The financial cost of obesity

Shelly Gigante

By Shelly Gigante
Shelly Gigante specializes in personal finance issues. Her work has appeared in a variety of publications and news websites.
Posted on Dec 6, 2022

Magnifying Glass Icon  
This article will ...

Highlight the direct and indirect costs of obesity. 

Reveal why those with obesity may earn less than their peers. 

Tell you how much you may save by losing weight.  
 
     

Obesity in America is an undisputed public health crisis, contributing to lower quality of life and a higher incidence of chronic disease. But excess body weight can also take a financial toll.

Those diagnosed with obesity often incur higher expenses for:

  • Medical care
  • Insurance premiums

The indirect costs can be greater still. Many adults who are clinically obese bring home smaller paychecks and struggle with employment stability.

“If health concerns aren’t enough incentive to change eating and exercise habits, knowing the economic costs might be,” the National Center for Health Research states on its website.1

Obesity is common and costly

Obesity is typically defined as being 20 percent over your ideal weight or having a body mass index (BMI) of 30 percent or higher. BMI is calculated using height and weight.

The Centers for Disease Control and Prevention (CDC) estimates that 42 percent of adults in the United States are considered obese, a figure that continues to climb (up from roughly 30 percent in 1999).2 It is among the leading causes of preventable disease and premature death.

Nationally, annual obesity-related medical care costs in the U.S. are estimated to be roughly $173 billion, with productivity costs of obesity-related absenteeism ranging from $3.4 billion ($79 per individual with obesity) to $6.4 billion ($132 per individual with obesity), according to a CDC analysis.3

Higher medical costs

On an individual basis, a 2021 report published by the National Library of Medicine revealed that adult obesity is associated with average annual increased medical costs per person of $1,861. And severe obesity was associated with additional costs of $3,097 per adult. Among children, obesity was associated with $116 in excess costs per child for medical care, with severe obesity associated with $310 in additional health care costs.4

Obesity-related health care costs were found to be higher for adult females and increase with age for all adults, with the highest estimated costs occurring for 60- to 70-year-olds. (Related: Why single seniors pay more for health care)

According to the report, “higher health care costs are associated with excess body weight across a broad range of ages and BMI levels, and are especially high for people with severe obesity. These findings highlight the importance of promoting a healthy weight for the entire population while also targeting efforts to prevent extreme weight gain over the life course.”

Indeed, those with a higher BMI are statistically at greater risk of developing chronic health conditions such as heart disease, stroke, diabetes, high blood pressure, and certain types of cancer.

Higher insurance premiums

Adults with obesity are also more likely to pay higher insurance premiums for certain types of coverage. In some cases, they can be denied coverage.

Where health insurance is concerned, it is important to note that there are protections under the Affordable Care Act that prohibit health insurers from denying covering or charging higher premiums for preexisting conditions, including obesity.5

Life insurance is a different story. Those with diagnosed obesity typically pay higher premiums for life insurance.

The higher your BMI, the more you will likely pay. Why? Weight is considered an important indicator of overall health. As such, obese adults may potentially be denied life insurance coverage on the basis of weight.

Life insurance is a key component to financial planning, which helps protect your loved ones after you are gone. (Calculator: How much life insurance do I need?)

You can potentially improve your life insurance rate by losing weight before applying for coverage. But ValuePenguin, a website that tracks consumer spending, notes that those who lose weight within a year of seeking coverage may only receive credit for half the weight that is lost.

“Insurers want to know that your weight loss is sustained, and that you won't simply gain it back, so they focus on your weight trend as opposed to a single snapshot,” it noted. (Related: How much does life insurance cost?)

If you are denied life insurance coverage, you can try losing weight and reapplying, or apply with a different insurer.

Obesity often correlates with lower income

Obesity is a threat to financial well-being on many fronts.

The CDC reports that those living with obesity are more likely to experience lost wages due to absenteeism, a byproduct of health challenges, such as back problems, depression, and additional doctor’s visits.6

Earnings potential for those with excess weight may also suffer, especially for women.

A 2019 report published by the National Library of Medicine found that obese and overweight men had nearly 14 percent higher monthly wages than their “normal-weight” counterparts and were 1.5 percent more likely to be placed in professional jobs. But obese and overweight women earned roughly 9 percent lower monthly wages and were half as likely to have jobs with bonuses than their “normal-weight” peers.7

A LinkedIn survey of 4,000 adults from the United Kingdom found that both male and female workers who are classified as obese earn the equivalent of $2,500 less (in U.S. dollars) per year than their peers with a “healthy BMI.” It also found that women who are overweight or obese are more likely to receive a lower salary than men of the same weight, in this case revealing a gender gap of roughly $11,500.8

Financial benefits of losing weight

The benefits of losing weight cannot be overstated.

A lower BMI can significantly reduce the risk of developing chronic disease and potentially increase life expectancy.

From a purely financial standpoint, an obese adult can also potentially realize lifetime savings of anywhere from $18,000 to $31,000 by simply dropping from obese to overweight. A 20-year-old obese adult who drops to a healthy weight would enjoy an additional $10,000 in lifetime savings, according to Johns Hopkins Bloomberg School of Public Health.9

Talk with your doctor, establish healthy eating and exercise habits, and don’t be discouraged if weight loss takes time. In fact, the CDC reports that people with gradual and steady weight loss (about 1 to 2 pounds per week) are more likely to keep the weight off.

“Achieving healthy weight loss isn’t about a diet or program, but a lifestyle with healthy eating patterns, regular physical activity, and stress management,” the CDC wrote. “Medications taken for other conditions may also make it harder to lose weight. If you are concerned about your weight or have questions about your medications, talk with your health care provider.”

Discover more from MassMutual…

Living with a hidden disability

Is disability income insurance worth it?

Need a financial professional? Find one here

________________________________________

National Center for Health Research, “The Cost of Obesity: a Higher Price for Women — and Not Just in Terms of Health,” 2022.

Centers for Disease Control and Prevention, “Adult Obesity Facts,” May 27, 2022.

Centers for Disease Control and Prevention, “Consequences of Obesity,” July 15, 2022.

National Library of Medicine, “Association of body mass index with health care expenditures in the United States by age and sex,” March 24, 2021.

Medicaid, “Reducing Obesity.”

Centers for Disease Control and Prevention, “Consequences of Obesity,” July 15, 2022.

National Library of Medicine, “Impact of Obesity on Employment and Wages among Young Adults: Observational Study with Data Panel,” Jan. 7, 2019.

LinkedIn, “Overweight workers earn less: Study,” 2018.

Johns Hopkins Bloomberg School of Public Health, “Weight Loss for Adults at Any Age Leads to Cost Savings, Study Suggests,” Sept. 25, 2017.

The information provided is not written or intended as specific tax or legal advice. MassMutual and its subsidiaries, employees, and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of MassMutual.