Fort Worth is moving to curb rapid growth in city employee healthcare costs, which are largely driven by growing prescriptions for GLP-1 weight loss drugs such as Ozempic, Wegovy and Zepbound.
One proposed change the city is considering would limit coverage of Ozempic to when it is physician-prescribed as a medication for diabetes, but eliminate coverage of Wegovy and Zepbound prescribed for cosmetic weight loss.
“What we’re dealing with is a structural issue with how we are funding our health plan,” Jay Chapa, city manager, said during a recent city council work session on the fiscal 2027 budget. “A big part of it is prescriptions.”
The city’s self-insured employee health program, which covers more than 11,000 employees and their dependents, is projected to run at a $30.6 million shortfall for fiscal 2027 if no changes in coverage are made by the city, according to HUB International, an insurance brokerage and consultant hired to review the health plan.
That’s due to underfunding by the city, rapidly rising claims, and incorrectly calculated administrative expenses, the staff said. Although the claims costs are largely driven by prescriptions for weight loss medications, higher charges for emergency room use, related imaging and musculoskeletal claims — such as for joint injuries — are also driving higher expenses, the staff said.
Without changes, the fund will continue to destabilize, the staff said. The fund is separate from Fort Worth’s general fund, which pays for most city services each year. But health fund shortfalls put pressure on the general fund, which is already in a squeeze as costs grow faster than revenue.
“All departments contribute to the group health fund,” Kristen Smith, the city’s director of human resources, civil service and civil rights, told the Report. “This means that if costs continue to rise as expected, departments will have to increase their contributions to keep the fund whole.”
For a six-month period earlier this fiscal year, GLP-1 medications represented about 40% — more than $7 million — of the city’s total pharmacy costs. Wegovy and Zepbound represented more than $5 million of the $7 million, a staff analysis found.
For 2025, the GLP-1 claimants comprised about 600 plan participants, Smith said. In April, that number had risen by a third, she said.
“Eight hundred people are almost 50% of your pharmacy costs,” she said.
Originally marketed for treatment of diabetes, Ozempic, was found to be beneficial in weight loss and became frequently prescribed by physicians for weight loss in patients who also have diabetes, the staff said.
Wegovy and Zepbound were marketed specifically for weight loss. They have been found to be beneficial in treatment of other conditions, but are almost always prescribed for weight loss in the city’s experience, or “purely cosmetic,” Smith said.
GLP-1 stands for the glucagon-like peptide-1 hormone. “It’s all the same medication,” she said.
In the six months analyzed by the city, Zepbound claim costs rose 2,539% compared with the same period the previous year, Smith said. GLP-1 medications are considered lifetime medications, to be taken at regular intervals, driving up their total costs, Smith said.
About “$1 million a month is going to this category,” Smith said. Because most of the prescriptions are for weight loss only, that makes them hard to predict for budget purposes, Smith said.
The new pill version is likely to drive up employee usage even more, she said, although the staff hasn’t put specific estimates on that.
“Taking it by mouth makes it a lot more accessible,” Smith said.
Under the proposal to limit coverage of GLP-1 prescriptions, plan participants would be able to continue to get the drugs under the city’s plan, but they would be responsible for 100% of Wegovy and Zepbound costs. Alternatively, they could seek the drug through direct-to-consumer options, Smith said.
If the change goes into effect, the city would provide 90 days’ notice to plan participants to seek other options, Smith said.
The city’s plan treats GLP-1 medications the same way as any other drug. On one plan, the member’s cost is a $50 co-pay per 30-day supply after meeting a $100 pharmacy deductible.
On another plan, members pay full cost until reaching a $3,400 deductible.
“For the first few fills, this is about $1,000 for the 30-day supply,” Smith told the Report.
Once the member meets the deductible, they pay 20%, or about $800, she said. Once the maximum out-of-pocket $6,550 is met, the drug will cost nothing to the member, she said.
City council members debated the merits of the balancing act at their work session.
Council member Elizabeth Beck wondered whether removing prescribed coverage for patients with obesity, high blood pressure or cholesterol could end up costing the city more in the long run through costly claims for conditions that escalate.
“I do think we need to make some changes,” she said. “But part of what makes these drugs revolutionary is they help treat those comorbidities — the high blood pressure, the borderline diabetes that have long-term effects on our plan.
“If we have obesity” among plan participants, “shouldn’t we be looking for ways to treat them?” she said, asking the staff for data on whether the GLP-1 medications have helped mitigate comorbidities.
For women in particular, “studies have shown that small doses of GLP-1 have big impacts,” she said.
Council member Deborah Peoples said, “I think we’d be more comfortable if we were saying we’re doing away with Wegovy and Zepbound, but we’re keeping Ozempic” as a covered drug prescribed for weight loss in combination with comorbidities.
Mayor Mattie Parker agreed that a healthier workforce would help contain costs.
“I think it’s an important consideration,” she said during the work session.
Council member Charles Lauersdorf asked whether it was possible to offer rebates “and save the city a ton of money” on insurance claims as part of the solution.
He also said the city should remind plan participants of their personal responsibility in maintaining good health.
“I love me a King Size Reese’s and a regular Coke from time to time, too, but it’s getting to the point where it’s costing the city a ton of money,” he said.
Smith said proper nutrition would be part of the city’s internal education campaign.
To confront the problem with the health fund, HUB recommended a three-prong approach over three years: increasing funding rates, modifying the insurance plan design, and “cost containment solutions.”
“It’s a big ship to turn around, so we know it’s going to take a while,” Smith told council members.
The staff wants to maintain its model under which the city contributes 83% of the plan costs, recognizing employees are paying more out of pocket today than at other benchmarked employers.
Higher employee deductibles and co-pays are also in play as potential parts of the solution, Smith told the Report.
The city’s plan, like others nationally, continues to be burdened by higher-than-desired usage of emergency rooms. Those are usually in situations where primary care physicians, the city’s partnership with clinics, and urgent care clinics would provide lower-cost solutions, the staff said. The city wants to steer plan participants in that direction.
Costs are also increasing for surgeries and conditions and injuries to bones, muscles, joints, tendons, ligaments and cartilage. The staff — in its plan review — is looking for ways to mitigate exposure, including via steering plan participants to preferred physical therapy and intervening earlier to avert the need for surgery, Smith said.
The city also expects to regularly verify that plan participants are eligible to participate in the health plan.
“At the end of the day, we want to make sure we have eligible members,” Smith said.
Any changes to the plan and its benefits would affect all participants except firefighters, whose healthcare is governed by their collective bargaining agreement, Smith said. The health plan is a topic of ongoing negotiations with the firefighters’ association, she said.
Scott Nishimura is senior editor for local government accountability and a Fort Worth City Hall reporter at the Fort Worth Report. Reach him at scott.nishimura@fortworthreport.org.
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