Weighty Matter: Obesity, GLP-1s and the Rising Cost of Healthcare

America has a weight problem. And we’re paying for it in the rising cost of medical care.

As Alera Group reports in our 2025 Employee Benefits Market Outlook, “The demand for expensive GLP-1 medications for weight loss and specialty medications for chronic conditions continues to impact employers, as the role of pharmacy benefit managers (PBMs) in pricing and contracts is gaining scrutiny.”

GLP-1s and PBAs aren’t the only drivers of rising healthcare costs, of course. An earlier Alera Group publication, our 2024 Healthcare and Employee Benefits Benchmarking Report, notes that inflation, those aforementioned specialty medications and other factors play a role as well, leading employers to explore alternative solutions to funding healthcare, such as Captive Insurance.

But obesity and health problems associated with it — including heart disease and stroke, high blood pressure, several types of cancer, osteoarthritis, sleep apnea and more — are primary factors that must be considered as employers seek to contain healthcare costs for their employers, as well as for themselves. 

Corroborative findings

The findings detailed in the Alera Group reports are supported by a recent United Healthcare and Health Action Council (HAC) study titled The obesity epidemic: Growing health impacts and cost implications. Findings include the following:

• The rate of obesity doubled among U.S. adults between 1990 and 2021, to about 40%.
• Seventy-five percent of U.S. adults are now overweight or living with obesity — up from 50% in 1990. 
• In 23 states, more than 1 in 3 (35%) people live with obesity.
• Across all 50 states, at least 1 in 5 (20%) adults are living with obesity.

HAC, which represents about 230 self-funded employers in both the public and private sectors across the U.S., notes that while 26% of its individual members have been diagnosed with obesity, those among that 26% account for almost half (46%) of their employers’ total healthcare spend.

The conclusion is inescapable: Reduce obesity rates, and a reduction in healthcare spend is likely to follow.

How benchmarking helps

Benefits benchmarking is the process of comparing an employer’s offerings to other group parameters. Alera Group’s Benchmarking Reports — including the 2024 version currently available on our Benefits Benchmarking webpage and the 2025 edition that will replace it there in June — examine employer offerings and strategies across the nation and regionally, as well as by industry and employer size.

Key findings of our 2024 report — based on a survey of more than 5,000 U.S. employers — included:

1. Among healthcare coverages, Medical plan rates continued to rise, though Dental Insurance rates remained steady. 
2. A growing number of employers offered tiered levels of coverage for prescription drugs, in large part to contain costs associated with specialty medications. 
3. The strategy of offering tiers of pharmacy plans extended to benefits in general, as employers broadened their range of offerings, including voluntary, or supplemental, benefits. 
4. Self-funding was an increasingly popular alternative solution for managing healthcare benefits, particularly among organizations with more than 100 employees. 
5. Employee eligibility for benefits varied based primarily on industry, company size and location. In the technical services sector, for example, 25% of new employees became benefits-eligible on their date of hire. Manufacturers, meanwhile, were attempting to control costs by delaying benefit eligibility, with only 7% offering benefits on employees’ date of hire.

Whatever the particular challenges and needs your business faces, seeing what options are out there and comparing your benefits program to what peers and competitors are offering can help you choose the solutions that are best for your organization.

As Brian Rooney, regional benefits consultant for Alera Group Northeast, notes in the 2025 Employee Benefits Market Outlook, “Employers need to be mindful of simply increasing employee contributions to offset rising premiums. Before making changes, employers should work with their broker to benchmark their program and make sure what they’re offering is competitive, as it can vary widely by industry, region and company size.”

PBMs, biosimilar alternatives and tiered plans

The Association of Health Care Journalists recently highlighted two reports by the Federal Trade Commission that underscored the importance of choosing the right pharmacy benefits manager and offering pharmacy formulary tiers to control costs, writing: “In the latest report, Specialty Generic Drugs: A Growing Profit Center for Vertically Integrated Pharmacy Benefit Managers, the FTC staff reported that the three largest PBMs drove up the price of specialty generic drugs for patients with cancer, multiple sclerosis, HIV and pulmonary hypertension by more than 1,000% in some cases and  by hundreds of percent in other cases.”

To paraphrase colleague Bob Eisendrath, leader of Alera Group’s national pharmacy management practice, employers should partner with their broker to conduct an annual audit of their organization’s pharmacy claims and market conditions to monitor pricing. The results of that audit should then inform contract negotiations with their PBM, to ensure proper pricing in their health plan’s formulary.

Biosimilar drugs — ones that are similar in form and function to the specialty medication on which they’re based but, unlike generic bioequivalents, are not identical — are typically less-expensive options that should be part of well-designed Rx plan. A tiered plan enables employers to offer both specialty drugs and, for a lower contribution, biosimilar alternatives.

As we report in our 2025 Market Outlook, tiered pharmacy coverage has become increasingly popular, with 46% of employers offering four tiers and 18% offering five in 2024.

How many tiers should you offer to contain your and your employees’ healthcare costs? That depends on your organization’s goals, as well as on market conditions and the standards for your industry, region and business size. Alera Group’s Benefits Benchmarking page is a good place to launch your research.

VISIT THE BENEFITS BENCHMARKING PAGE