The Journal. - Weight-Loss Drugs Are Gobbling Up Small Town Budgets

Episode Date: June 29, 2026

Many small towns across the country added GLP-1 weight-loss drugs to their employee health insurance plans. Now, some of those towns are being hit with huge unexpected premiums as use of the drugs continues to grow. Imani Moise speaks to a selectwoman from Belchertown, MA who helped navigate her town through a devastating bill and WSJ’s Owen Tucker-Smith takes us through the economics for towns around the country. Further Listening: - Trillion Dollar Shot - Novo Nordisk's CEO Has a Comeback Plan - Ozempic Is a Hit. So Why Is the Drugmaker’s CEO Out? Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, it's Ryan. Our colleague of Mani Moise is here to guest host today's episode. Here it is. About an hour outside of Boston, there's a picturesque small town surrounded by forested hills called Belcher Town. That's where Lisa Lassard Pearson lives. My spouse and I affectionately call it Belcher Town or B-Town to get around the Belter Town connotations. Lisa sits on something called the Select Board. It's a small-town version of a city council that serves Belcher Town's 15,000 people. And after years of saving up reserves,

the town had finally scraped together enough money for a few key infrastructure projects, like repairing the roofs and the lights at the schools and updating the senior center. These are basics. This isn't like fun, sexy projects. This is like the real work stuff that needs to be done to keep the town going. But then came a surprise invoice.

I got a phone call from the town manager. It came to him first, and he immediately reached out to me. The bill was from the town's health insurance administrator. It said Belchertown owed an additional $900,000 in health insurance premiums. Which is a major fiscal event for a town our size. What was going through your mind at first when you saw these numbers? I was shocked. I was absolutely shocked. And my first reaction is how can they do that? At first, the board didn't even know what they were being charged for. But eventually, they learned that their health insurance administrator was facing massive deficits.

A major cause? The growing use of GLP1 weight loss drugs. After all the careful planning we had done, and the months we spent working on the budget, it was devastating. Belchertown had no choice but to pay up, which meant it was faced with a big budget question. What's more important? Health care or keeping the lights on? I mean, what I want to really say is Belcher Town is, Belcher Town is, is not unique. Beltertown is just, as I say in Boston,

wicked good example of, you know, what can happen to a small town. Welcome to The Journal, our show about money, business, and power. I'm Imani-Mauese. It's Monday, June 29th. Coming up on the show,

how small towns are tightening their belts to cover weight-loss drugs. Across the country, the cost of weight-loss drugs for small-town employees is starting to break the bank. Because for a small town of, you know, thousands of people versus millions of people,

you know, all it takes is a few dozen people to be on these drugs for costs to start potentially rising quite quickly. We called up our colleague Owen Tucker Smith, who answered from a hotel room in Missouri. I am on the economics team here at the Journal, so we are always roaming around the country looking for interesting economic stories,

you know, towns, an interesting conundrum, like for this story. A lot of these towns were already operating on super tight budgets, just enough to cover basics like payroll and electricity. And so when you start to see costs rising by $100,000, it's something that might not, you know, be too problematic for a big city, but for some of these towns,

that can really change the calculus of what they are and are not able to afford. So why did this issue catch so many towns by surprise? Yeah, so towns knew at the beginning that GLP1 drugs were getting traction. But I think very few of them realized exactly how popular they were going to be. Or how expensive. Even after recent price cuts, these drugs can still cost insurers hundreds of dollars a month for each patient. Meanwhile, they're being prescribed more and more.

According to Gallup polling, more than 12% of Americans reported taking GLP1 drugs for weight loss last fall. That's twice as much as the year before. The utilization of them has skyrocketed, and a lot of these kind of audit reports that the towns talk about, they were getting notes from their health insurance brokers just saying that the usage of these drugs had doubled or tripled or more over the course of a few years.

and when you have a pretty expensive drug that goes up so much, so quickly in usage, it can kind of catch you off guard. And I think that's what happened with a lot of these towns. The health insurance that these small towns are paying for covers their municipal employees, like teachers, firefighters, police officers, and sanitation workers. Jobs that don't always come with the highest salaries, but tend to have great benefits to attract workers. municipal government basically takes care of the town in all its many facets.

Lisa's town gets health insurance for its municipal workers through a regional trust called Hampshire County Group Insurance Trust. It's sort of a pool of towns that are, they're too small to have their own health insurance. So they all kind of pool together to sort of balance out the risks across the towns. But one commonality between all these towns, including Belmont. was that GLP1 costs and usage were going way up. Costs were going up so much that the trust was on the verge of insolvency. The trust said that GL1s for weight loss were a significant contributor to their financial problems. And so they reached out to all of the towns and gave them the background.

We're losing a lot of money every year because of this and we're going to need you guys to pay in the middle of the year, which is really unusual for this trust. to just keep us afloat. Lisa said news of the surprise bill didn't sit well with her community. Beltertown had already decided to raise taxes on its residents two months before.

