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Although the universal health insurance, National Health Insurance (NHI), have improved access to health care and financial burden of health care costs for Koreans, limited coverage of the NHI leads to high out-of-pocket payment for health care. This study examines financial burden of household health expenditures by income level. Data from the Urban Household Expenditure Survey from 1985 through 2005 is analyzed and household expenditure is used as a proxy measure for income. Health expenditures include spending for inpatient care, ambulatory care and pharmaceuticals. If a household spends health expenditure above 40% of household consumption except for foods, that is defined as catastrophic health expenditure. Access to health care for the lowest income group had been improved for two decades relative to other income groups as well as in absolute term. However, both financial burden of health expenditures and the proportion of households that experienced catastrophic health expenditure had been increased in the lowest income group. Study findings have several policy implications. First, in terms of financial burden of health expenditures. the differences among income groups decreased until 2000 but it was worsen in 2005. This suggests that recent policies for extending NHI coverage are not enough to improve the disparity by income level. Second, a differential catastrophic coverage by income level would be an effective strategy that relieves financial burden for low income group. Third, since the catastrophic coverage is applied to only covered services by the NHI, additional strategy for uncovered services should be considered.
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