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New Hampshire and Vermont, like many states, face the challenge of providing affordable, high-quality Medicaid programs while operating under budget constraints. One component of these medical expenses is the cost of caring for the steadily rising proportion of obese citizens. Medicaid costs attributable to obesity in New Hampshire and Vermont have been gradually increasing over the past 25 years. Reducing the growing numbers of obese and overweight citizens will eventually reduce the Medicaid expenses attributed to these problems. This report examines preventative care measures such as improved nutrition and physical fitness programs as possible methods of reducing obesity. It also identifies potential funding sources that are available to New Hampshire and Vermont to alleviate the costs of implementing obesity-preventative programs.