Objective. To investigate the financial burdens attributed to overweight and obesity on the U.S. health care system among elderly Americans. Data Source. Longitudinal Cost and Use files of the Medicare Current Beneficiary Survey from 1992 to 2001. Study Design. We constructed a simultaneous equation system to model the dynamic relationship between changes in body weight, chronic diseases, functional status, longevity, and health care expenditures using maximum likelihood estimation. Based on the estimation, we conducted a simulation of one cohort with different baseline weights at age 65 and followed to death or up to age 100 of their health outcomes and lifetime health care expenditures. Principal Findings. The elderly men who were overweight or obese at age 65 had 6-13 percent more lifetime health care expenditures than the same age cohort within normal weight range at age 65. Elderly women who were overweight or obese at age 65 spent 11-17 percent more than those in a normal weight range. Both elderly men and women who were overweight or obese at age 65 had worse health outcomes than the normal weight cohorts. The average body mass index among survivors decreased by age. Conclusion. Overweight and obesity could place significant financial burdens on the U.S. health care system. © Health Research and Educational Trust.