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Like other countries seeking a progressive path to universalism, Peru has attempted to reduce inequalities in access to healthcare by granting the poor entitlement to tax-financed basic care without charge. We identify the impact of this policy by comparing the target population’s change in healthcare utilization with that of poor adults already covered through employment-based insurance. There are positive effects on receipt of ambulatory care and medication that are largest among the elderly and the poorest. The probability of getting formal healthcare when sick is increased by almost two fifths, while the likelihood of being unable to afford treatment is reduced by more than a quarter. Consistent with the shallow cover offered, there is no impact on use of inpatient care. Mean out-of-pocket (OOP) expenditure on healthcare is unaffected but spending is reduced by up to one quarter at some points of the distribution. Among healthcare users, medical spending is reduced across much of the distribution and in relative terms falls most at lower quantiles, which is consistent with limited nominal and effective coverage of expensive treatments.

Out-of-pocket (OOP) payments are the principal means of financing health care throughout much of Asia. We estimate the magnitude and distribution of OOP payments for health care in fourteen countries and territories accounting for 81% of the Asian population. We focus on payments that are catastrophic, in the sense of severely disrupting household living standards, and approximate such payments by those absorbing a large fraction of household resources. Bangladesh, China, India, Nepal and Vietnam rely most heavily on OOP financing and have the highest incidence of catastrophic payments. Sri Lanka, Thailand and Malaysia stand out as low to middle income countries that have constrained both the OOP share of health financing and the catastrophic impact of direct payments. In most low/middle-income countries, the better-off are more likely to spend a large fraction of total household resources on health care. This may reflect the inability of the poorest of the poor to divert resources from other basic needs and possibly the protection of the poor from user charges offered in some countries. But in China, Kyrgyz and Vietnam, where there are no exemptions of the poor from charges, they are as, or even more, likely to incur catastrophic payments.

Biased longevity expectations will lead to suboptimal decisions regarding saving, retirement, annuitization and health, with consequences for wellbeing in old age. Systematic differences in the accuracy of longevity expectations may partly explain heterogeneity in economic behaviour by education and cognitive functioning. Analysis of eight waves of the US Health and Retirement Study reveals that individuals with lower levels of education and cognitive functioning report survival probabilities that are less accurate in predicting their in-sample mortality. There is little evidence that the gradients in the veracity of expectations are due to the less educated and cognitively able responding less to changes in objective mortality risks. However, high school dropouts and the least cognitively able report survival probabilities that are less stable and display greater un explained variability. These disadvantaged groups appear to be less confident in their longevity beliefs, which is justified given that their expectations are less accurate.

Little is known about perceptions of medical expenditure risks despite their presumed relevance to health insurance demand. This paper reports on a unique elicitation of subjective probabilities of medical expenditures from rural Ethiopians who are offered the opportunity to purchase health insurance. We find that expectations are positively correlated with past expenses to a degree that exceeds the serial correlation in realized expenditures, suggesting overestimation of persistence and underestimation of the potential gains from insurance. Despite the fact that forecast expenditures do predict realized expenditures to some extent, there is no evidence that expectations influence the decision to take out health insurance, although plans to insure are positively related to the perceived dispersion of medical expenses.

We estimate the impact on health care utilization and out-of-pocket (OOP) expenditures of a major reform in Thailand that extended health insurance to one-quarter of the population to achieve universal coverage while keeping health spending below 4% of GDP. Identification is through comparison of changes in outcomes of groups to whom coverage was extended with those of public sector employees and their dependents whose coverage was not affected. The reform is estimated to have reduced the probability that a sick person goes without formal treatment by 3.2 percentage points (11%). It increased the probability of receiving public ambulatory care by 2.7 ppt (5%) and of admission to a public hospital by 1 ppt (18%). OOP expenditures were reduced by one-third on average, as was the probability of spending more than 10% of the household budget on health care, while spending at the very top of the OOP distribution was reduced by one-half representing substantial reductions in exposure to medical expenditure risk. Supply-side measures implemented with the coverage extension are likely to have helped realize these effects from an increased, but still very tight, budget.

We examine the relationship between income and health with the purpose of establishing the extent to which the distribution of health in a population contributes to income inequality and is itself a product of that inequality. The evidence supports a significant and substantial impact of ill-health on income mainly operating through employment, although it is difficult to gauge the magnitude of the contribution this makes to income inequality. Variation in exposure to health risks early in life is a potentially important mechanism through which health may generate, and possibly sustain, economic inequality. If material advantage can be excercised within the domain of health, then economic inequality will generate health inequality. In high income countries, the evidence that income (wealth) does have a causal impact on health in adulthood is weak. But this may simply reflect the difficulty of identifying a relationship that, should it exist, is likely to emerge over the lifetime as poor material living conditions slowly take their toll on health. There is little credible evidence to support the claim that the economic inequality in society threatens the health of all its members, or that relative income is a determinant of health.

