Ashley Groffenberger, the city’s chief financial officer, sent a letter to the City Council on Monday, saying health insurance rates for city employees are poised to spike by nearly 23 percent in the fiscal year that starts in July — the highest year-over-year increase in premium costs the city has seen “in recent history.” Boston included $483 million for all health-related benefits for employees and retirees in its budget for this fiscal year, according to the city.
The hikes will be borne by workers, too, she warned. She said for workers in one of the city’s Blue Cross Blue Shield family insurance plans, the monthly premium costs could increase from $655 to $803, or $1,773 for the year.
Groffenberger wrote that nearly 15 percent of the city’s overall projected increase is driven by the rise in city employees taking GLP-1 medications. Coverage for those drugs cost roughly $32 million this fiscal year but is expected to jump by 50 percent to more than $47 million next year, she wrote.
The city’s health insurance system covers about 55,000 members of the city’s workforce, their families and retirees. Groffenberger said about 8 percent of city workers on non-Medicare health insurance plans take GLP-1 drugs for weight loss purposes, though it wasn’t immediately clear Monday exactly how many employees that covers.
In an effort to avoid eliminating coverage of GLP-1 drugs entirely, Groffenberger told the council that the city sought permission from its employees’ unions to change their health care plans to implement “utilization management” — essentially requiring doctors to get approval from employees’ insurance providers before prescribing certain medications.
That change would save the city between $8 million and $9 million a year, Groffenberger said. The city’s Public Employee Committee, which represents unionized city employees and retirees in health insurance negotiations with the city, voted against approving that change earlier this month, she wrote.
Larry Calderone, president of the Boston Police Patrolmen’s Association, the city’s largest police union, told the Globe that it is open to negotiations with the city over how to keep health insurance costs down.
“Everybody’s experiencing tough times out there financially, and any increase is going to take away from some other budget portion of a family’s income,” Calderone said. “My best scenario is to keep everybody covered with the medications they need, at the lowest cost.”
The Boston Teachers Union did not immediately respond to the Globe’s inquiry for this story Monday. The Boston Firefighters IAFF Local 718 declined to comment.
Elissa Cadillic — cochair of the Public Employee Committee and president of AFSCME Local 1526, the Boston Public Library employees union — said Monday they’re concerned that the city’s move to require prior authorization could impact all non-specialty medications, not just GLP-1 drugs.
She also questioned how much money “utilization management” would actually save the city each year.
But Groffenberger is now asking for the council’s support in asking for the Public Employee Committee to hold another vote and agree to the change before the end of the week.
Otherwise, she said, the city would have to consider other options, including joining Massachusetts’ Group Insurance Commission, which eliminated coverage of GLP-1 drugs for state employees last month. The Group Insurance Commission board, which approved the change, cited budget challenges and surging costs. About 22,000 GIC members currently take GLP-1 drugs for weight loss, at a total cost of $46 million, state officials said.
Groffenberger told council members in her letter that the city’s revenues are projected to increase by just 1.5 to 2.5 percent next fiscal year, saying the city has “fewer resources available to absorb these increased costs.”
“These significant financial impacts require a departure from standard practice,” Groffenberger wrote.
“Given these unprecedented circumstances, and unaffordable increases in cost for our employees and the City, our administration has requested that the PEC leadership reconvene and take new votes on the options presented no later than Friday,” she continued.
Cuts to GLP-1 coverage have proliferated across the country. Several states have cut coverage for the pricey drugs under their Medicaid program, including New Hampshire, where officials planned to cut coverage for weight loss in January.
North Carolina ended coverage for obesity last fall, citing “shortfalls in state funding,” roughly a year after it dropped coverage under the state employees’ health plan of the same class of drugs because of rising costs.
New York City officials said in 2024 they, too, were dropping coverage for weight-loss drugs after reportedly saying they had been paying for them “in error.”
More than 40,000 customers of Massachusetts’ two biggest insurers, Blue Cross and Point32Health, have lost coverage of GLP-1s for obesity this year, according to the data the companies provided to the Globe. An unspecified number of customers of smaller insurers have also lost the benefit.
Niki Griswold can be reached at niki.griswold@globe.com. Follow her @nikigriswold.