Health care costs of obesity are passed off to obese workers

Research Activities, February 2010, No. 354

Obesity increases health care costs, because obese individuals are more likely to suffer from chronic conditions such as diabetes, heart disease, and high blood pressure. Those who are obese can expect to have average annual medical expenditures that are $732 higher than normal-weight individuals. What's more, obese workers with employer-sponsored health insurance pay for these higher expenditures through lower cash wages, according to a new study. Stanford University researchers analyzed data from the Bureau of Labor Statistics, National Longitudinal Survey of Youth, and the Medical Expenditure Panel Survey. Information was obtained on factors such as gender, weight, height, hourly wage, insurance status, and length of employment.

The study found that, on average, obese workers with health insurance earned $1.42 per hour less than nonobese workers with health insurance. Among uninsured workers, the wage difference was only $0.25 and not statistically significant. Women were found to suffer more than men when it came to wage penalties for being obese. Obese men earned $1.21 per hour less than their nonobese peers. However, obese women earned $1.66 less than their nonobese counterparts. Finally, obese women whose employers provided health insurance endured a $2.64 wage penalty.

The greater wage penalty for obese women may be explained, in part, by their higher health care expenditures, note the researchers. Their findings on the incidence of the obesity wage premium suggest that pooling of the obese and nonobese does not occur in the employer-sponsored insurance market. The study was supported in part by the Agency for Healthcare Research and Quality (HS11668).

See "The incidence of the healthcare costs of obesity," by Jay Bhattacharya, M.D., Ph.D., and M. Kate Bundorf, Ph.D., M.P.H., M.B.A., in the 2009 Journal of Health Economics 28, pp. 649-658.

Current as of February 2010
Internet Citation: Health care costs of obesity are passed off to obese workers: Research Activities, February 2010, No. 354. February 2010. Agency for Healthcare Research and Quality, Rockville, MD.