BACKGROUND: After a dramatic increase in prevalence over several decades, obesity has become a major public health crisis in the United States. Research to date has consistently demonstrated a correlation between obesity and higher medical costs for a variety of U.S. subpopulations and specific categories of care. However, by examining associations rather than causal effects, previous studies likely underestimated the effect of obesity on medical expenditures. OBJECTIVE: To estimate the causal effect of obesity on direct medical care costs at the national and state levels. METHODS: This study is a pooled cross-sectional analysis of retrospective data from the 2001-2016 Medical Expenditure Panel Surveys. Adults aged 20-65 years with a biological child living in the household were included in the study sample. Primary outcomes were individual-level medical expenditures due to obesity, overall, as well as separately by type of payer and category of medical care. Results were reported at the national level and separately for the 20 most populous states. The expenditure estimates were obtained from 2-part models of instrumental variables in which the respondent's body mass index (BMI) was instrumented using the BMI of their biological child. RESULTS: Adults with obesity in the United States compared with those with normal weight experienced higher annual medical care costs by $2,505 or 100%, with costs increasing significantly with class of obesity, from 68.4% for class 1 to 233.6% for class 3. The effects of obesity raised costs in every category of care: inpatient, outpatient, and prescription drugs. Increases in medical expenditures due to obesity were higher for adults covered by public health insurance programs ($2,868) than for those having private health insurance ($2,058). In 2016, the aggregate medical cost due to obesity among adults in the United States was $260.6 billion. The increase in individual-level expenditures due to obesity varied considerably by state (e.g., 24.0% in Florida, 66.4% in New York, and 104.9% in Texas). CONCLUSIONS: The 2-part models of instrumental variables, which estimate the causal effects of obesity on direct medical costs, showed that the effect of obesity is greater than suggested by previous studies, which estimated only correlations. Much of the aggregate national cost of obesity-$260.6 billion-represents external costs, providing a rationale for interventions to prevent and reduce obesity. DISCLOSURES: Novo Nordisk financed the development of the study design, analysis, and interpretation of data, as well as writing support of the manuscript. Cawley, Biener, and Meyerhoefer received financial support from Novo Nordisk to conduct the research study on which this manuscript is based. Smolarz and Ramasamy are employees of Novo Nordisk. Ding and Zvenyach have no conflicts to declare. Our research has been presented as a poster at the 2020 Academy Health Annual Research Meeting (Virtual), July 28-August 6, 2020.