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Obesity Is Taxing Health and Wallets

Mpls., MNĀ  January 23, 2004: Obesity cost taxpayers $39 billion in 2003 according to groundbreaking research sponsored by the Centers for Disease Control and Prevention and published in the January 23, 2004, issue of Obesity Research. The study was authored by leading health care economists and is the first of its kind to document obesity-related health care expenditures on a state-by-state basis, including those from Medicare and Medicaid. These estimates will help policy-makers determine the best way to allocate scarce public health resources and provide information about obesity's economic impact on individual states.

Data consistently show that the incidence of obesity and the cost of treating obesity and its related conditions continue to rise. Results from the 1999-2000 National Health and Nutrition Examination Survey (NHANES) indicate that approximately 64% of U.S. adults are either overweight or obese. This is alarming both in terms of obesity's impact on quality of life as well as health care economics. Obesity has been linked to 41 chronic diseases, including type 2 diabetes, cardiovascular disease, and several types of cancer, as well as joint and skeletal disorders. As a consequence of these and other weight-driven conditions, the cost of providing health care to obese adults is 36% higher than it is for healthy-weight adults.

From a national perspective, the cost of obesity is enormous. In 2003 dollars, Americans are spending about $75 billion per year to treat obesity-related medical conditions. Medicare and Medicaid paid approximately half of these costs, creating a significant burden on government funds and the taxpayers who provide them. Self-reported obesity prevalence among adult Medicaid recipients is roughly 50% higher than that for the general population. As a result, the percentage of Medicaid dollars that are spent treating obesity-related medical conditions in adults (11%) is nearly double the percentage spent by non-Medicaid recipients.

Although the Obesity Research study focused on the financial burden of obesity on states, all sectors of the economy should be concerned about the medical and financial implications of obesity. The fact that the government (and ultimately the taxpayer) is responsible for financing roughly half of obesity-related medical expenditures should strengthen the need for government interventions to reduce obesity rates. If left unchecked, many experts fear obesity rates will continue to climb and so will the cost to taxpayers. According to the study's authors, the remedies include devoting significantly more public health resources to obesity treatment and prevention, as well as increasing private insurance reimbursement for obesity therapy.

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Cost to States Ranges from Millions to Billions

At the state-level, estimates of obesity costs range from $87 million for Wyoming (the least populated state) to $7.7 billion for California (the most populated state). Obesity-attributable Medicare expenses range from $15 million (Wyoming) to $1.7 billion (California), and Medicaid estimates range from $23 million (Wyoming) to $3.5 billion (New York). These estimates of obesity-related medical expenditures present the best available information of the economic impact of obesity at the state level. Policy-makers should consider these estimates, along with other factors, in determining the best allocation of scarce public health resources.