NEW YORK (CNN/Money) -
Call it the fat tax: Extra weight can lighten your wallet in many ways, including higher out-of-pocket medical expenses, higher insurance premiums, and -- according to some studies -- lower salaries.
Add it all up and the average overweight American pays through the nose for extra pounds on the hips.
The medical cost mess
There's a long list of medical ailments associated with excess weight in several categories:
- Metabolic complications including type 2 diabetes, hypertension, gallstones, fatty liver disease, gout, and sleep apnea;
- Degenerative conditions such as arthritis, angina and stroke;
- Anatomic complications such as hernias, blood clots, urinary incontinence and skin ulcers;
- Six types of cancer.
No wonder overweight Americans also suffer depression more often than average.
Treating these conditions adds an estimated $93 billion a year to medical spending (half of which the government bears), according to Eric Finkelstein, one of the authors of a national study on medical costs of obesity paid for by the U.S. Centers for Disease Control.
That surpasses health care costs generated by smoking. "Obesity is the nation's number one public health problem," Finkelstein says.
Medical costs are passed along to all Americans in the form of Medicare and Medicaid funding and contributions to group medical plans.
But overweight people needing private coverage may have to pay increased premiums, according to Phil Supple, spokesman for State Farm Insurance.
Life insurance, too, is more expensive for the overweight. Insurers use ideal weight tables in conjunction with their mortality figures and base their rates on the results. Supple says that the cost of coverage goes up incrementally with weight.
Insurers recognize that the average American waistline has grown, says Alan Hixon, managing consultant for State Farm Insurance. His company begins to impose a surcharge on life insurance applicants after "they reach a full 75 percent over ideal body weight," he says.
|Insurer ||Premium for 160-pound male ||Premium for 240-pound male ||Difference |
|Protective Life ||$16.80 ||$22.49 ||34% |
|Wm Penn of NY ||$15.06 ||$20.74 ||38% |
|Zurich Life of NY ||$15.93 ||$26.63 ||67% |
That means a 35-year-old non-smoking male, 5 foot 10 inches tall, whose ideal body weight falls between 148 pounds and 189 pounds can weigh up to 251 pounds without incurring any extra premium. Once there he would pay $2.65 annually for every $1,000 in coverage, about 18 percent more than normal. For other examples see the accompanying table from Insure.com.
Private health insurance has a similar weight penalty, although it usually kicks in at a somewhat lower weight.
Jack Walker, the executive director of the state employees health plan for North Carolina, says that when his organization recently began doing health-risk appraisals for its members, the breadth of the problem surprised him.
In one typical county he found that, of the state employees who opted to have the appraisal, 80 percent qualified as overweight, including 35 percent who were obese and another 12 percent morbidly obese.
Who's going to pay for the growing medical bills? The way insurance works normally, of course, is that healthy members, who consume fewer medical services, subsidize the unhealthy members of a group, who consume more.
But the supply of normal-sized people has dried up, and Walker is worried. "We're at the point where the obese are subsidizing the very obese," he says.
The poverty penalty
On the job front, the deck is stacked against overweight people.
Rik Kopelan, an executive recruiter for Capstone Partnership, says employers are "absolutely" less inclined to hire the overweight. "It has to do with perception of character," he says. "Employers think, if you are ambitious you wouldn't let yourself get fat and sloppy."
Once on the job, a glass ceiling may come into play, although Kopelan says weight discrimination after hiring is less of a problem; your employer soon learns whether you're capable or not.
The National Association to Advance Fat Acceptance (NAAFA), however, points out that only one in 11 top male executives is overweight, an extraordinarily low percentage in a country where more than two-thirds of the population needs to shed some poundage and at least 30 percent are classified as obese.
Some academic studies suggest the problem is even more pronounced, especially for women. "If you're fat, you're more likely to drift into poverty," says Esther Rothblum, a women's health expert and psychologist with the University of Vermont.
Her research suggests the overweight get shortchanged on education -- overweights are often discouraged by teachers, friends, even parents, from extending their education. Overweight women are less likely to marry, and when they do they tend to wed men of lower socio-economic status than themselves. Thinner women marry wealthier men.
A study by John Cawley, a professor of policy analysis at Cornell, found that overweight Caucasian women earn 9 percent less than those with svelte silhouettes. And a University of Michigan study reported that the total net worth of moderately to severely obese women falls as much as 60 percent below average.
And women seem to suffer more job discrimination than men. According to Rothblum, while 40 percent of the overweight men in a study group she ran reported that they have not received a job they sought because of their weight, the statistic for women -- 60 percent -- was even more dismal. And how do they know that their weight disqualified them? The hirers told them.
Says Rothblum: "Americans aren't afraid of saying that they hate fat people."