Latest news with #RubyKam
CBS News
18-04-2025
- Health
- CBS News
Blue Cross Blue Shield of Massachusetts will stop covering popular drugs for weight loss. Here's why.
They have skyrocketed in price and popularity and now they are being blamed for crippling budgets in the public and private sector. As one of the fastest growing classes of medications, GLP-1 weight-loss drugs were originally brought on the market to treat diabetes. But their secondary use as a way for users to suppress diets and slim down sent sales through the roof. On Thursday, Blue Cross Blue Shield of Massachusetts announced that starting January 1, 2026, standard coverage plans will not cover GLP-1s for weight loss. The company will continue to cover patients who are using the drugs for diabetes treatment. Studies suggest 1 in 8 people have used GLP-1s as the drugs are becoming more and more common and that has given drug companies the reason to increase prices. Blue Cross Blue Shield said in 2024, five GLP-1 drug companies accounted for 20% of their total pharmacy spend which topped $300 million last year. That's double the year prior. In a statement the company's CFO Ruby Kam said, "Costs for medical care and medications for our members have escalated rapidly and spending is now growing at the fastest rate in more than a decade. The surge in spending is putting a heavy and unsustainable burden on our employer customers and members who are struggling to keep up with rising costs." The Retailers Association of Massachusetts is made up of 4,000 members. Most of them are small businesses who said they had faced double digit premium increases year to year. Jon Hurst is the organizations president. "Right now, if you have a mandated coverage on insurance at very high reimbursement rates and high usage, it's going straight to the bottom line," said Hurst. "These pharma companies have to decide which is more important to them, very high premiums or very high costs. Reimbursements for these drugs or high volume. They can't have both." On the same day the BCBS news broke the state's Group Insurance Commission met on Beacon Hill to go over a budget shortfall. The GIC has 460,000 members and provides insurance to state employees and their families. In their monthly meeting, Executive Director Matthew Veno laid out the challenges GLP-1 drugs were putting on their budget. "The GIC has been averaging a fairly significant monthly deficit of about $20 million throughout the year," Veno said. He went on to explain how that deficit was being fueled by rising provider prices and increased demand. The GIC has formally asked the legislature for an additional $240 million to cover the costs. Governor Maura Healey included that request in the supplemental budget she submitted earlier this month.
Boston Globe
28-02-2025
- Health
- Boston Globe
Fast-rising costs for weight loss drugs helped drive record loss for Blue Cross Blue Shield of Massachusetts
Blue Cross chief financial officer Ruby Kam said the entire health insurance sector nationally is grappling with escalating medical costs, including from GLP-1 drugs. But while most national insurers reimburse for those drugs only when they're used to treat diabetes, Blue Cross and other Massachusetts insurers also cover their use to treat obesity. The costs, which are projected to double again in 2025, will likely boost premiums for Blue Cross members even as the insurer works to hold down claims increases from hospitals and its own administrative costs, which make up about 10 percent of its revenue, Kam said. Advertisement 'Our premiums are not covering our expenses,' Kam said in an interview. 'We're looking at how to address this. Everything's on the table.' Among other things, Kam said Blue Cross executives are weighing whether they can continue reimbursements for GLP-1 therapies prescribed to treat obesity. No decision has yet been made. Massachusetts saw the country's third-highest increase in GLP-1 prescriptions for obese patients in 2024 compared to the prior year, driven in part by broad insurance coverage for the drugs here, the Other health insurers in Massachusetts are also feeling the squeeze. Most of the state's health plans have been losing money for the past several quarters, said Lora Pellegrini, president of the Massachusetts Association of Health Plans, a trade group for the insurers. Advertisement 'We know from over two dozen state reports that provider prices and pharmaceutical prices are the key drivers of health care costs,' Pellegrini said. 'We have to have a serious conversation in the state about the prices being charged by the pharmaceutical industry.' Blue Cross reported an overall net loss of $223.6 million last year on revenue of $9.7 billion, a 2.3 percent net loss margin. Its operating loss of $400.4 million, a 4.3 percent loss margin, was partly offset by investment income of $176.8 million. A year earlier, the insurer posted net income of $146.6 million, a 1.6 percent net loss margin. In a message posted on the Blue Cross website Friday, chief executive Sarah Iselin, said the health care system faces multiple stresses from a shortage of primary care and mental health providers to rising costs from breakthrough medicines and medical procedures, creating affordability challenges for consumers and employers. 'Given the current environment, we don't expect the cost pressures to ease off any time soon,' Iselin wrote. 'So, in the coming year and beyond, we'll be taking an even more disciplined approach to become more efficient in the running of our business, while continuing to work aggressively and collaboratively to slow the growth in spending for medical and pharmacy services.' Robert Weisman can be reached at
