Wu’s administration is considering cutting GLP-1 coverage for weight loss for Boston city workers because of “skyrocketing” health insurance costs that are straining city finances.
Chief Finance Officer Ashley Groffenberger said in a letter to the Boston City Council on Monday that the city has confirmed that there will be a significant increase in employee premiums and health insurance budget costs for the 2027 fiscal year, as the use of GLP-1 weight-loss drugs such as Ozympic and Vigoi increases.
The city faces a potential 22.6% increase for the next fiscal year. Employer health insurance costs — which cover about 55,000 employees, their families and pensions — are projected to increase by nearly $80 million in fiscal year 2026 for the city, Boston Public Schools and the Boston Public Health Commission, compared to an average annual increase of $10.6 million over the past eight years, Groffenberg said.
“Like other employers, the city has faced an overall increase in health care costs, a series of unusually high cost claims, and the growing use of GLP-1 drugs for weight loss,” Gruffenberger wrote.
“Currently, only about 7.7% of non-Medicare plan members have access to GLP-1s for weight loss through City Health Insurance – yet this use represents approximately 14.7% of the estimated cost. From FY26 to FY27, costs for weight loss with GLP-1 are estimated to be $47.4 million in FY27 and $47.4 million in FY27,” the CFO added.
Groffenberger said the city has tried to avoid cutting coverage of a popular weight-loss drug for city workers, but union leadership’s rejection of its proposed utilization management alternative may force its hand.
She described utilization management as “an industry standard cost control tool that ensures prescription drugs are prescribed only when clinically appropriate.”
Groffenberger estimated that using utilization management would save the city $8 million to $9 million annually in health care costs.
The tool is already available for the city’s Mass General Brigham non-medical plan, and is being pursued by the city for its Blue Cross Blue Shield accounts, which Groffenberger said are the only Blue Cross plans in Massachusetts that don’t use it for non-specialty drugs.
The city needs to engage in collective bargaining negotiations with the Public Employees Committee, which includes public employee union representatives and a pension representative, to make changes to health care benefits, Groffenberger wrote.
Groffenberger said the Wu administration presented PEC leadership with full information on “skyrocketing health care costs and a potential $22.6% price increase,” including utilization management with options to address costs, but the proposal was rejected by a quick PEC vote on March 9.
Three unions representing a majority of those present at the meeting rejected the proposed changes, three unions voted to adopt utility management, and “several other unions were unable to attend the meeting due to short notice,” Gruffenberger wrote.
A source familiar with the matter said the push to reject the city’s proposal was driven by the Boston Teachers Union and the Boston Firefighters Union, Local 718, which included a majority vote that was made “with little notice.” The source said it was “hostile right out of the gate, and just trying to kill it, and never really had fun.”
“The consequences of this incompetence, if allowed to stand, are great and immediate,” Groffenberger wrote. “Health insurance rates for non-Medicare plans will increase 22.6% over FY26 – the highest year-over-year premium increase in recent history. These rate increases will be felt deeply by the city and our workforce.”
For example, an employee who enrolls in the city’s widely used non-medical plan will see their monthly premium increase from $655 to $803, an increase of $148 a month and $1,733 a year, Groffenberger said.
Citing the city’s tight finances and unaffordable health care costs for employees, the city has requested that PEC leadership take another vote on the cost-cutting proposal to cover GLP-1, no later than this Friday, Groffenberger wrote.
“This significant financial impact requires a departure from standard practice, and we are hopeful that the PEC will work with the City in a way that serves our workforce, maintains fiscal responsibility, and avoids the need to pursue alternatives, such as joining the Commonwealth Group Insurance Commission, which has already voted to eliminate GLP-1 coverage,” wrote GLP-1 Coverage for Weight Loss.
The chief financial officer emphasized that the city is facing “tough decisions” to contain spending in the next fiscal year, which begins July 1, with “limited revenue growth, which is estimated to be approximately 1.5% to 2% compared to FY26.”
The Wu administration had previously directed city department heads to cut their budgets by 2%, as the city faces the threat of federal funding cuts and declining business revenues due to falling office building values.
“With fewer resources available to absorb these increased costs,” Gruffenberger wrote, “additional targeted reductions will be necessary as we work to deliver a responsible and balanced budget for FY27.”
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