The Cost of Obesity - Consumer Justice Foundation

The Cost of Obesity

Written by Faith Anderson on May 1, 2012
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Obese Americans Pay More for Health Care

The U.S. health care reform law of 2010 made it legal for employers to charge obese workers 30% to 50% more for health insurance if they decline to participate in a wellness program. The law also supports community demonstration programs for weight loss and includes measures to persuade Medicaid and Medicare enrollees to see a primary care physician about losing weight. “As committee chairmen, Cabinet secretaries, the head of Medicare and health officials see the really high costs, they are more interested in knowing, ‘what policy knob can I turn to stop this hemorrhage?'” said Michael O’Grady of the National Opinion Research Center and co-author of a new report for the Campaign to End Obesity, which unites representatives from academia, business and the public health community to work with policymakers on the issue.

Obesity and Medical Costs on the Rise in the United States

The percentage of Americans who are considered obese – with a body mass index (BMI) of 30 or higher – has tripled since 1960, to 34%, while the percentage of Americans who are considered “morbidly” obese – with a BMI above 40 – has increased by six times, to 6%. Because obesity raises the risk of a number of medical conditions, from chronic pain to heart disease, the obese are absent from work more often than people of healthy weight. The most obese men take 5.9 more sick days a year, and the most obese women 9.4 more. Obesity-related absenteeism has been found to cost employers as mush as $6.4 billion a year, according to health economists led by Eric Finkelstein of Duke University.

Health economists have also focused on the medical costs of obesity, and a recently-published report finds that it raises those costs more than originally thought. According to the report, published in January in the Journal of Health Economics, obese men are responsible for an additional $1,152 a year in medical spending, particularly for hospitalizations and prescription drugs, while obese women account for an extra $3,613 a year. And researchers found even higher costs among the uninsured: annual medical spending for an obese person was $3,271, compared to $512 for a non-obese person. On a national scale, this equals $190 billion a year in additional medical spending as a result of obesity, researchers calculated, or 20.6% of U.S. health care expenditures – a figure that is double recent estimates.

Obese Americans Live Longer than Smokers

Unfortunately, these extra medical costs are borne not just by the obese, but by the non-obese as well, in the form of higher health insurance premiums and higher taxes to support Medicaid. Even more alarming, the costs of obesity have been found to exceed those of smoking, according to a report conducted by scientists at the Mayo Clinic. “Smoking added about 20% a year to medical costs,” said one of the researchers. “Obesity was similar, but morbid obesity increased those costs by 50% a year. There really is an economic justification for employers to offer programs to help the very obese lose weight,” he concluded.

Although researchers have long suspected that higher medical costs of obesity might be offset by the likelihood that the obese would die young, thus never contributing to the cost of nursing homes, Alzheimer’s care, and other treatments – like smokers – this does not appear to be the case. “Smokers die early enough that they save Social Security, private pensions, and Medicare” trillions of dollars, said Duke’s Finkelstein. “But mortality isn’t that much higher among the obese.” Treatments like beta blockers for heart disease and diabetes drugs are keeping the obese alive longer, with the end result that they incur considerable medical expenses in old age just like those of healthy weight. And while the additional spending due to obesity does contribute to overall economic activity and thus to gross domestic product, it isn’t necessarily the best kind of spending. “Yes, a heart attack will generate economic activity, since the surgeon and hospital get paid, but not in a good way,” said Murray Ross, vice president of Kaiser Permanente’s Institute for Health Policy. “If we avoided the heart attack we could have put the money to better use, such as in education or investments in clean energy.”

Posted Under: United States
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