Vail Contractors Forum

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Vail Contractors Forum

• Obesity and Its Impact on Insurance Costs

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Obesity and Insurance

• Overweight and obesity rates in the United States
  and Europe are on the rise.
• Triggering major health concerns.

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Obesity and Insurance

• According to a National Health and Nutrition
  Evaluation Survey, nearly 2/3 of U.S. adults are
  overweight or obese.
• The percentage of U.S. adults who are overweight/
  obese is three (3) times as great as those who
  smoke.

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Prevalence of Overweight and Obesity Among U.S.
Adults (aged 20-74 years)
Nearly 2/3 of U.S. adults are overweight or
obese, up from 47 in the late 1970s
64
56
47
Source Centers of Disease Control and
Prevention (CDC), National Center of Health
Statistics (NCHS), National Health and Nutrition
Examination Survey (NHANES), Insurance
Information Institute.
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Obesity and Insurance

• Body mass index (BMI) has become the medical
  standard used to define whether a person is
  overweight or obese.
• BMI divide persons weight in pounds by the
  square of their height in inches, multiplied by
  703.

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Obesity and Insurance

• BMI Example
• 5 6 and 150 lbs. 24, healthy weight
• 5 6 and 190 lbs. 31, obese

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Obesity and Insurance

• NIH studies indicate that although BMI does not
  show any difference between excess fat and
  muscle, it is closely associated with measures of
  body fat.
• Good predictor of development of health problems
  related to excess weight.

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Adult Body Mass Index
Source Centers of Disease Control and
Prevention (CDC).
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Body Mass Index Table
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Obesity and Insurance

• Cuts across all lines of age, race, ethnicity and
  gender.
• Lack of physical activity.
• Unhealthy eating patterns.
• Rising incidence of obesity in children.

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Prevalence of Overweight and Obesity Among
Children and Adolescents
In the past two decades, the percentage of
overweight children has more than doubled and the
percentage of adolescents who are overweight has
tripled.
Source Centers of Disease Control and
Prevention (CDC), National Center for Health
Statistics (NCHS), National Health and Nutrition
Examination Survey (NHANES), Insurance
Information Institute
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Prevalence of Obesity 2000
Source Behavioral Risk Factor Surveillance
System
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Health Consequences of Overweight and Obesity are
Serious!

• NIH, obese people 50 to 100 increased risk of
  premature death compared to BMI of 20 to 25.
• Surgeon General estimates 300,000 U.S. deaths
  associated with overweight and obesity - compared
  to 400,000 associated with cigarette smoking.

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Health Consequences of Overweight and Obesity are
Serious!

• Obesity increases risk of chronic conditions,
  coronary heart disease, type 2 diabetes, certain
  cancers and musculoskeletal disorders.

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Health Consequences of Overweight and Obesity are
Serious!

• NIH - Studies note that obese individuals may
  suffer from social stigmatization and
  discrimination.
• Psychological issues related to depression.

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Health Risks Associated with Obesity
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Insurance Sector Impacts

• The economic and social costs of obesity are
  immense and growing.
• Many of these costs are passed along to the
  insurer in the form of claims.

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Health Insurance

• Bears direct cost of treating overweight and
  obese persons. Private and public programs.
• Rand Study - obese people spend 36 more on
  health service than people who are normal weight.

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Life Insurance

• Directly impacted by increased prevalence of
  obesity through its effect on mortality rates.
• Life span of a obese person is shortened by 7
  years.
• Life Underwriting - height, weight - BMI,
  smoking, activities, family history.

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Obesity Can Increase the Risk of Premature Death
Source USA Today, October 14, 2003
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Disability Insurance

• Overweight and obese people have more chronic
  health problems, resulting in tens of millions of
  lost work days annually.
• Obesity increases rate of serious disease, a cost
  driver for disability insurers.

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Workers Compensation

• Overweight and obese people suffer from a much
  higher incidence of chronic disease, including
  musculoskeletal disorders.
• This increases recovery time, pushes medical
  costs higher.
• The increased recovery time will also increase
  the indemnity (income replacement) costs.

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Economic Implications

• Surgeon General estimates the direct and indirect
  cost attributed to overweight and obesity
  amounted to 117 billion in 2000.
• This is approximately 10 of total health care
  costs.

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Rand Corporation Study

• Obese individuals spend 36 more on health
  service.
• Seventy seven percent (77) more on medications.

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Obesity and Employee Acquisition

• Written employment application
• Height/weight (drivers license)
• Calculate BMI
• Face-to-face interview
• Match the person to the job

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• For additional information, see
• Rand Corporation, www.rand.org
• U.S. Surgeon General, www.surgeongeneral.gov
• National Institute for Health, www.nih.gov
• American Medical Association, www.ama-assn.org
• Centers for Disease Control, www.cdc.gov