “accounts for a full percentage point of the overall cost growth for 2027,” the firm said.

Even large health insurers aren’t immune to the costs when it comes to their workers.

The Cigna Group CEO Brian Evanko addressed the company’s own employee benefits—and its suspension of coverage of GLP-1 medications for weight-loss—on a late July investor call.

Like other large employers, “we’re faced with constant trade-off decisions related to the comprehensiveness of our employee benefit programs,” Evanko said on the call. “So we did make the difficult decision during 2026 to discontinue financial support for GLP-1 drugs for weight management within our own employee health plan.”

Cigna will offer a supplemental discount to employees who pay out of pocket for the drugs, Evanko said at the time, adding that the company will still cover GLP-1 medications when they’re prescribed for diabetes.

“We will continue to support our employees on their health journeys through our Omada coaching platform and several other resources for weight management covered by our medical plan,” a Cigna spokesperson told Barron’s.

Recent surveys have illustrated the upward march of healthcare costs heading into next year. Consumer demand for GLP-1 weight-loss medications, such as Zepbound and Wegovy, are hardly the only factor.

Consolidation of doctors’ offices puts upward pressure on pricing, as do specialty drugs and treatment for chronic illnesses such as cancer, according to a survey from consulting firm Segal over the summer.

The projected increase for next year is “heart-stopping,” says Beth Umland, director of research for health at Marsh. The consultancy calculated the per-employee benefit cost at $17,496 for 2025, and will release the 2026 figure later this year.

For now, using the 2025 figure as a baseline, the combined projected increases for 2026 and 2027 point to a per-employee cost around $20,000 next year, she tells Barron’s.

As total costs rise, company coverage decisions around GLP-1 coverage appear to be shifting. Between 2023 and 2025, Marsh survey results showed employers with 500 or more employees steadily adding the prescription coverage to treat obesity.

So far, employer responses indicate that won’t be the case this year. “The trajectory has changed. It was add, add, add, and now it’s going to be flat to maybe declining a little bit,” Umland says, based on initial response data that will be finalized this fall.

But employers who already cover the medication aren’t so much dropping it entirely as they are “tightening the utilization controls” around which employees can access it through health plans and how, says Umland. Some companies may want employees to also participate in a behavior of change program, for instance.

It’s an area “constantly in flux” for health plans as new GLP-1 products and pricing are introduced, says Eric Miller, a vice president and consulting actuary at Segal.

Some employers are looking to see if they can be competitive by adding coverage, Miller says. Meanwhile, companies that already offer GLP-1s for weight loss may try to reduce costs by giving employees financial support to buy the medication through direct-to-consumer channels instead.

“I think employers are always hesitant to reduce coverage” because employees want these medications, says Miller. But there’s a push among health plans to “try to identify those it could benefit the most, or move to something like partial coverage” that helps workers purchase it, he says.

Write to Catherine Dunn at catherine.dunn@dowjones.com

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