One nonprofit hospital system in Pennsylvania, Jefferson Health, said the cost of GLP-1 drugs has jumped to 40% of its insurance spending. As a result, the organization’s CEO, Dr. Joseph Cacchione, stated the issue led to more than 600 employees being laid off.
US Healthcare System Facing Crisis With Rising Demand of GLP-1 Drugs
By Rob Taub – SOURCE: MSN
(NewsNation) — A surge in demand for popular weight loss drugs like Wegovy and Zepbound is creating a growing financial strain across the U.S. health care system.
The strain has become problematic enough that some states have dropped Medicaid coverage.
In 2025, 16 state Medicaid programs covered the drugs. But as of January, California, New Hampshire, Pennsylvania and South Carolina ended their GLP-1 coverage for weight loss. Michigan also restricted coverage to people who are classified as morbidly obese. Meanwhile, Rhode Island has also proposed ending coverage of the drugs.
“Patients should have access to these therapies,” said Dr Matthew Klebanoff. “It’s just very challenging right now for payers to be able to afford covering these medications for everyone who could benefit.”
One nonprofit hospital system in Pennsylvania, Jefferson Health, said the cost of GLP-1 drugs has jumped to 40% of its insurance spending. As a result, the organization’s CEO, Dr. Joseph Cacchione, stated the issue led to more than 600 employees being laid off.
Last year, the costs left Jefferson Health’s insurance arm with a reported loss of nearly $180 million.
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“We understand the value of them, but they are putting a big stress on the system,” Cacchione said. “The system wants to pay for them. We just can’t afford to pay for them right now.”
According to Everyday Health, about 1 in 8 American adults have tried a GLP-1 medication. The site also notes nearly six million Americans lost insurance coverage for GLP-1 medications when insurers reshuffled their policies last year, and fewer than 20% of employer health plans now cover GLP-1 drugs for weight loss.
GLP-1 drugs have contributed to a 37% decrease in the country’s obesity rate as of 2025.
