The Group Insurance Board today examined the cost effectiveness of bariatric surgery and adding coverage of weight-loss drugs in the State of Wisconsin Group Health Insurance Program (GHIP). Additionally, the Board reviewed progress on strategic initiatives and completed other business.

The Department of Employee Trust Funds presented its initial findings of how bariatric surgery affects utilization of medical and prescription drugs, health outcomes, and costs. ETF analyzed healthcare claims data collected from 2020, when bariatric surgery was approved as a Uniform Benefit, through the end of 2023.

Bariatric surgery resulted in positive health outcomes for the great majority of the study group. By 2023, only 13% of members who received the surgery in 2021 remained in severe stages of obesity, compared to 43% of members who qualified for but did not undergo surgery. Diabetes, hypertension, and other comorbidities also decreased post-surgery.

The overall annual cost of bariatric surgery ranged from $5 million for 166 members in 2020 to a peak of $10 million for 297 members in 2021. The cost in 2023 was approximately $8 million for 242 members, which is an indication of future costs to the GHIP.

Weight-Loss Drugs

The Board’s actuary, Segal, provided new projections for weight-loss drug utilization, costs and savings based on rebates from the drug manufacturers of Zepbound and Wegovy. For 2025-2030, the savings do not offset costs. Segal projected a net loss of nearly $26 million in 2030.

Options for the coverage of weight-loss drugs were presented by ETF for the Board’s consideration. Some of these options include establishing a pilot program, creating a new tier to the drug formulary for weight-loss drugs, and offsetting costs with increased copays and deductibles.

The coverage of weight-loss drugs for the 2026 plan year will be discussed by the Board in conjunction with contract negotiations for the Pharmacy Benefit Manager in early 2025.

Clear Bagging

Leading indicators are positive for the Board’s initiative to establish cost savings and convenient options for administering specialty drugs to non-Medicare members. Clear bagging is an option that uses the internal specialty pharmacy of a provider to dispense the prescription and transport it to where the drug is administered.

ETF presented data from 2023 that shows the cost of drugs in clear bagging is considerably lower than the average cost of providing the same drugs under the medical benefit.

Local Program

ETF provided an update on the Board’s initiative to explore structural changes to the Local program for sustainability and to better control costs. In addition to completing a Request for Information, ETF solicited feedback from local employers on their level of satisfaction with the Local program and ideas for improvements.

ETF and Segal compared state and local claims costs, geographic cost differences, member ages, and risk scores. This information was used to identify several options for restructuring the Local program, which could include a tiering option like the State program.

Other Business

The Board approved:

  • The extension of the Uniform Dental Benefit contract with Delta Dental of Wisconsin for two years, beginning January 1, 2027
  • Revisions to the Supplemental Insurance Plan Guidelines for vision and Accident Plan contracts, effective for the 2026 plan year
  • An amendment to the Income Continuation Insurance contract with The Hartford to increase administrative fees in 2025 and 2026. This will not impact premiums.

ETF also reported on member engagement during the recent 2025 Open Enrollment period, Board-approved vendor pilot programs, and proposed initiatives and benefit changes for 2026.

The Board will meet next on January 15, 2025, to review Request for Proposal results for Medicare Advantage and Medicare Plus, and the Pharmacy Benefit Manager.