This study examined healthcare utilization and associated costs for a severely obese population before receiving bariatric surgery relative to an age- and sex-matched sample from the Australian general population. Severely obese subjects receiving laparoscopic adjustable gastric banding (LAGB) surgery in 2009 (n = 11,769) were identified. Utilization of medical services and pharmaceuticals in the 3.5 years before surgery were ascertained for each severely obese subject through linkage with Medicare, Australia's universal health insurance scheme. Equivalent data were retrieved for each subject from the matched general population sample (n = 140,000). Severely obese subjects utilized significantly more medical services annually compared to the general population (mean: 22.8 vs. 12.1/person, standardized incidence ratio (SIR): 1.89 (95% confidence interval (CI) 1.88–1.89)), translating to twofold higher mean annual costs (Australian $1,140 vs. $567/person). The greatest excess costs in the obese related to consultations with general practitioners, psychiatrists/psychologists and other specialists, investigations for obstructive sleep apnea, and in vitro fertilization. Severely obese subjects also utilized significantly more pharmaceutical prescriptions annually (mean: 11.4 vs. 5.3/person, SIR 2.18 (95% CI: 2.17–2.19)), translating to 2.2-fold higher mean annual costs ($595/person vs. $270/person). The greatest excess costs in the obese related to diabetes drugs, lipid-modifying agents, psychoanaleptics, acid-related disorder drugs, agents acting on the rennin—angiotensin system, immunosuppressants, and obstructive airway disease drugs. Overall, healthcare costs in the severely obese population were more than double those incurred by the general population.