By Heidy Gonzalez, Member-Candidate, J.D. Candidate, May 2020, St. Thomas University School of Law.

In 2015-2016, about 93.3 million American adults were considered obese. Obesity trends show that the amount of Americans impacted is consistently on the rise.  Not surprisingly, another upward trend is the cost of health insurance.  In 2016, Americans spent $3.4 trillion on health insurance. As the health of Americans deteriorates, it is not a mystery that premiums continue to increase 

It is important to understand that insurance functions by risk pooling In other words, all individuals are offered the same rate because some insureds are risk-averse than others.    Accordingly, some individuals will take advantage of health resources, while others will not, but all will pay the same premiums.  However, as Americans become unhealthier, the ratio of individuals that are healthy to those that are unhealthy will become heavily skewed.  As a result, insurance companies will be forced to increase their costs in order to hedge the amount of coverage they disburse. 

Simultaneously, regions, such as the west coast, are becoming increasingly health conscious.  California is one of the states at the forefront of the vegan movement, among other health trends.  Yet, other regions remain heavily plagued by poor eating habits, with West Virginia leading the way in the nation’s obesity rates. Therefore, the underlying solution to the problem is education and awareness.  Individuals, particularly children, should be taught proper nutrition and its importance.  As such, American society will be healthier as a whole, thereby the market for insurance will be a healthier one.  Ultimately, insurance costs are directly proportional to the risk involved in insuring the market.  If the market is healthier, then insurers faceless risks, and the costs of premiums decrease.

However, with the current statistics, one wonders whether the rise in obesity is the end to risk pooling in the insurance market?  Will insurance companies ultimately insure only unhealthy individuals?  The results will shape political platforms and individuals’ wallets in the years to come.