The Economic Cost of Obesity

The total economic cost of an overweight and obese population in the U.S. and Canada approaches $300 billion per year, with 90 percent of the total – $270 billion – attributed to the U.S.

A new study the Society of Actuaries (SOA) looked at the economic costs of overweight (BMI between 25.0 – 29.9) and obesity (BMI of more than 30) caused by increased need for medical care, and loss of economic productivity resulting from excess mortality and disability.

In the study, the SOA also divided the $300 billion finding into specific causes of economic costs. According to the SOA, the figure breaks down into the following economic costs per year:

• Total cost of excess medical care caused by overweight and obesity: $127 billion

• Economic loss of productivity caused by excess mortality: $49 billion

• Economic loss of productivity caused by disability for active workers : $43 billion

• Economic loss of productivity caused by overweight or obesity for totally disabled workers: $72 billion

Researchers and actuaries Don Behan and Sam Cox reviewed nearly 500 research articles on obesity and its relation to mortality and morbidity, focusing primarily on papers published from January 1980 to June 2009.

“We found substantial evidence that overweight and obesity are becoming world-wide epidemics, and are having negative impacts on health and mortality,” said actuary Don Behan, an independent consulting actuary. “As actuaries, we are working with the insurance industry to help incentivize consumers through their health plan design to focus on health and wellness, which will hopefully help curb the weight and health problems we face today.”

Going one step further, the SOA breaks out the economic cost of overweight versus obesity for the U.S. and for Canada. Dividing up the $270 billion economic cost in the U.S., obesity cost the U.S. economy $198 billion and overweight cost $72 billion in 2009.

The SOA said it also uncovered, through an online survey of 1,000 Americans 18 years and older, that the majority of consumers – 83 percent – would be willing to follow a healthy lifestyle, such as participating in a health and wellness program, if incentivized through their health plan.

“Overweight and obesity have been shown to increase the rate of several common adverse medical conditions, resulting in this extraordinary economic cost to society,” said Behan. “We can’t stand back and ignore the fact that overweight and obesity are drivers of cost increases and detrimental economic effects. It’s time for actuaries, the employer community and the insurance industry to take action and help consumers make smart, healthy decisions.”

Source: Society of Actuaries Overweight and obesity study