The incidence of the healthcare costs of obesity

Who pays the healthcare costs associated with obesity? Among workers, this is largely a question of the incidence of the costs of employer-sponsored coverage. Using data from the National Longitudinal Survey of Youth and the Medical Expenditure Panel Survey, we find that the incremental healthcare costs associated with obesity are passed on to obese workers with employer-sponsored health insurance in the form of lower cash wages. Obese workers without employer-sponsored insurance do not have a wage offset relative to their non-obese counterparts. A substantial part of the lower wages among obese women attributed to labor market discrimination can be explained by their higher health insurance premiums.