DETERMINANTS OF HOUSEHOLD OUT-OF-POCKET HEALTH EXPENDITURES

This study examines the variation in out-of-pocket expenditures for he alth services among different types of households and identifies the s ocioeconomic variables important in determining these expenditures. Co ntrary to the expectation that insurance coverage reduces out-of-pocke t expenditures for health services, it is found that households with h ealth insurance have higher out-of-pocket expenditures. This is strong evidence of the presence of moral hazard in medical care markets and adverse selection in insurance markets.