Health Insurance, Obesity and Its Economic Costs

Published in: Economics of Obesity, 2004, p. 21-24

Posted on RAND.org on December 31, 2003

by Jay Bhattacharya, Neeraj Sood

Read More

Access further information on this document at www.ers.usda.gov

This article was published outside of RAND. The full text of the article can be found at the link above.

Because medical costs are higher for the obese and premiums do not depend on weight, lighter people in the same pool pay for the food/exercise decisions of the obese. Furthermore, the negative health effects of obesity decrease the ability of the obese to pay for government-mandated social programs. Bhattacharya and Soods paper focused on these health insurance externalities. The authors developed a model of weight loss and health insurance under two alternative regimes, one that allows underwriting on weight, with premiums a function of weight, and another that does not allow this, and premiums do not depend on weight. The goal of this study was to estimate the impact of absent or imperfect underwriting on weight and health.

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/principles.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.