How Jefferson Health is coping with GLP-1 pressures in insurance coverage

Philadelphia-based Jefferson Health and its insurer arm, Jefferson Health Plans, are reckoning with GLP-1 costs for its members and 65,000 employees.

“Many insurers, including Medicaid programs in Pennsylvania and elsewhere, have been forced to restrict or discontinue coverage due to the unsustainable pricing of these medications,” a Jefferson statement shared with Becker’s April 17 said. “We continue to advocate for more reasonable drug pricing and coverage models so that evidence-based obesity care can be expanded more equitably across patient populations.”

Jefferson CEO Joseph Cacchione, MD, spoke with NBC News about challenges the health system and insurer have been facing with GLP-1 coverage. In the interview, Dr. Cacchione said, last year, prescription drugs comprised 40% of Jefferson’s insurance spending. Ten years ago, that figure was only 14%. He attributed roughly one-third of the insurance division’s approximately $180 million loss in 2025 to GLP-1 spending.

Jefferson started requiring its employees under the self-funded plan to follow through with diet and lifestyle programs ahead of gaining GLP-1 coverage. Dr. Cacchione told NBC News that push has saved the health system $20 million.

“Jefferson Health’s approach to weight management is grounded in the belief that obesity is a chronic, complex condition that requires comprehensive, compassionate care — not a standalone prescription,” the Jefferson statement said. “Participants work with dedicated clinicians to ensure proper medication selection and dosing while also receiving dietitian support and guidance to manage side effects and sustain long-term health improvements. This model has resulted in strong engagement and adherence.”

Jefferson noted GLP-1s are only one factor of the weight management protocol and reported that more than 90% of participants are actively enrolled in the employee program.

The NBC News interview reported that Jefferson had laid off more than 600 employees amid financial turmoil, partially driven by pharmaceutical spending.

“It is important to be clear that these decisions were not made as simply a response to GLP‑1 costs,” the Jefferson statement said. “Like many healthcare systems nationally, Jefferson is navigating significant financial pressures driven by multiple factors, including reimbursement challenges, labor costs, supply expenses and rising pharmaceutical spending across many therapeutic categories. The cost of GLP‑1s is one component of a much broader financial picture.”

Prescription drugs are one of the most utilized health insurance benefits. KFF found about two-thirds of U.S. adults take at least one of these medications. According to a 2026 AHIP analysis, more than 24 cents of every 1 dollar in premiums go toward prescription drugs, the largest spending category. Dr. Cacchione confirmed Jefferson spends more on prescriptions than inpatient care amid GLP-1 popularity.

An October 2025 Employee Benefit Research Institute analysis determined that premiums for employer-provided coverage could increase by roughly 5% to 14% while covering GLP-1s. As a result of spending concerns over the past few years, some employers have been moving away from this benefit.

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