Explanations of growth in health expenditures have restricted attention to the mean. We explain change throughout the distribution of expenditures, providing insight into how growth and its explanation differ along the distribution. We analyse Dutch data on actual health expenditures linked to hospital discharge and mortality registers. Full distribution decomposition delivers findings that would be overlooked by examination of changes in the mean alone. The growth in expenditures on hospital care is strongest at the middle of the distribution and is driven mainly by changes in the distributions of determinants. Pharmaceutical expenditures increase most at the top of the distribution and are mainly attributable to structural changes, including technological progress, making treatment of the highest cost cases even more expensive. Changes in hospital practice styles make the largest contribution of all determinants to increased spending not only on hospital care but also on pharmaceuticals, suggesting important spill over effects.

Medical expenditure risk can pose a major threat to living standards. We derive decomposable measures of catastrophic medical expenditure risk from reference-dependent utility with loss aversion. We propose a quantile regression based method of estimating risk exposure from cross-section data containing information on the means of financing health payments. We estimate medical expenditure risk in seven Asian countries and find it is highest in Laos and China, and is lowest in Malaysia. Exposure to risk is generally higher for households that have less recourse to self-insurance, lower incomes, wealth and education, and suffer from chronic illness.

Reliance on self-rated health to proxy medical need can bias estimation of education-related inequity in healthcare utilization. We correct this bias both by instrumenting self-rated health with objective health indicators and by purging self-rated health of reporting heterogeneity that is identified from health vignettes. Using data on elderly Europeans, we find that instrumenting self-rated health shifts the distribution of visits to a doctor in the direction of inequality favouring the better educated. There is a further, and typically larger, shift in the same direction when correction is made for the tendency of the better educated to rate their health more negatively.

Public providers have no financial incentive to respect their legal obligation to exempt the poor from user fees. Health Equity Funds (HEFs) aim to make exemptions effective by giving NGOs responsibility for assessing eligibility and compensating providers for lost revenue. We use the geographic spread of HEFs in Cambodia to identify their impact on out-of-pocket (OOP) payments. Among households with some OOP payment, HEFs reduce the amount by 29%, on average. The effect is larger for households that are poorer, mainly use public health care and live closer to a district hospital. HEFs are more effective in reducing OOP payments when they are operated by a NGO, rather than the government, and when they operate in conjunction with the contracting of public health services. HEFs reduce households' health-related debt by around 25%, on average. There is no significant impact on non-medical consumption and health care utilisation.

Ill-health can be expected to reduce employment and income. But are the effects sustained over time? Do they differ across the income distribution? And are there spillover effects on the employment and income of the spouse? We use matching combined with difference-in-differences to identify the causal effects of sudden illness, represented by acute hospitalisations, on employment and income up to six years after the health shock using linked Dutch hospital and tax register data. On average, an acute hospital admission lowers the employment probability by seven percentage points and results in a 5% loss of personal income (30% for those entering disability insurance) two years after the shock. There is no subsequent recovery in either employment or income. The distribution of ill-health contributes to income inequality: a health shock is both more likely to occur and to have a larger relative impact on employment and income at the bottom of the income distr ibution. There are large spillover effects: household income falls by 50% more than the income of the disabled person, and the employment probability of the spouse is reduced by 1.5 percentage points. The negative spousal employment effect is larger for male than for female spouses and in higher income households.

We propose a method of measuring and decomposing inequity in health care utilisation that allows for heterogeneity in the use-need relationship. This makes explicit inequity that derives from unequal treatment response to variation in need, as well as that due to differential effects of non-need determinants. Under plausible conditions concerning heterogeneity in the use-need relationship and the distribution of need, existing methods that impose homogeneity will underestimate pro-rich inequity. This prediction is confirmed for four low-middle income Asian countries.

Headlines: The long-lasting health care consequences of childhood conditions Data Association between childhood health and health care utilisation in adulthood Exploring mechanisms responsible for the association Does the association vary across Europe? Conclusion and policy relevance

Reliance on self-rated health to proxy medical need can bias estimation of education-related inequity in health care utilisation. We correct this bias both by instrumenting self-rated health with objective health indicators and by purging self-rated health of reporting heterogeneity identified from health vignettes. Using data on elderly Europeans, we find that instrumenting self-rated health shifts the distribution of doctor visits in the direction of inequality favouring the better educated. There is a further, and typically larger, shift the same direction when correction is made for the tendency of the better educated to rate their health more negatively.