Can California afford to cover Ozempic for public employees?

In a rare showing of bipartisan support, the state Senate in May overwhelmingly voted to pass a bill that would potentially help hundreds of thousands of California public employees combat obesity by requiring their health insurer to cover anti-obesity medications, or GLP-1 drugs, like Ozempic. 

So why is CalPERS, the health plan for 1.3 million public employees and retirees, recommending its board oppose the bill?

In one word: Money.

In a new estimate, the California Public Employees’ Retirement System says the bill would increase premiums by $437.2 million, or about $28 per member, per month. It would cost the state general fund $187.2 million in the first year alone. In subsequent years, costs are likely to increase by “tens of millions of dollars annually.” 

• CalPERS staff, in its recommendation: “Broad coverage would strain health care resources due to the sheer scale of the eligible population. … Studies of total cost of care in the commercial market consistently show that GLP-1 coverage increases overall spending because added costs far exceed any savings from reduced healthcare utilization.”

The price tag may ultimately be tough to swallow for Gov. Gavin Newsom if the bill clears the Assembly and reaches his desk. Just last year Newsom persuaded the Legislature to end Medi-Cal coverage for weight-loss drugs because of their expense.

The new proposal by Sen. Laura Richardson would set up a five-year pilot requiring health insurers for public employees to cover treatment for chronic weight disease management, including at least one GLP-1 medication. GLP-1s can also help manage blood sugar levels for people with diabetes.

Being overweight increases health risks, including developing heart disease, high blood pressure and certain cancers. About 11 million California adults, or 27%, have obesity, according to the American Diabetes Association, a rate that is projected to increase to 41% in 2030.

In an April hearing, Richardson cited her own experience losing 43 pounds with the anti-obesity medication Zepbound. Because her doctor prescribed Zepbound for weight management and not diabetes, Richardson’s health insurance, CalPERS, did not cover it.

• Richardson, an Inglewood Democrat: “Chronic weight management can be related to reduced labor participation earnings, increased early mortality, absenteeism, disability and health care costs in an excess of over $1 billion that impacts our California gross domestic product. … Why aren’t you offering something that could actually save you money in the end?”

CalPERS’ board plans to formally vote on its stance next week. The Assembly’s health committee is expected to consider the bill on June 16.

The latest report from an Oakland-based nonprofit found that the vast majority of California youth are grappling with mental health issues. But with limited access to services, youth advocate groups and teens are working to address the state’s poor mental health outcomes, writes Anissa Durham for CalMatters.

Earlier this year Children Now found that in an average month, 94% of Californians ages 14 to 25 reported mental health concerns, such as stress and anxiety. But health insurance denials, complex mental health services that are difficult to navigate and a lack of access to youth-centered spaces make finding help difficult.

Children Now aims to make counseling and therapy more transparent by backing a bill that would require health insurers to report the number of treatment denials.

Sixteen-year-old Bryce Collins is also working to help his fellow peers in the Los Angeles Unified School District — particularly Black and Latino kids. Through his work with an organization working to end the school-to-prison pipeline, the high school junior is advocating for more spaces inside schools that protect students’ mental health.

• Collins: “Being a young Black male lets me know how I have to approach some of these areas … I can’t do what everybody else do. I don’t got the privilege. I have to hold myself to a higher standard because that’s not how society views us typically.”

Read more.

A federal judge handed the Trump administration a loss Monday, ruling that its requirement for American employers to pay a $100,000 sponsorship fee for new H-1B visas is unlawful.

In his ruling U.S. District Court Judge Leo Sorokin of Massachusetts said the tax was imposed “without the requisite delegation by Congress.” Arguments made by the administration’s lawyers that President Donald Trump has the authority to impose the tax based on his “immigration and commerce powers” are also “nowhere to be found in the authorities they cite,” wrote Sorokin.

Since September, the administration imposed the high fee arguing that the visa program companies use to employ skilled foreign workers “has been deliberately exploited to replace, rather than supplement, American workers.” 

Sorokin’s ruling sided with 20 states, including California, in a multi-state lawsuit challenging the policy in December.

• Rob Bonta, California attorney general, in a statement: “This tax was an attack on America’s ability to attract and retain the high-skilled talent that strengthens our economy and helps us meet critical workforce needs. California remains open for business, open to talent.”