The Incidence of the Healthcare Costs of Obesity

34 Pages Posted: 29 Sep 2006 Last revised: 2 Dec 2009

See all articles by Jay Bhattacharya

Jay Bhattacharya

Stanford University - Center for Primary Care and Outcomes Research; National Bureau of Economic Research (NBER)

M. Kate Bundorf

Stanford University - Department of Health Research and Policy; National Bureau of Economic Research (NBER)

Date Written: May 2005

Abstract

The incidence of obesity has increased dramatically in the U.S. Obese individuals tend to be sicker and spend more on health care, raising the question of who bears the incidence of obesity-related health care costs. This question is particularly interesting among those with group coverage through an employer given the lack of explicit risk adjustment of individual health insurance premiums in the group market. In this paper, we examine the incidence of the healthcare costs of obesity among full time workers. We find that the incremental healthcare costs associated with obesity are passed on to obese workers with employer-sponsored health insurance in the form of lower cash wages. Obese workers in firms without employer-sponsored insurance do not have a wage offset relative to their non-obese counterparts. Our estimate of the wage offset exceeds estimates of the expected incremental health care costs of these individuals for obese women, but not for men. We find that a substantial part of the lower wages among obese women attributed to labor market discrimination can be explained by the higher health insurance premiums required to cover them.

Suggested Citation

Bhattacharya, Jayanta and Bundorf, M. Kate, The Incidence of the Healthcare Costs of Obesity (May 2005). NBER Working Paper No. w11303. Available at SSRN: https://ssrn.com/abstract=714075

Jayanta Bhattacharya (Contact Author)

Stanford University - Center for Primary Care and Outcomes Research ( email )

Center for Health Policy
179 Encina Commons
Stanford, CA 94305-6019
United States
650-736-0404 (Phone)
650-723-1919 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

M. Kate Bundorf

Stanford University - Department of Health Research and Policy ( email )

Stanford, CA 94305
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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