Health insurance and poverty measurement

This chapter provides an overview of attempts to incorporate health insurance benefits into poverty measures. Doing so matters most where benefits are not universal and require out-of-pocket payments for insurance or care. The chapter describes measurement difficulties, especially defining a health care/insurance need for the poverty threshold and capturing the limited fungibility of health benefits. Two prominent approaches - adding a fungible value of health insurance to resources and deducting medical out-of-pocket expenditures from resources - cannot estimate the full impact of health insurance benefits on poverty, particularly its access value. The chapter describes a health-inclusive poverty measure (HIPM) that includes health insurance needs and benefits, prevents health benefits from meeting non-health needs, and enables estimates of impacts of health benefits on poverty. The chapter also considers the potential value of the HIPM for international comparisons of poverty and welfare states.