Health fund wobbles on weight-loss coverage

4 minute read

Some private health funds cover private semaglutide scripts, but there isn’t enough data to predict whether the outlay makes business sense.

Patient selection will be key for health insurers looking at subsidising private patient scripts for GLP-1 agonists, as one major fund drops its coverage of Saxenda and Wegovy.  

Private health insurer HBF, the fifth-largest health fund nationally, announced at the beginning of the month that it would be completely cutting benefits for five brands of premanufactured GLP-1 agonists and all compounded GLP-1 agonists on its pharmaceutical extras scheme.  

The remaining pre-manufactured formulations of semaglutide, liraglutide, dulaglutide, exenatide and tirzepatide will draw reduced benefits. 

A particularly interesting aspect is that Novo Nordisk’s liraglutide, Saxenda, and its strong semaglutide, Wegovy, are among the brand names with benefits specifically cut, while its original semaglutide formulation, Ozempic, is not. 

HBF operates nationally but is particularly concentrated in WA, where around 80% of its members are based.   

A spokesman for the insurer told The Medical Republic that the benefits it pays as a proportion of premiums are more than double the industry average.

“HBF’s pharmaceutical benefits have nearly doubled since 2021, with 40% of those benefits paid to just 3% of our policies relating to GLP-1 medications that are increasingly being used for weight loss,” they said.

“As a not-for-profit health insurer, we’ve undertaken a review to ascertain how we balance the pharmaceutical benefits we pay for these medications and anticipated growth in these medications against the impact this will have on future premium increases for our membership as a whole.”

Private Healthcare Australia CEO Dr Rachel David told TMR that pharmaceutical extras coverage of the drug class was just the tip of the iceberg as far as insurers were concerned.  

“Whether health funds choose to provide automatic reimbursement for pharmaceuticals under extras as a consumer benefit is a purely commercial decision for them,” she said.  

“And the sorts of things that they tend to cover on extras are items which aren’t on the PBS but are used quite commonly at a lower price point, like [hormone replacement therapy].  

“For the very high-cost medicines, the [coverage] amount is usually kept too low to be of much benefit to anybody.  

“Really, where I see the future is going for the use of GLP-1 agonists is in a hospital substitution way.” 

That is, instead of semaglutide being funded under the “pharmaceutical extras” banner, health funds may be more interested in funding its use under the “hospital cover” banner.  

“[It could be used] either pre surgery or as an alternative to gastric surgery or as a way of avoiding diabetes,” Dr David said.  

The funding pool for hospital cover is also larger than that for extras cover, she said.  

Ideally, Dr David said, funds would be able to subsidise GLP-1 agonists as part of a wraparound-care model with the aim of changing member behaviour to achieve “a long-term impact” rather than just subsidising the drug.  

Research has indicated that people tend to regain weight after ceasing incretins; it seems unlikely that health funds would be thrilled at the prospect of continuing to shell out cash to keep members on semaglutide for their whole life.  

Given the widespread popularity of the drugs, there’s also concern about people trying to gain access to them for non-clinical reasons.  

Dr David said “weeding out the vanity users” from those who were at risk from complications from obesity was key. 

“The consequences of doing nothing for somebody who is obese and at risk of joint damage, diabetes, heart disease [are big], and the potential benefits [of intervention] in terms of the cost and quality over their lifetime are also very large,” Dr David said. 

“The thing that’s putting [insurers] off is the volume of patients that could be coming forward.”  

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