New York Utility Company May Raise Bills to Cover Employees' Ozempic

New York electric company Con Edison is considering increasing rates to cover employee benefits after more employees started using GLP-1 weight loss drugs.

According to a public Con Edison docket on benefits, customers can expect a rate hike of up to 14 percent as employee welfare costs related to Ozempic and similar medications surge.

Newsweek reached out to Con Edison via email for comment.

Why It Matters

Ozempic and other glucagon-like peptide 1 (GLP-1) drugs have been developed to manage blood sugar levels in patients with Type 2 diabetes. These drugs are also popularly used for weight loss.

Ozempic helps patients regulate their appetite via semaglutide, which activates GLP-1 hormone receptors and reduces feelings of hunger. This makes it a particularly effective way to curb obesity, but doctors have warned of potential side effects in the long term.

What To Know

The Department of Public Service has been considering Con Edison's request to increase prices for the more than 9 million customers they serve in New York City and Westchester County. That includes an 11.4 percent price uptick for electricity and a 13.3 percent rise for gas prices.

In ConEd's docket of employee benefits, the company explained that over 15 months, costs for employee welfare expenses are projected to increase by 15.2 percent overall. That's a 12 percent surge per year, primarily due to the increasing costs and use of GLP-1 prescription drugs like Ozempic.

Experts say weight loss drugs like Wegovy cost employers roughly $9,000 to 16,000 per patient per year, so the extra rate hike that ConEd is passing on to consumers is unsurprising.

"Demand and utilization are clearly increasing," Caroline Messer, a board-certified endocrinologist and founder of Well by Messer, told Newsweek. "While eventually we may see lower health care costs due to decreased incidence of strokes and heart attacks, in the short term, costs for employers are clearly rising."

"Some employers are considering limiting coverage for patients," Messer said. "This may include only covering patients who are morbidly obese, capping the duration of coverage, or requiring participation in lifestyle programs. Frankly, I'm just happy that ConEd is not ending coverage of GLP one drugs for their employees."

What People Are Saying

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "Across the board, we've seen health care expenses rise significantly over the past few years, so these new projections of rising expenses and spending aren't completely unexpected. However, with the buzz surrounding drugs like Ozempic and more wanting to receive it, we've seen additional pressures being put on an already strained and expensive system.

"We've seen sizable jumps in rates in the past, and the expectations for a further increase of 15.2 percent overall appear in line with so many of the factors the industry is experiencing."

Hayley Miller, the medical director of Nurx Weight Management, told Newsweek: "The rising adoption of GLP-1 medications reflects a broader shift in how we approach weight management and metabolic health. While these drugs come with up-front costs, they have the potential to reduce long-term health care expenses by preventing obesity-related conditions like diabetes and heart disease. As GLP-1s become more widely accepted, the focus should be on ensuring access while managing financial sustainability for insurers, employers, and patients alike."

David Navazio, CEO of medical supply company Gentell, told Newsweek: "Yes, employee benefit costs may have increased due to cost of GLP-1 drugs but in the long run, the positive impact of these drugs on employee's weight and overall health will mean lower health care costs in the future. Given that the utility is an essential service—one that consumers cannot really opt out of—ConEd's leadership should take a more careful, long-term view when increasing rates."

Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: "This ConEd situation perfectly illustrates the glaring contradiction in our health care system. We've finally developed medications that work for weight management, but they're priced like luxury goods rather than essential health care.

"What we're seeing with ConEd is essentially a health tax on utility customers. Your electric bill is going up because people are getting healthier—if that's not a broken system, I don't know what is."

What Happens Next

As costs for GLP-1s like Ozempic increase, companies will likely take on more of the burden if they want to continue offering employee coverage.

Ozempic costs nearly $1,000 for just one dose without insurance. However, experts think prices will decrease in the long term as GLP-1 usage ultimately makes employees healthier.

"While prescription costs will increase in the short term, the positive benefit of GLP-1 drugs on employee's overall heath will result in lower health care costs over time," Navazio said. "Unhealthy weight/obesity are clearly tied to chronic diseases like diabetes, heart disease and others."

Ryan said ConEd customers are essentially paying a premium for the health benefits that will reduce costs in the future.

"ConEd is effectively saying, 'Our employees are getting healthier and it's costing us money right now, so your electricity has to cost more,'" Ryan said. "But when those same employees have fewer sick days and lower health care costs in five years, will rates decrease? Don't hold your breath."