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Catastrophic Health Expenditures and Life Satisfaction: A Case in South Korea

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Abstract

This study examined the prevalence of households in South Korea that had experienced catastrophic health expenditures (CHE) and the impact of such expenditures on life satisfaction. Using data from the 2010 Korean Longitudinal Study of Ageing, this study found that the poverty-national health insurance (NHI) group had the highest likelihood of having CHE but the effect on life satisfaction of having CHE varied among the household groups, mainly in terms of income level and type of medical benefit programs. Households in the poverty-NHI group exhibited much lower satisfaction compared to other groups when they experienced CHE. This study further showed that the harmful effect of facing CHE was confined not only to poor health outcomes or economic hardships but also extended to generally lower life satisfaction in the poverty-NHI group. These findings underscore the importance of providing an adequate financial safety net for the health care of households in the poverty-NHI group.

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Notes

  1. Household financial capacity is estimated as the sum of household income and household assets converted to monthly income. In detail, household income and household assets are calculated as follows (available from http://english.mw.go.kr.):

    Assessed household income = (actual household income − basic expenses based on household characteristics − earned income deduction)

    Converted household assets = (household assets − basic property deductibles − household liabilities) × income conversion rate).

  2. The Ministry of Welfare and Health calculates the minimum cost of living every 3 years based on a market-basket approach. The minimum cost of living is calculated according to region and household size. In the years when the minimum cost of living is not calculated, the previous year's minimum cost of living is inflated by the consumer price index. In South Korea, the minimum cost of living is used as a threshold for identifying poor households who qualify for National Social Security programs such as Medical Aid.

  3. The familial caregivers under legal obligation to provide care for patients are the recipients’ direct relatives (e.g., parents, sons, and daughters) and their spouses. If a household applying for MA coverage has legal family caregivers and the actual income of those caregivers exceeds a certain threshold, the household will not qualify for MA. (Available from http://english.mw.go.kr).

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Acknowledgments

This work was supported by Research Resettlement Fund for the new faculty of SNU.

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Authors and Affiliations

  1. Department of Consumer Science, Seoul National University, Rm. 428 Bldg. 222, 1 Gwanak-ro, Gwanak-gu, Seoul, 151-742, South Korea

    So-Yun Kim

  2. Department of Human Development and Family Studies, Iowa State University, 4380 Palmer, Ames, IA, 50011, USA

    Gong-Soog Hong

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Kim, SY., Hong, GS. Catastrophic Health Expenditures and Life Satisfaction: A Case in South Korea. J Fam Econ Iss 36, 369–382 (2015). https://doi.org/10.1007/s10834-015-9459-y

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