When Cost Cuts Hurt: Health Plans Dropping Coverage for FDA‑Approved Weight‐Loss Drugs

Imagine finally finding relief in an FDA-approved weight‑loss medication, only to have your insurer drop coverage and leave you shouldering steep costs. That’s the reality for many Americans as major health plans rapidly retreat from covering GLP-1 weight‑loss drugs, despite their proven benefits. Insurers cite cost, yet the impact on patients with obesity or related health conditions is significant. At Gianelli & Morris, we believe access to medically necessary treatment shouldn’t hinge on financial pressure, and medical decisions based solely on cost considerations may border on insurance bad faith. Here’s how this trend is unfolding.

Blue Cross Blue Shield of Michigan Drops Wegovy and Others

Blue Cross Blue Shield of Michigan (BCBS MI), the state’s largest nonprofit insurer covering over 4.5 million members, recently announced it will stop covering three major GLP-1 medications—Wegovy, Zepbound, and Saxenda—for fully insured large groups, effective January 2025. The shift follows tightened prior‑authorization rules as of August 2024, which already imposed stringent criteria, including a BMI of 35 or more, an in-person visit to a prescribing physician, proof of six months of lifestyle modification activities, and participation in programs like Teladoc Health to track their progress.

As a result of BCBS MI’s latest move, nearly 10,000 Michigan members currently using these drugs will lose coverage. Patients face monthly costs upwards of $1,350 out‑of‑pocket, a dramatic reversal after a year or more on a treatment which has shown to be highly effective in reducing risk for serious medical conditions.

North Carolina State Health Plan

Similarly, North Carolina’s State Health Plan took action in January 2024 that took effect in April of last year, formally removing coverage for GLP-1 and GIP‑GLP-1 agonists when used for weight‑loss in obesity. Coverage remains only for FDA-approved indications (like type 2 diabetes). Wegovy and Saxenda maker Novo Nordisk responded by pulling back rebates previously offered to current patients, increasing their costs for prescriptions by more than $50 million. North Carolina’s decision, quietly implemented last spring, reduced access for thousands of eligible public employees and retirees.

More States and Insurers Follow Suit

The move by BCBS MI and the NC State Health Plan is part of a broader trend that can be seen everywhere:

• Massachusetts: BCBS MA ended GLP‑1 coverage for obesity effective January 1, 2025. Large employers can opt‑in with higher plan costs.
• Pennsylvania (Independence Blue Cross): As of January 1, 2025, IBX restricted Wegovy and Ozempic coverage to FDA-approved conditions (diabetes, heart disease), barring coverage for obesity or weight‑loss only.
• West Virginia: A pilot covering weight‑loss drugs for public employees was paused due to $1.4 million/month costs. Coverage continues only for diabetes indications.
• Employer plans nationwide: Many large self-insured employer plans and private insurers (e.g., CVS Health, other BCBS entities) have either restricted coverage or shifted drugs to non-preferred tiers or eliminated them altogether.

Why Patients Are Concerned

These drugs are not optional supplements; they are life-changing therapies. Patients and providers stress that abrupt discontinuation reverses hard-won progress in weight loss and health, risking a resurgence of diabetes, hypertension, sleep apnea, joint pain, and cardiovascular disease. A Massachusetts physician assistant warned in the CommonWealth Beacon that short-sighted cost savings could yield far greater long-term health expenditures.

GLP-1 drugs like semaglutide and tirzepatide are typically priced between $700–1,400 per month. Without insurance, most patients cannot afford them, even though they may be medically necessary.

The Legal & Ethical Dimension

For policyholders, especially those managing obesity alongside chronic conditions, losing access touches on potential bad-faith denial of medically necessary treatment. Health insurers, once able to deny coverage citing high costs, may be ignoring clinical guidelines and failing to maintain minimum health standards. The actions by BCBS and State Plans raise serious legal questions about:

• Violation of parity laws
• Arbitrary policy changes without adequate notice or justification
• Disregard for physician intent and patient well-being

How Gianelli & Morris Can Help

If your California insurer has dropped coverage for an FDA-approved treatment that your doctor deemed essential, you may have a viable bad faith claim. At Gianelli & Morris, we provide:

1. Policy and plan review to identify wrongful exclusions or abrupt policy shifts.
2. Medical documentation support to confirm that there was no safe or reasonable alternative.
3. Strong legal advocacy to challenge denials and protect access to critical treatments.
4. Recovery of damages, including medical costs, emotional distress, and potential punitive awards.

Is Your Coverage at Risk?

Signs that you may need legal help:

• Your GLP-1 drug was abruptly removed from your formulary.
• You face excessive prior‑authorization hurdles or are relegated to non-preferred tiers.
• You’re suddenly asked to self-pay thousands monthly.
• There was little or no plan notification before the coverage change.

This wave of benefit cuts may save insurers money on the surface, but at what cost? Patients who depend on GLP-1 therapies for diabetes, heart health, or disability face real harm and financial ruin. At Gianelli & Morris, we’re here to hold insurers accountable and ensure that medically warranted treatments remain accessible.

Contact Gianelli & Morris Today

Contact us for a free consultation if you’re facing denied coverage in California for FDA-approved weight-loss medications. You shouldn’t have to choose between your health and your wallet.