US towns paid for teachers and cops to use weight-loss drugs. It broke the bank.
Officials in Belchertown, Mass., were saving up to fix their broken roads and aging buildings last year when they were hit with a surprise $911,000 invoice.
The bill came from the Hampshire County Group Insurance Trust, which manages healthcare for dozens of New England towns, school districts and other public entities. The trust was struggling to control rising costs that had sucked up its reserves, including a new, surprising culprit: the snowballing cost of GLP-1 weight-loss drugs.
The trust was nearing insolvency, and towns would need to pay up to keep it afloat.
“The universal reaction was shock,” said Lesa Lessard Pearson, chair of the Select Board in Belchertown, a town of 15,000 in western Massachusetts. Officials had to draw from the town’s long-term savings and make departmental cuts, including school-budget reductions, to pay off the bill. “It felt like a betrayal,” she said.
Many public employers started covering weight-loss medication for teachers, firefighters and police officers a few years ago when the blockbuster drugs hit the market, following the lead of big companies. Far more employees were prescribed the drugs than expected.
Cities and towns are now racing to control surging healthcare costs, and many blame the increasingly ubiquitous drugs for contributing to a budget squeeze.
Some towns are gearing up to strip coverage of GLP-1s for weight loss when their fiscal years end next month. Other localities have decided that the costs of the drugs are worth their potential health benefits. And some are stuck paying for the drugs until they can renegotiate contracts with employees.
Employees, for their part, want access to the drugs. Labor unions have protested attempts to cut back coverage, arguing that they hurt employees who can’t afford the drugs’ sticker price. In Boston, unions fought with city leaders over proposed restrictions; the parties settled on an agreement that will likely limit the number of patients who are eligible to receive coverage for the drugs.
In Delaware, public employees pushed back against proposed changes with emotional pleas. “The medication did not replace healthy habits,” one school-district employee wrote in testimony. “It helped make them possible.”
Officials in Buffalo, N.Y., discovered that the city’s healthcare expenses had risen rapidly, in part due to the use of Novo Nordisk’s Ozempic and Wegovy. Mitch Nowakowski, a member of the city’s Common Council, said he was surprised by the new healthcare expense, which added to the budget deficit.
“We need a lot,” Nowakowski said. “We have crumbling infrastructure. We need new streetlights. We have parks that need investment. We need new sanitation trucks. We need more equipment for police and fire.”
Buffalo’s healthcare plan is attached to its collective-bargaining agreement, and officials haven’t yet raised the sensitive question of reducing coverage. And some wonder if covering the drugs, despite the short-term burden, will reduce emergency-room visits and save money by improving overall health.
Economists are still figuring out whether that is the case. In a working paper published this year by the National Bureau of Economic Research, economists argued that long-term savings from GLP-1s are offset as patients need more doctor’s office visits to be monitored for side effects.
Novo Nordisk said GLP-1s help reduce risks of conditions including cardiovascular disease and Type 2 diabetes. “Peer-reviewed studies suggest these treatments may improve long-term health outcomes and translate into savings across the healthcare system,” a company representative said.
It could take years for employers to determine how the drugs are affecting their healthcare systems, but towns and states need to make coverage decisions right now. The result: debates in council chambers and school committees on the pros and cons of a specific class of medications, an unusual topic for city managers.
Many states, cities and private employers have stripped coverage of GLP-1s for weight loss from their plans, or imposed limits on who is eligible. The Peterson-KFF Health System Tracker estimated this past fall that one-fifth of companies with 200 or more workers cover weight-loss drugs in their largest health plans.
In Washington, a public employee who was denied GLP-1 coverage for obesity sued the state in 2023, arguing that obesity was recognized as a disability there. A court dismissed the suit, but a state appeals court revived the case recently, sending it back to a trial court for further litigation. The decision could complicate the choices towns make regarding coverage.
When Michael Borg, town manager of North Attleborough, Mass., saw that its insurance costs had triggered a $1.8 million deficit, he assumed the town’s employees must be getting sicker.
As Borg investigated, he said it became clear that prescriptions for drugs including Ozempic and Wegovy were responsible for much of the budget pressure. Hoping the drugs could stave off medical problems, North Attleborough continued to pay for them.
The town of 30,000 reached a breaking point. It was already dealing with $1 million in snowplowing expenses after a brutal winter, and the healthcare costs siphoned the town of its financial flexibility, making such goals as bridge repairs and hiring police officers seem out of reach, Borg said. “If anything else happens, I don’t have any more options,” he said. The town decided to limit coverage.
In Cumberland County, N.C., officials said more time and data are needed to assess whether the drugs are making employees healthier and reducing long-term costs.
The area has one of North Carolina’s highest rates of diabetes and obesity, said Kirk deViere, chairman of the county’s Board of Commissioners. He said canceling coverage right now would be shortsighted.
Other regions are moving swiftly to stop paying for the drugs. In Fort Worth, Texas, the city paid $5 million in six months for two weight-loss medications for its employees. The city has proposed shifting costs entirely onto employees as it manages a $50 million shortfall.
In Massachusetts, members of the Hampshire County trust determined that the financial burdens were unsustainable. They voted to strip coverage of the GLP-1s for weight loss. In a statement, the trust’s executive committee said that in the first nine months of 2025, weight-loss drugs accounted for 30% of the group’s pharmacy spending but less than 3% of its membership. The trust hired a consulting group to assess the damage and plan a turnaround, and an executive stepped down.
A handful of towns have already fled the group, and others are still recovering from the financial blow of the midyear bills. In Montague, 20 miles north of Belchertown, the town administrator, Walter Ramsey, is facing a 53% year-over-year rise in healthcare costs, driven in part by the weight-loss drugs. The town’s school district cut five jobs and froze hiring. “The healthcare system is just broken,” Ramsey said.
–
SOURCE: US towns paid for teachers and cops to use weight-loss drugs. It broke the bank.
About Post Author
