The obese, with disproportionate chronic disease incidence, consume a large share of health care resources and drive up per capita Medicare spending. This study examined the prevalence of obesity and its association with health status, health-related quality of life (HRQOL), function, and outpatient utilization among Medicare Advantage seniors. Results indicate that obese beneficiaries, much more than overweight beneficiaries, have poorer health, functions, and HRQOL than normal weight beneficiaries and have substantially higher outpatient utilization. While weight loss is beneficial to both the overweight and obese, the markedly worse health status and high utilization of obese beneficiaries may merit particular attention.