Background: The increase in pediatric obesity rates is well documented. The extent of corresponding increases in diagnoses of obesity-related conditions (Ob-Cs) and associated medical costs for children in public insurance programs is unknown. Methods: Retrospective claims data linked to enrollees' demographic data for Alabama's Children's Health Insurance Program (ALL Kids) 1999-2015 were used. Multivariate linear probability models were used to estimate the likelihood of having any Ob-C diagnoses. Two-part models for inpatient, outpatient, emergency department (ED), and overall costs were estimated. Results: The proportion of enrollees with Ob-C diagnoses almost doubled from 1.3% to 2.5%. The likelihood of diagnoses increased over time (0.0994 percentage points per year, p < 0.001). Statistically higher rates of increase were seen for minority and lowest-income enrollees and for those getting preventive well visits. Costs for those with Ob-Cs increased relative to those without over time, particularly inpatient and outpatient costs. Conclusions: Prevalence of Ob-C diagnoses and costs have increased substantially. This may partly be because of underdiagnoses/underreporting in the past. However, evidence suggests that underdiagnoses are still a major issue.