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The high cost of health care services indicates that the households are mainly responsible for the financial burden of their treatment rather than health insurance companies, and the policy holders often bear the catastrophic expenditure that might drive them below the poverty line. According to the Fourth development plan Act of Islamic Republic of Iran, Out of Pocket Payment (OOP) of households should not exceed 30% of their total health expenditure. This study uses household micro data provided by income-expenditures household survey in order to consider the impact of health care expenditure on the households’ poverty. The findings show that increases in the health care expenditure have led poverty to increase from 1 to 4 percent in different urban and rural areas during the period of study. According to our calculation, if OOP decreases to 30 % of total health care expenditure, then the share of population under poverty line will decrease to 2% of whole population.

Keywords: Poverty line, F.G.T index, Catastrophic health care payments, Health, Fourth development plan

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