Obesity in Canada is now recognized as a complex chronic disease. While this classification has been in place for some time, treatment options have primarily involved the off-label use of diabetic medications. The prevalence of obesity in Canada has risen dramatically, from 21% in 2003 to 30% of the population in 2023, and the trend is expected to continue.
With the arrival of Wegovy in Canada in May 2024 as an approved medical weight loss treatment, diabetic medications will no longer be covered for weight loss purposes. Wegovy’s launch signals a shift in obesity treatment, with several other weight loss drugs expected to enter the market between 2025 and 2026. These treatments are currently in the final stages of study, and pharmaceutical companies are preparing to promote them widely, encouraging individuals to consult their doctors about available options.
The Financial Impact on Group Insurance Plans
With nearly one-third of Canadians classified as obese, the demand for these medications is expected to be significant. Since obesity is now recognized as a chronic condition, the costs associated with group insurance plans could rise dramatically. Employers may face additional expenses of $200 to $400 per month per employee for weight loss therapies, leading to a surge in claims and higher benefits costs in the long run.
How Can Employers Prepare?
To manage the financial impact of these changes, employers should consider the following strategies:
Implement Caps on Coverage: Setting limits on coverage for weight loss medications can help control costs.
Adjust Formularies: Updating formularies to reflect new treatments and their financial implications is essential.
Establish a Special Category for Obesity Treatment: Differentiating obesity-related treatments within benefit plans can improve cost management.
Review and Adapt Benefits Budgets: Anticipating rising claims costs and adjusting the budget accordingly can help mitigate financial strain.
Address Mental Health Considerations: Given the strong link between obesity and mental health, expect an increase in paramedical coverage demands.
Seek Expert Advice: Staying informed about evolving pharmaceutical treatments and insurance trends is crucial for making sound decisions.
What Experts Are Saying
A recent study by McMaster University and Hamilton Health Sciences sheds light on the changing landscape of obesity treatment. Dr. Zubin Punthakee, a key participant in the study, highlighted the shift in medical approaches:
"The treatment of obesity is coming into that paradigm where we can offer this pharmacologic therapy on top of non-pharmacologic therapy to get good effects for patients."
For further insights, check out the full study at McMaster University on Weight Loss Drugs.
Is Your Benefits Broker Keeping You Informed?
The benefits landscape is evolving rapidly. Is your broker keeping you updated on these critical changes? If not, now is the time to reassess. These developments will impact your employees, their families, your company, and yourself for years to come.
If you’re looking for guidance on managing these new realities, let’s connect. The Benefit Guys are here to help. Contact us today for expert advice and ongoing updates on key benefits-related topics.
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