Do We Have It All Wrong About Obesity?

Do obese people generate costs for other people? Mainly not, according to a review of the literature:

In employer-provided health insurance pools, being obese causes limited externality harm because obese individuals likely pay the costs of their body weight through reduced wages. In public health insurance, there is an implicit transfer from thin people to obese people, but this transfer is progressive and seems unlikely to induce substantial social loss.

[One] way in which the obese “subsidize” the thin is, presumably, by dying earlier and not claiming as much in Social Security benefits…for 50-year olds, obesity reduces life expectancy by 1.65 years…for 65 year-olds, obesity reduces life expectancy by 1.05 years.

See Robin Hanson as well.

Comments (14)

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  1. Brian Williams. says:

    On the other hand, the anti-obesity “food police” generate plenty of costs that need taxpayer subsidies.

  2. Devon Herrick says:

    I suspect the cost of obesity doesn’t really boost health costs until people become old enough to suffer from hypertension, heart disease, cancer and diabetes. When analyzing the social costs, weighing the increased cost to Medicare against the decreased cost to Social Security may cancel each other out. Most evidence points to smoking being this way.

  3. Virginia says:

    Only one year of difference? How much social security does a person collect in one year? That hardly tends to make a difference when compared to all of that medical care.

    Also, if I’m a thin employee, my obese coworker might be earning less than I am. But, I’m still paying a larger health bill because of them. That is money that I would otherwise have pocketed. Sure, the bottom line for my employer is the same. But, I am worse off.

  4. John Goodman says:

    Virginia: What the survey article is saying is that overweight people get lower wages (because they are discriminated against in the job market) and these lower wages tend to offset the higher cost of their health care. Or to put it differently, the market exacts a wage discount that compensates for their higher expected health care costs.

    One year of Social Security is definitely higher than the extra cost to Medicare of obesity in nominal terms, but I’m not sure about the discounted value.

  5. Jeff says:

    Fascinating. This is the exact opposite of what everyone else is saying.

  6. Michael Ainslie says:

    Because this is true and doesn’t fit the template of need for control of your behavior, this will be ignored or discounted. We have deja vu all over again as this was pointed out many times in the anti-smoking hysteria. The Public Health Police will always have to demonize and marginalize what they aim to control. These are social issues, not health issues.

  7. Tom H. says:

    I have to agree with Michael. Where else have you seen this report? No where? It’s as though the health policy community is in denial.

  8. Bruce says:

    Answer to your question: Apparently.

  9. Virginia says:

    Obese people might make less money than thin people, but everyone’s salary goes into the increase in group premium. My point is that the salary might be lower, but everyone’s premium increases, which means that my boss can’t pay me as much.

  10. John Goodman says:

    Virginia: you are still not understanding this. The empirical findng is that in the labor market, obese people pay their own way. Any increase in overall health costs is offset by their lower wages…. [and this is important and maybe what is confusing you] ON THE AVERAGE.

  11. Virginia says:

    I understand what you’re saying. The article talks about this type of situation:

    Workplace 1:
    Thin Worker: $50k
    Thin Worker: $50k
    Total benefits paid by employer: $10k
    Total cost: $110k

    Workplace 2:
    Thin Worker: $50k
    Obese Worker: $40k
    Benefits for paid by employer for new plan: $20k
    Total cost: $110k
    (it costs $10k in additional benefits for obese worker, but the employer pays that person $10k less, thus subsidizing the increase in cost)

    My point was slightly different and related to how the cost per worker for benefits increases in Workplace 2 ($10k/worker as opposed to $5k in workplace 1), thus making the thin worker look more expensive (assuming that employers don’t explicitly discriminate against obese people and run these calculations upon hiring obese people) and perhaps impacting future salary decisions… It’s not that material.

    The point is that obesity is offset by employers decreasing salaries. It’s an interesting one and has many implications for the national response to obesity. It implies that obese workers bear the cost of their condition, rather than society/other policy holders.

  12. Bruce says:

    Needless to say anti-discrimination laws are on their way and maybe even affirmative action for obese workers. But if the past is a guide, this will not help obese people.

  13. Linda Gorman says:

    Wouldn’t it be nice if employers were out of the insurance business and people owned their own health insurance policies that were priced according to the risk the represented to the insurer?

    A person’s weight could then return to being his own business.

  14. Lee says:

    is exactly what this eiepimdc is all about redefining the level at which one is diagnosed with a disease that is correlated to being obese . Pharmaceutical companies aren’t happy with the obscene profits they’re already making, so get those thresholds lowered so more people can be diagnosed with type 2 diabetes, hypertension, high cholesterol, etc and be put on prescription medications at younger and younger ages. The problem with that is that it’s not only fat people who are going to be caught in those lower thresholds, quite a few average/thin people are going to get hit by them hell, I’m DEATHFATZ and I’m not hit by any of them, yet, and I pity the doctor who tries to tell me that I’m diabetic because my fasting blood sugar isn’t at whatever lowered number they come up with, when I know what it should be, same for hypertension and cholesterol. I’ll be one non-compliant patient if they try pulling that bullshit on me.As for the CDC’s numbers, is that 72.5 million just the obese people, no overweight ones included in that? Because that seems like a rather low estimate to me. I thought they were hyping how almost 2/3 of the country was overweight / obese , 72.5 million is less than 25% of the country, which doesn’t seem like that big a deal to me and certainly isn’t an eiepimdc.