The financial cost of obesity

Weight and finances have been discussed at length on personal finance blogs, but mostly the report [PDF] that put a figure to the staggering individual costs of being obese in America. Dr. Avi Dor, report author and professor and director of the health economics program at The George Washington University, and his colleagues quantified indirect costs, direct costs, and lost productivity to arrive at an estimated total cost of being an obese individual.

The High Price of a High BMI

After tabulating various costs associated with being overweight or obese, the researchers found that being an obese individual in the U.S. costs $4,879 for women and $2,646 for men each year. The overall annual costs of being overweight are $524 for women and $432 for men. The researchers defined “obesity” as a body mass index (BMI) higher than 30, and “overweight” as a BMI between 25—29.

Adding the value of lost life to these yearly costs makes the price tag even higher: $8,365 and $6,518 for women and men, respectively.

The analysis showed that obese women pay nine times more and obese men pay six times more in associated costs than do individuals at a healthy BMI. The results also showed that women are affected much more than men when it comes to obesity and job-related costs, including lost wages, absenteeism, and disability.

Non-Medical Costs of Obesity

Direct medical costs are an obvious cost driver—for overweight individuals, it accounts for 66% of weight-related costs for women and 80% for men. It’s also the cost driver for obese men, but for obese women it accounts for just 30% of the overall costs. An obese female loses more income through lost wages (38%) than from medical costs.

“The data demonstrate that an individual affected by obesity faces not only high medical-related costs, but also higher non-medical costs…,” said Joe Nadglowski, President and Chief Executive Officer of the Obesity Action Coalition, in a press release. Non-medical, obesity-related costs accounted for in the research included the following measures:

  • Wages. The annual wage loss for obese males is $75, but statistically that figure is insignificant, according to the report. Obese women earning a median annual wage of $32,450 make 6%, or $1,855, less per year. The researchers note that there isn’t enough data to determine why the relationship between weight and wages is clear for women, but not for men.
  • Short-term disability. Annual costs of short-term disability are $55 higher for the average overweight employee and $349 higher for the average obese employee than for employees at a healthy weight.
  • Disability pension insurance. The annual incremental costs of disability pension insurance is $69 more for obese employees. There wasn’t a significant difference in cost for overweight individuals.
  • Sick leave (absenteeism). Five studies on absenteeism (missed work days due to illness or injury) found that obese employees are more likely to use sick days due to illness or injury. One of the studies (Finkelstein et al. 2005) found that severely to morbidly obese men miss two more days of work than men at a healthy weight, while overweight to morbidly obese women miss up between one and five more days than women at a healthy BMI.
  • Productivity (presenteeism). Obese individuals have more self-reported limitations at work or limitations in the amount of work that an employee can be performed, which lowers productivity. One study cited (Ricci and Chee, 2005) used nationally representative data to estimate that reduced productivity will cost an obese individual $358 per year.
  • Gasoline use. Jacobson and McLay (2006) studied the relationship between weight and fuel use, finding that almost 1 billion more gallons of gas are used each year due to average-passenger weight increases since 1960. The cost differences weren’t significant for overweight and obese people, but the morbidly obese spend $30 and $36 more for females and males, respectively. (That figure was calculated using $2.35 per gallon of gas, the average price in the U.S. in 2009.)
  • Life insurance premiums. Compared to healthy-weight individuals, an overweight and obese person will pay an additional $14 and $111, respectively, in life insurance costs each year.
  • Value of lost life due to premature mortality. The researchers calculated the value of years of life lost (for specifics on how they made the calculation, see the retirement.The report notes that when it comes to retirement, severely and morbidly obese employees retire earlier than normal-weight employees, which translates to less income in wages and benefits. This is particularly alarming for obese women, whose wages are significantly affected by their weight and who, as females, already lag behind men in retirement savings, when research shows women need to save more than men. Because early retirement benefits vary widely, the researchers didn’t include that data in their report.

Anecdotal evidence suggests that the costs not included are significant, says Dor.

A Bigger Problem

More than 60% of Americans are at an unhealthy weight, with 33.4% classified as obese. If we continue at this rate, by 2030 half of the population will be obese. Obesity-related conditions include heart disease, stroke, type-2 diabetes and some types of cancer, among the leading causes of death, according to The Center of Disease Control and Prevention.

Those are some scary facts and figures, and the George Washington University only underscores an already-critical situation. After all, paying $6,518—$8,365 more per year for obesity-related expenses hardly seems significant in light of words like cancer, stroke, and premature death. Your health is your most important asset.

I wish I had answers, but I don’t. Education seems like the go-to solution, but I’m not convinced it’s enough. Like personal finance, getting healthy means making difficult changes in habits and lifestyle, not simply being taught that French fries are bad and spin class is good. So readers, I’ll turn it over to you. Has your weight noticeably affected your expenses or income? If so, share specific examples and costs.

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