And now this. For the town, they were up in arms. I mean, you know, they had their torches. And they blamed the executive board. They blamed the finance committee and the two,

and the town manager for, quote, unquote, not seeing that this was going to happen. Somehow we were supposed to forecast this. So this was very unwelcome news. Lisa said the board went into damage control mode. We worked as a tri-board, bringing in the school committee, the finance committee, and the select board

to work collectively on developing a solution. And that's about the only magical thing that happened. This was a community problem that we were going to solve and we were going to do it together. That solution came with big sacrifices. There's a laundry list of needs, including shoring up our senior center and lighting at one of our schools.

Some of them may seem insignificant, but it's a game changer. Not only did the town have to put planned projects on hold, they also had to claw back money already allocated for other things. The town was able to give some money back. The schools also gave some of their money back. This is from their own budgets. And positions that were going to be hired were put on hold.

And obviously, we gave a lot from our reserves. You said that the schools had to give money back? How did that go over? It was very, it was very loving. And that's an odd way of putting it, right? But everyone at the table, understood that this was a community decision. And we all needed to pitch in,

all needed to give things up. And I'm very proud of the way Belchertown handled this problem. But we're not out of the woods yet. Could something like this happen again? Yes. Beltertown figured out how to cover the surprise bill. But they still had to figure out if they'd keep it. covering GLP ones in the future.

That's next. First item on the agenda is the Pledge of Allegiance. A Pudge allegiance to the flag of the United States of America. A couple hours from Belcher Town is another town called Duxbury. Back in April, they held a community meeting at their town hall in what's called the mural room. Members of the select board sat behind a desk, facing their neighbors. A painting of the town in its early days with horse-drawn wagons and wooden sailing ships filled the wall behind them.

In calendar year 2025, Duxbury had 7% of its members account for 25% of total pharmacy claims related to GLP1's prescribed for weight loss alone. They were gathered to discuss GLP1 coverage for town employees. Our freeze are thin budget. Everybody in this community is well aware of where we're at as a community. what they aren't totally aware of, maybe until they bore down on the details, this is this is the big driver in our budget. You have to sympathize with people.

There has to be compassion. This debate isn't just happening in small towns. Massachusetts also had to consider changing benefits for state employees. Here's a meeting the state insurance provider held in February. So when a doctor prescribes a GLP1 for weight loss, these patients, they're treating the root cause of heart disease and hypertension, which we're paying to manage. Supporters say GLP1 coverage for weight loss will pay off over time.

If we vote to eliminate GL1s, we're cutting off treatment while we keep paying for everything else, the cardiac drugs, the blood pressure medications, the ER visits, hospitalizations. But others worry that the drugs are being used for cosmetic improvements that shouldn't be paid for with taxpayer dollars. I could go to my physician because of my relationship with my physician and ask that physician to give me a GLP1 drug and really exaggerate something that I may or may not have. I mean, and that is, that's human nature. You sort of, you know, manipulate the system.

And they're faced with the reality that at the end of the day, small town budgets are only so big. It's a very difficult decision and one that's in front of us from a budget perspective, which we also have a responsibility to balance. I think it's for a lot of these towns an impossible decision. You're going to get blowback either way. And in fact, I spoke to one town manager in Massachusetts who, was going into negotiations with the union.

And he said he's going to have to, you know, he has to bring these questions to employees. Like, do you want to raise or do you want the same level of health care? And that's where some of these towns are at. No one really wants to have to make that decision. And there's not yet enough research about the long-term benefits to be sure. It's not one where they have a ton of data to use to make that decision besides the fact that the costs are up, because, again, the drugs are new enough that it's

really hard to say what is worth it and what isn't, especially when you know, you're getting conflicting opinions even from, you know, academics and economists on this issue. There's also this sort of sense of almost helplessness of just like the decisions we have to make right now is not, you know, how do we make these drugs less expensive? If we have to decide how we're going to pay, like what teacher positions we're going to cut, where we're going to find the money to hire this new firefighter, et cetera. Some towns are opting to tweak coverage as a sort of compromise. Some are saying, you know, maybe we'll cover the generic brand, but not this brand. Some of them are saying, we'll cover this, but you have to go on this strict kind of weight loss plan where we're monitoring your success.

and so there's a lot of different solutions that are emerging here. As for Belchertown, their insurance trust ultimately decided to stop covering GLP-1s for weight loss. In many cases, they're retaining coverage for diabetes, just not for weight loss. And for many of those areas, there's plenty of employees who are going to lose access when the fiscal year turns over. Lisa says she hopes a state. or federal government will step in to help ease the financial strain of these drug costs. We need to rein in pharmaceutical spending, and the government needs to step in and help small communities like ours.

We don't have the largest that, you know, big cities do. And we want towns, we think towns are very important to continue. to continue to thrive, you know, not just survive. So what do you think is the best way to use the town budget to serve the town? Is it roads, schools, buildings, or health care? It's all of them, obviously. You know, we need all those, just like any other community. Like, what would you take out of that equation?

And if the government and pharmaceutical companies don't start getting more real and realistic about their pricing, and also political officials don't get more serious about protecting small towns in America, then we could lose them. And I don't even know what that world would look like, especially in this country. That's all for today, Monday, June 29th. The Journal is a co-production of Spotify and the Wall Street Journal. Additional reporting in this episode by Heather Haddon, Amira McKee, and Nicholas G. Miller. Thanks for listening. See you tomorrow.