The Place of Health Insurance in Reducing Catastrophic Health Expenditure

This paper was aimed to investigate the mixed empirical results on the effect of health insurance in reducing the risk of catastrophic health expenditure (CHE). We investigated a wide range of factors affecting the risk of CHE among patients admitted to hospitals in Tehran. We categorized hospitals into five groups from private hospitals to charity ones. The data used herein was extracted from the second round of Urban Health Equity Assessment and Response Tool. Determinants of CHE were identified using logistic regression. We found that the significant effect of insurance on aggregate data was solely determined by its effect on reducing the risk of CHE in social security organization hospitals. Insured people by this organization allocate a higher proportion of their salaries to the health insurance and are admitted to the organizational hospitals free of charge. This finding shows the bias inherited in the aggregation and provides support for full pre-payments mechanisms. Our findings suggest that individuals relate CHE to the chosen hospitals, which, in turn, needs to be based on individuals’ health insurance and socio-economic conditions.