Ozempic rebates reduced by health insurer HBF after claims double in wake of drug's release

Western Australia’s largest private health insurer will slash rebates for weight loss drugs including Ozempic, saying the rise in claims has become unsustainable.

HBF, which dominates the health insurance market in Western Australia with about 53 cent of all policies in the state, said the growth in claims for weight loss medications had led it to make the decision to cut benefits.

For members who currently hold cover for pharmaceuticals, benefits will be cut altogether for some medications, including Wegovy and all compound medications.

Benefits for other medications will be halved, including those containing semaglutide, the active ingredient in Ozempic.

The changes come into effect from August.

Popularity leads to shortages

Ozempic, which was originally developed to help people with diabetes, has exploded in popularity as a weight loss drug since it came on the market in 2021, leading to worldwide shortages.

People who take Ozempic for weight loss are prescribed it “off-schedule”, meaning it is not used for the purpose listed on the Pharmaceutical Benefits Scheme (PBS), and they can’t access it for the PBS rate of $41 per month or $6.60 for concession card holders.

A month’s supply of Ozempic with a private prescription generally costs between $130—$200 in Australia.

“We’ve made the decision following its escalating use off-schedule to reduce the benefit that we pay out for that drug, based on the cost that is coming to HBF and for our members and looking at the longer term trajectory for the cost that we’re incurring,” HBF chief executive Lachlan Henderson said.

“HBF pays out about $9 million a year in off-schedule pharmaceuticals and that amount has doubled since 2021.

“These [weight loss] drugs make up about 40 per cent of that spend and they’re only prescribed for about 3 per cent of our policyholders.”

Drug’s health benefits acknowledged

However, Dr Henderson acknowledged that while they were prescribed off-schedule, the weight loss medications had real health benefits for patients.

“I think these drugs are actually good drugs and I think we’ve always got to work out the cost versus the benefit to individuals and the community more broadly,” he said.

“As a former GP for over a decade I saw a number of patients who tried lots of different ways to lose weight, and we did use medications as a last resort.

“As an insurer we’re very interested in our members’ health and wellness.

“We do want to keep our members well and out of hospital because ultimately that lowers our claims into the future as well, and we can use our members’ money to support them in other ways.”

‘The cost to my health would be huge’

For ABC Radio Perth listener Max, who has been able to take Ozempic for weight loss and claim a rebate from HBF, the decision was a huge disappointment.

He described taking Ozempic and being able to lose weight as life-changing.

“My BMI [body mass index] was, I think, about 32 at the time,” Max told Jo Trilling on ABC Radio Perth.

“Over the course of six months I lost about 25 kilos, and my BMI went from the start of morbidly obese to just above healthy.

“I stopped snoring, I slept better, my mental health was better.

“Across the board, I was living and being healthier because I had [Ozempic], and that for me is what private health is for, to get better.”

He questioned why a health insurer would treat weight loss differently to other treatments available like remedial massage or dental care.

After losing 20 per cent of his body weight, Max said he had been unable to access the drug due to supply issues recently and he could already see the impact on his weight and appetite.

“I can slowly see things creeping back, the late-night chocolate cravings are back,” he said.

Despite the lower rebates, Max said he would still pay for Ozempic if he could access supply.

“The cost for my health of dropping off this weight loss drug would be huge,” he said.

“But I think paying a premium for a health insurance service and then not having it live up to expectations, it’s pretty tough.”